Beginner Real Estate Investor Checklist
- Research your potential markets, ideally close to where you live starting out so you can be hands on if you want or need to be.
- Research investing strategies. Are you thinking of flipping houses, being a traditional style landlord, doing short term rentals such as air bnb, or doing something different such as leasing commercial properties or buying land. People have been successful at all the above and many more but find one that fits your personality, experience and interest you.
- Research financing. If you have cash available, great! Even if you do though you may want to look at financing to keep your cash reserves up.
- Banks and Loan Companies will want to see more money down and have a higher interest rate on investment properties so be ready for that. ( a way to get a round that is house hacking and that is where you buy a single family home and rent out a spare bedroom to offset the cost or you can scale that up to a duplex, triplex, or quadplex in a lot of areas and in a lot of loans up to 4 units is still covered as a residential loan as long as you are going to live in one of the units yourself.
- Hard Money Loan. Is a loan from an individual or non-traditional bank. They can have less requirements then a bank but tend to have higher interest rates and shorter terms for loans.
- Once you have done the research on where to invest, which strategy to use, and how to finance. Now is the time to find a property.
- One way is through a Realtor and the MLS
- Popular websites: Trulia, Zillow, and other real estate websites
- Other Marketplaces: Craigslist, Facebook Marketplace, etc.
- Talk to people. Talk to family, friends, co-workers and let them know you are looking to buy. This is a great way to get started and find a deal with less competition.
- Look into Auctions, Foreclosures, and any other deals that may be better for you than other buyers
- You found the deal- Now get it under contract. Be sure to include specifics/details and use clauses and contingencies in your favor.
- Clauses and Contingencies can be advantageous to both parties. If you do not understand the wording then ask for an explanation or to change the wording. Fully understand the contract before signing anything. This goes for buyers and sellers alike.
- Do the inspections and due diligence in the time frame specified in the contract.
- Ask for any repairs or renegotiate the contract after inspections if needed.
- The seller will now complete repairs in the agreed time frame before closing, if any repairs were agreed upon.
- Final walk through to be sure the property is in the same or better condition
- Go to closing- You should have reviewed the closing numbers (money) a day or so beforehand.
- Close the deal! Sign the papers! You now have a property that you can use to produce income with the strategy and plan you have decided on!
Best of luck!
Feel free to reach out with any questions or comments. Investing is risky and never a gurante.
Research, knowledge, and experience can help put the odds in your favor though so keep learning and working hard!