This is a personal favorite of ours. It has supplemented income and provided a great boost in wealth and has given the ability to purchase other properties.
The most important thing you can do as as retail investor is to document a process to acquire an investment property.
After honing down a process, the biggest issues are competing with deals in “hot markets” the way 2020-2021 has shown to be.
For the retail investment property investor, there are many different ways to go about looking for a property to invest in.
For the sake of this process (and in the current real estate market), we will look at the following scenario
We put together a simple real estate investment process for those that are starting out. We recommend knowing and educating yourself on the process and industry lingo before committing.
Owning real estate has provided us a cushion for the unpredictable.Has it come with challenges… Sure it has. They are all worth it in the end if done right.
The last thing you want introduced into your relationship is a potentially stress inducing investment. There will be things that happen that may or may not be in your control.
We purchased our first home as a primary/investment home duplex that we lived in and planned to hold on to after we had moved out.
It was our first time managing tenants and a property. We did what we could to prepare for such a process.
We had some great candidate for the unit…
Or so it seemed
We interviewed and checked references on 3 potentially great candidates and then offered the unit to 1 individual that had “great” references.
Individual paid on time, kept the unit clean and was quiet until a year and a half later.
We are still unsure to this day what triggered this individual to act the way they did but they completely flew off the hinges.
Fueled by alcohol every weekend (and some odd weekdays), a piano that would travel easily through floors that was played at the wee hours of the morning and some digital/verbally odd language made the rest of the year a very stressful one for myself and my significant other.
The frustration of this individual spilled over into our relationship which became a very frustrating ordeal and questioned our decision on owning real estate.
After re-checking his references and cross referencing them with public records, we came to find out that the individual lied with the references.
Moral of the story: Trust but verify and listen to your gut if you don’t feel that is something right.
We preferred to find someone that has cut out a niche for themselves with these types of properties. Chances area they know the markets well enough to help inform you on:
We went with someone that was 4 years into their practice as they were still hungry enough to search and help bring prospective deals to us for review.
We wanted to get this lined up and out of the way early on so we knew what we could afford to purchase and we could run numbers more accurately in our analysis.
Costs for a loan do add up! Make sure you know what these numbers will look like prior to making an offer.
Account for vacancies/late and non-payments as well. The calculator we linked to above will help ensure you are not investing in a losing venture.
Ask your agent to put you on the MLS with a set criteria of:
You will receive a constant flow of listings and hopefully see something worthy of looking at.
Here is a small list of others sites you should use to create a flow of new investment properties: