Buying Your First Investment Property: 8 Things You Need to Know 

Things You Need to Know When Buying First Investment

There are a few things I wish I knew when I invested in my first rental property. I learned how to estimate the cash flow, repair costs, and identify a marketable product. Real estate investing is not for everyone, and there are some pros and cons to investing in real estate.

Single-family vs Multi-family

One advantage of investing in a single-family property is multiple exit strategies. You can sell it to another investor rent-ready or with a tenant in place. Multi-family apartments typically get built from the ground up. That makes them great to operate as rental properties.

How To Pick A Property

Here are some  strategies to pic a property: 1. Cashflow Focused Buy and Hold 2. Appreciation Focused Buy and Hold 3. BRRRR Method 4. Value-Add Investing 5. Cashflow 6. Appreciation Potential 7. Stability

Property Manager

When purchasing your first investment property, deciding whether to hire a property manager or self-manage is a significant decision. When considering the learning curve for all the aspects of self-management, you might decide that the best option is to hire a professional property management company.

Loans  1. Conforming Loans

Mortgages sold to Fannie and Freddie are in this category. These are the loans that most big banks offer. Usually, these have low fixed rate interest and a lot of documentation requirements.

Loans 2. Portfolio Lenders

The requirements usually mimic conforming loans but may require less documentation and may have a slightly different underwriting model. Usually, these banks are more aggressive toward lending to specific properties.

Acquisitions

When finding a primary residence, your search may begin and end with a real estate agent. However, when looking for an investment property, more options are to consider. It would be best if you looked on the MLS, and it is typically the easiest to use your own buyer’s agent for this.

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