How do you get your first real estate investment property?
If you are reading this right now then you probably like the tagline above, which is how do you get your first real estate investment property? You're probably feeling extremely overwhelmed. There's a lot to think about. I want to narrow that down to eight easy steps by the end of this.
Hopefully, I give you everything that you need to know to go get that first property. So let's just start with that. You are like everybody else. Let's just start there. You are normal. If you are feeling overwhelmed because you haven't made that first purchase, you haven't gone and bought that first investment property. Everybody starts out like that because real estate is so amazing and so fun that you have so many different options and that's actually a hindrance.
Step 1 - Focus
What do you want to get involved in? Do you want to buy an Airbnb or an RV park, or do you want to buy a fourplex or an apartment building? So that's actually step one. I want you to focus. This does not have to be your forever. You're not marrying this concept. You are executing. You are going to get your first real estate investment property.
So first focus, if you're going between one or two, I just want you to narrow it down. It's that easy to narrow it down and pick one. Sounds easy. I know this sounds easy, but that's step one. I want you to pick one. Now that you've picked one, it's time to educate yourself.
Do you want a house hack? Do you want a burner? What do you want to do?
I'm going to use a short term rental. For my example, if you want to do a short term rental, or an Airbnb.
Step 2 - Educate yourself
Step two is to educate yourself. How do you do that? Educate yourself. It is easier now more than ever, to go out in the world and find the information. This is going to be the basic steps one, two, three, four, five, six, seven, eight. But if you want to go learn about an Airbnb, guess what? I've made a video and other people have made a video. I want you to start listening to the Bigger Pockets podcast. I want you to start listening to people like Dave Perry on Military A Millionaire. I want you to start reading books on short term rentals. Many people, there's great authors out there like David Greene, who has written a ton of books. There's a really good one if you want to try the birth strategy from David Greene you got to figure out what you want to learn on example Airbnb in this case. And then you got to go out there and just educate yourself, saturate yourself.
We are always in our car. You should be listening to podcasts, you should be reading books, you should be absorbing YouTubes and become all knowledgeable about, in this case, short term rentals.
Step 3 - The Math
You got to learn how to do the math, and this is the part that a lot of people are going to stumble with. And this is what I want to take out of the equation.
Stop being overwhelmed. It actually doesn't have to be perfect. This is just going to be a learning experience for you. So for short term rental, again, I made an entire YouTube video on this. I hope that you go check it out for a short term rental. I want to know if I'm a finance buyer, what my mortgage is going to be, what I think my utility costs are going to be.
We call this napkin math. You're just going to scratch out some numbers. Then I'm going to go on an Airbnb website. I'm going to see what other people are renting for. I'm going to play it safe and go, okay, if I were to rent out my property for only ten days a month, what would I make? So I make this and these are my bills.
If I subtract those two numbers, do I make money? It's that easy. And that's what we call napkin math. It's just that quick chicken scratch hack in out numbers. It gets you kind of into the rhythm and it starts the conversation of the number game. So start working on your math.
Step 4 - Find a Connection
Now, we focused, we have educated ourselves. We are practicing math calculations now you got to go find the deal.
So you got to get out there and you got to get online. And yes, it's okay to start with Zillow, but I'm actually going to dove right into number four, which is find a realtor. So if you have a market that you're interested in or market multiple, I want you to reach out and grab a realtor and start diving into that market, get set up on the MLS search let the realtor know what you're looking for.
Sometimes they'll get pocket listings. They may get an Airbnb that's going to be listed, and before it hits Zillow, you now know about it. So step three, start looking for deals online. Step four, go find yourself a realtor and get set up on some in the list searches.
How do you find a good realtor?
So we're going to do a sub bullet to number four, which is How do we find a good realtor? And these are a couple really basic ways. One, if you have one realtor that you love working with, there's a very good chance that that realtor like me has a network of agents that they work with all over the country, possibly all over the world. So if you have one good contact point, pick up the phone and call them. There's a very good chance that they have a network of agents that they have already vetted for you and they could recommend to you if you don't have somebody like that, then go to Zillow. I mean, that's a really good spot to look. I like working with agents that have at least done 100 deals in the past 12 months.
That's not somebody who's going to be too busy for you, and that's not going to be somebody who's definitely inexperienced. 100 deals in 12 months is a lot of deals, so I'm looking for somebody with that five star record would be great with hundreds of reviews under their belts. I'm looking for the real deal, so I don't want somebody who does 12 deals a year and I don't want anybody who does 12 deals a year and can't even maintain a five star review.
So again, if you know an agent, start there. If you don't know an agent, go to Zillow. Look for somebody who does about 100 deals a year. Five Star Review, you're off to the races.
Step 5 - Find the Money 💵
If you are not a cash buyer and you want to be a finance buyer, well then you got to put your money where your mouth is and you got to get approved.
You got to go find a lender. So if you find a market, you find a realtor. A lot of times that realtor can even hand you a recommended lender. Lenders are always a buyer choice, so you can always go out there and not use that lender. But that's a good place to start. If you trust your agent as being the person who's going to represent you, that's what they eat and breathe.
And they have done enough deals to know a good lender from a bad lender. So start with your agent. See if they have any lender recommendations if you'd like to take that a step further, you can do a little bit more consultations with lenders, etc. but definitely get approved because in a quick moving market, if you're not approved, well an agent is not going to an offer and then you never get a chance at getting to your first investment property.
So go get approved.
Step 6 - Analyze a Deal a Day
Number six, this is super, super easy and if you love real estate and the intention really is to get to your first investment property, then you should be so eager to do number six, which is analyze one deal a day, one deal a day. That should not sound overwhelming to you at all. You should actually want to do this.
Hi, my name is Falisha. I'm a real estate agent. I write multiple offers for people a day, and when I'm done doing that, I am analyzing deals for myself for hours. It's something that I enjoy. I'm in Florida looking for Airbnbs. I'm in Washington looking for a lake house. These are things that you like doing. If you really want to be a real estate investor, this should not be difficult.
Step 7 - Make an Offer a Week
So analyze one deal a day. Now we're going to do the compound effect and we are going to make one offer a week. You're analyzing one deal a day that seven deals a week. On top of that, I want you to be placing an offer once a week. What's the old adage that even a blindfolded person will hit the ball occasionally like throw out the offers?
Step 8 - Repeat Repeat Repeat
Let's go. You know what you want. You found your agent, you found the lender. You're analyzing deals, you're doing your napkin math. It is time to put in the offers so it's as easy as that one offer a week. And here's the magic step. Number eight, repeat steps. Number six and seven over and over and over again until you add that first rental to your portfolio.
Analyze, offer, analyze, offer, analyze offer. It's that easy. I promise you, if you do these eight steps, it is only a matter of time until you have your first real estate investment property. I know that this may have seemed like a somewhat basic video, but this is for the people out there that need that little shake. They need that little moment of going.
So guess what? You can do this. I was there. Every real estate investor was you. At some point, you are fully capable of doing this. You will get your first real estate investment property. I'm super excited for you. I hope that you follow this quick guide. I promise I will dove deeper into some of these sub bullets.
And at the end of the day, remember if you have any questions real estate related or real estate investing related, who's your Home Girl? I’m your Home Girl!