Thread: Getting into the game

Hi,

I started out buying an apartment, doing it up and reselling it. We did think about renting but releasing the equity made more sense to enable us to go on and do more things, like buy another apartment. If you want more equity that might be a way to start out. Then you could perhaps get two duplexes or one in a better area that will generate more income.

If you're looking for tenants I would advise to try for families or professionals. It's a clich

In regards to buying a place and then flipping it, I dont really want to get into that yet, as i dont think im ready to make a flip. I do not know much about flipping nor to i have "fashion sense" when it comes to fixing up the house. Decent duplex's in decent neighbourhoods run for about 120ish give or take 10k. There is actually one just up the street for 130, that im going to be taking a much closer look at.

As for what windsor is like... It's very cold in the winter, which really sucks. It's not really a bad place though, as long as you dont live near downtown. Downtown there are alot of bars and strip clubs and what not, and its generaly louder and not as calm of an area.

Here are the first steps:

1. Market research, find the community that you wish to invest in best to invest near home at first to avoid midnight commutes for leaking water heaters.
2. Find all the properties in the given market area that meet you criteria (ignore asking price at this stage, part of starting out is learning the process of analyzing a property to buy), 2-4 units for you.
3. Gather the following information on every property (phone work with current owner):
1. Estimated mortgage payment (based on asking price)
2. Yearly Taxes last tax year statement preferable (also available from the county(in USA)
3. Monthly utility bills (if owner responsible for)
4. Hazard insurance rates
5. Current Rent cash flow Generation per unit
6. Past Maintenance costs
7. Cost to maintain (grass cutting, snow removal if owner responsible in your area)
8. Any expense that stems from the property
4. Perform a cash flow analysis on each property; does more money come in each month than goes out?
5. Separate your properties in 2 piles, one for positive cash flow, one for negative cash flow.
6. Take the pile of properties that will have positive cash flow and begin to make follow up calls and or visits to the owners or properties themselves. Ask more specifics like
[LIST=1]

1. Type of construction
2. Age of roof
3. age of plumbing system
4. age of electrical system
5. Length current tenants have been there
6. tenant turnover rate
7. tenant payment history
8. reason for owner selling (sick, fed up with tenants, family emergency, job relocation, all these things are clues to the level of seller motivation/likeliness to lower price)

[*]Once you have decided you have found a property you like, make an offer and start negotiating.[*]Once you agree on a price with the owner, you both will sign some sort of purchase agreement.[*]Take this agreement to your source of financing, I use traditional bank lenders for residential <250,000. My bank has a specific title company they use to perform title/lien searches on the property to be sure it can be sold.[*]The title company will take care of all documents around the purchase and show up at your house or their office with about 100 documents you have to sign.[*][FONT=Verdana]It

Originally Posted by CJR_EasternHoldings

Here are the first steps:

1. Market research, find the community that you wish to invest in best to invest near home at first to avoid midnight commutes for leaking water heaters.
2. Find all the properties in the given market area that meet you criteria (ignore asking price at this stage, part of starting out is learning the process of analyzing a property to buy), 2-4 units for you.
7. Cost to maintain (grass cutting, snow removal if owner responsible in your area).

These are all important for all property evaluation, whether it is sole home ownership or fractional ownership. Market research is critical - which includes location research. Before we decide to do a fractional home, we conduct a very extensive market research to see its past, presence and future. Our fractional ownership model has a lot to do with investment. We want to make sure our properties have good returns over years.

I started out 18 yrs ago when my grandma sold me her house on a owner financing deal when I was 20 years old. I am glad that I was able to start out with a single house because I learned a great deal. I agree that a single family house attraches a better tenant. Starting out with a small home allowed me to get my feet under myself while learning the business. Later I was then able invest in other properties with more comfort and a greater understanding of the business. I found that each deal got better and better. It wasn't until I became very good repairing a house that I finally started flipping real estate. The Internet is a great resource that I never had I could only get my information from few books on the subject and other investors that would talk to me. The tenant screening tools alone are something that I only dreamed of when I started out. I think that you are right to start out with a single property. Good luck investing.

thanks for all the great info so far. It has been very helpfull. I have been reading mass amounts of sites and books getting as much information as possilbe. With all the info i have been reading in the last month or two i feel as though im almost ready to "take the next step", which i think would be loan pre approval so that i can start to take a more indepth look at the houses. A big problem that i see popping up is knowing the house's value. I dont want to over pay for a unit. But i guess with time i will develop a better sense of judgement. Again thanks for all the help, and to all the future replys as well, thank you!

I usually recommed that new comers start off as bird dogs and get under the wings of a seasoned vet. Learn the ropes while you still have your day job. Thats is unless you already quit. Then get out there find properties and wholesale them. You will need to read and learn on the job. Keep learning. You will never know it all....

Join your local real estate investors club and network with other investors.

Join the local club and be active as was last mentioned.

Your idea of getting into a duplex is great. The multiplex market is a great way to go because it does two things:

1- reduces impact of vacancy rates
2- Economy of scale- The cost of the property versus the number of tenants versus the amount paid out on loans all play together so that as you add more tenant base to your purchase you increase your cash flow. Of course you increase your work.
3- Make sure you can use a spreadsheet to cogitate!

Regards
Joe