Guides & Processes
Markets
AirBnb/Short Term/Furnished Rentals
Cashflow positive
As long as youâre breaking even or making even a little bit of income youâre doing good. Learn to calculate cashflow.
Buy low, sell high
Make sure you are getting below market price for your market and not overbidding or overpaying. Hereâs some tips for Finding Deals
How much work do I have to do
Renovations are a lot of work, and so are AirBnb/Short Term/Furnished Rentals
For first time investors, it's best to stick to simpler renovations like new paint, updating appliances, or changing floorboards.
Avoid projects involving electrical or plumbing work unless you have general contractor connections or experience. This is more common in homes built before the 80s as they may have aluminum electrical wiring or galvanized iron plumbing, which has a life expectancy of 50 years (guess what year is coming up) and may need to be replaced soon. If you do consider an older house, make sure the owner has updated the utilities.
Too lazy to read? Find the guide on Youtube
[ ] Get pre-approved for a loan so you know how much you can borrow through Financing
[ ] Where should one look to buy for their first investment property? (Should I look for judgmental maps and choose where? Where should I look for appreciation, where should I look for cashflow?)
[ ] Research and learn about Selecting Markets . That means practice calculating cashflow. Thirty properties is a good number to get a feel of the city
[ ] Contact agent showing that you've been pre-approved and know what you're looking for (need an agent?). This is also a good time to explore property managers, who are also great resources for investing
[ ] Go to showings with some Walkthroughs tips
[ ] Start putting your offers in, make sure to check the Due Diligence Checklist once it gets accepted
[ ] Talk to a CPA for tax implications.
[ ] Get involved in your community. Attend your local Meetups
[ ] Join a SARE Accountability pod How to Accountabilibuddy , to keep you on track for that first purchase
Make several offers. For example, you can do both an offer with a loan and one with cash - this will make you seem more open to negotiation
Lock someone into an offer, and then add an inspection contingency before discussing any issues you may have noticed. Once that contracted is signed you will still have negotiation room, but no more competitors.
Get a reliable inspector to check out the property and get the most comprehensive construction bill possible so you can get an idea of what needs to be done. Try to hammer down the price by showing both the pros and cons of the property.
And give a range instead of a single point when asked for an offer. Set the high end to your goal purchase price. This makes it seem like you're more amenable to negotiating.
Don't wait more than three days for a response from a broker, insurance company, or other professional. If they take too long, find a new one.
We are 35% less likely to fact-check sources in a group than individually. Don't get tricked by group settings, always do your research when analyzing comps, sales, and rents.
For buildings older than 20 years old, always get a sewer scope.
Teach tenants how to shut off the water, more tips in Managing Rentals
Keep an eye out on old utilities and avoid major capital expenditure fixes during Walkthroughs
When possible, evict older tenants and choose your own. Avoid getting stuck with undesirable tenants by not wanting to gentrify the neighborhood.