I am new to Real Estate Investing and have a very broad question; but first a little background information. I am in my early 40’s; have managed a 5 million $ P&L for a fortune 5 company; have read several books on Real Estate Investing in addition to “Rich Dad Poor Dad.” I also have a $700/month mortage and no car payment. I belong to my local REIA (SW OH), have no credit card debt and can immediately invest between 50-100K (small potatoes to you guys). I am in a position (business segment sold; new company downsized) to spend 100% of my time investing in Real Estate as my wife makes enough to cover our bills. I have set up an LLC and am looking forward to my first deal. Please accept my apologies in advance if I have given too much information, but I wanted to cover my situation thoroughly for the best answers to my question. If you were me where would you start?
Are you going to be managing your own rental properties?
I always start by just driving around, “prospecting”. Look at the want ads, real estate advertising booklets, internet listings in your area. Get a feel for what a duplex costs, an apartment house, whatever is near you that attracts you. Figure out cost per unit, cost per sq. ft. Just get an idea.
I like to do this alone at first so I am not influenced by others opinions. Try to figure out what you like–because you will be spending a lot of time there until you get your property checked out, fixed up and rented.
Then maybe get some expert Realtor help and do your whole financial analysis. Now this is what I do. I’m sure there are others who just do the numbers, others who don’t even go looking until they have analyzed it.
I like to really drive the neighborhoods, discover the good pockets in less expensive areas where I would be willing to live.
Good luck and have fun.
Initially I would manage my own rental property. So in this economic climate you would suggest a buy and hold strategy? It also sounds as if you prefer a duplex or an apartment house as opposed to a single family lease option deal? Thanks for the reply…
Glad to meet you and Semper Fi, back at you, from Marine Corps Nam Vet,
Where are you located would be my first question?
John $Cash$ Locke
This is an EXCELLENT time to start a rental property business in Ohio! I would suggest starting by learning the business and learning your market. Then, write a short business plan to determine how you will get to your goal (and be sure to include a timeframe). Once you’ve done that, then I would start buying properties according to your plan.
I would strongly suggest starting with a few single family houses and then work your way up to multi-family buildings.
Everybody talks about getting into real estate with no cash no credit and no management skills. Because of that people with little ability to manage large amounts of property get attracted to this business. The kind of skills that make you most likely to be successful are the kinds of skills you have in spades. You should get your feet wet.
In response to “$Cash$” I am in Southwest Ohio.
You are getting million dollar advice from this group. Just do what they say.
Thanks to all who responded. I have another question; due to my situation, new investor/no job, will I be able to purchase property with my own money and then refinance to take my money back out of the property? Also would you suggest becoming a realtor to have access to the MLS?
I’m not a seasoned pro by any means, but that is how I do it. Buy it cash at a discount, then REFI and get all your money back plus rehab costs. Most banks won’t finance the dumps I buy until I fix them up anyways. Make sure you tell the seller that as well. If you do it right it should still cash flow as per the 50% rule.
Does anyone have an answer for the MLS question? Also for the rehab specialists out there; I’m sure there is a sequence for rehabing a house (bath first; kitchen first; bedroom first etc.), if you had to rehab from top to bottom including outside (drive etc.), what would that sequence be? Can anyone recommend a good book that covers the many facets of financing?
Also would you suggest becoming a realtor to have access to the MLS?
Most good deals are not on the MLS, so becoming a realtor just to have access to the MLS isn’t my idea of a good idea. However, I think becoming a realtor would be a good idea if you want to make a few extra bucks, network with others in the real estate business, etc.
You must get the book “Flip”. I saw it recommended on this site, and got it at Hastings. Anybody working in real estate should read that book, even if you are not flipping (selling renovated houses quickly).
As for financing tips, use the “search” option at the top of the page for your education.