Start Small:
Once you’ve set your objectives for your investment goals, the next step is to buy your first property. There are plenty of things that could go wrong with your first purchase, so we recommend that you start small with your first few purchases.
Smaller single-family homes require less work compared to multifamily properties and are generally easier to acquire.
Also, don’t buy the grandest single-family property available on the market. Your aim should be to learn as much as you can from this transaction and get a sense of what it’s like to be a rental property owner. Most property investors even start out by renting out their old residence which is generally safer than buying a house for investment.
Do your Research:
Single-family homes in a neighborhood you know are usually the best option to start with. Before you think about investing in popular big cities or major tourist destinations, invest in your own neighborhood first. This allows you to evaluate the property and better understand the local challenges within the area. You also most likely already have access to vendors and service providers you trust. If problems were to arise, it’s easier to handle them yourself if you live within the area.
Grow Exponentially:
One of the reasons why real estate is preached by successful people is its ability to be used as leverage to grow rental portfolios exponentially, which is why you should take advantage of this fact and acquire more income-producing properties as your portfolio gets bigger.
For example, if you bought a single-family home for $200,000 which you rehabilitated and rented out for a year, you could refinance that property and use the cash to acquire bigger properties (or more properties) rather than buying one property of the same kind and price range. Then, repeat the process and buy even bigger properties (maybe an apartment building with more units).
The idea is to grow your portfolio exponentially by buying more or bigger properties rather than adding one property to your portfolio each time. Put your money to work for YOU while you reap the rewards.
Tim Erickson
P: (652) 451-2273
E: tim.erickson@goluminate.com
W: www.TimEricksonMortgage.com
Mark Henderson
P: (651) 398-3477
E: mark.henderson@goluminate.com
W: www.MarkHendersonMortgage.com