How to Get Started in Rental Properties
Learning how to get started in rental properties is going to be fun, but it’s also going to be a lot of hard work. Beginning your journey into real estate investing can be overwhelming. The best tool to arm yourself with is knowledge. Once you know what you’re doing, it’s time to put it into practice.
How to Begin
If you are just beginning your adventure into investing in real estate properties, you’ve come to the right place. When investing in rental properties, it’s going to be important to be able to analyze deals. Meaning, when you buy the house, will the cost to own be less than what renters are willing to pay you? If not, this is not a good deal. However, if the numbers do work and you are making positive cash flow, then you should make the deal.
Getting Started with Rental Properties
Now that you understand you need to find deals that will create positive cash flow, you can look for properties. Sometimes, buying one property will not provide enough positive cash flow. Instead, you may want to consider purchasing multifamily units.
Multifamily units is a property with two or more units. This could be a duplex, a triplex… you get the idea.
How to Get Started Buying Rental Properties
In today’s hot market, it might feel like you can’t find any deals. If that’s the case, then you need to start thinking about your approach differently. For example, are you only looking at houses that are currently on the market? If so, then you’re limited to the current inventory on the MLS. However, if you were to advertise to homeowners directly, you might be able to get a deal. Usually, it’s the homes that are not on the market where you’ll find the best deals.
Being able to identify a motivated seller, is what separates novice investors from investors who make millions.
There are several factors that can make a seller motivated. Some reasons are the seller is going through a divorce, they need to move quickly, they could have inherited the home but have no motivation to keep it, and many other reasons. These are the homeowners you want to get in front of first before any other investors.
When you set up an appointment, you’ll want to be prepared for any questions that comes your way. There are many common objections sellers have, and if you are prepared with an answer, you’ll be securing profitable deals.
How to Get Started Owning Rental Properties
Once you are able to secure the deal, you can go through the traditional sale, or you can leverage another financial strategy called, subject-to. If you’ve been reading my blog, you know that subject to the current financing means that you take over the financing of the seller. This is a great method because you do not have to do a credit check, you do not need to do any income verification, you may not even need a downpayment, depending on the situation.
Without banks, you can own multiple rental properties, whether they are single family homes, condos, or multifamily units. The amount of deals you can make are unlimited and not restricted to your debt-to-income. You can understand the big potential in becoming a landlord with multiple rental properties using subject-to.
Learning how to close a subject-to-deal is something you must master if you want to build financial freedom. If you are just starting out on your real estate investor journey, I invite you to download my investor kit.