How To Buy Your First Rental Property (Step by Step)
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Published 2018-11-19
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Step 0: Because this is where it starts, you’re going to need a downpayment. How to save for a house:
• How To Save For A House (Plus EVERYTH...
Step 1: Unless you’re buying a property outright in cash, which I have a feeling is very few of you watching…get your credit in order. How to build your credit:
• The BEST way to begin building your C...
Step 2: Make sure you have your tax returns prepared. If you’re self employed like me, a lender will ask for your last 2 years of tax returns and take the average income of those two years. Be ready for this!
Step 3: TALK TO A LENDER FIRST BEFORE YOU DO ANYTHING. First, you’ll know EXACTLY what you can qualify for so you won’t waste your time. Secondly, if you find the right place, the lender already has all of your information so you can hit the ground running. And anytime you find a spot that’s worth buying, chances are, you’re competing with other people who want the exact same thing. So timeliness really, really matters here…the faster you are, the better the deal you can get.
Step 4: BEGIN LOOKING AT PROPERTIES. This is really meant to be the fun part…look at EVERYTHING you possibly can within your price range.
How to find a good deal: • How to find a good deal / off market ...
Step 5: Determine cash flow. The reality is that 95% of properties just don’t make sense to purchase for an investment…they lose money. It’s also the reality that at a certain price, EVERYTHING makes a great investment - it’s really important to understand these numbers.
Three ways to make money owning real estate: • Real Estate Investing: The 3 WAYS to ...
Mortgage Calculator: www.MortgageCalculator.org
Step 6: Look at properties that need minor cosmetic renovations!
Most profitable renovations: • Real Estate Investing 101: Top 5 Most...
Biggest Mistakes: • Top 7 Renovation Mistakes - AVOID THESE!
Step 7: MAKE OFFERS ON PROPERTIES! Expect that not every offer will work out…for me, I lose out on many offers because I offer a price where the numbers make sense, and if it’s any higher than that, I won’t buy it.
Step 8: Do your inspections! Make sure to do as many inspections as you possible can. Check the roof, the foundation, electrical, plumbing, if there are any leaks, bring in contractors for bids if it needs work…the more you do, the better.
Step 9: Understand escrow costs: • The HIDDEN COST of buying Real Estate…
Step 10: RENOVATE IT! Video on renovations: • Day 10 Remodeling Update - The 2 unav...
Step 11: RENT IT OUT! If you want to rent your place for top dollar, use REALLY good pictures, pick up your phone on the second ring, and be available anytime to show it. I promise if you do this, you’ll have no problem renting it out quickly. I personally like using Apartments.com, Craigslist, Zillow, Redfin, Trulia, and Reatltor.com…the more places you property is, the better. Never just limit yourself to one of these, DO THEM ALL.
Tenant screening 101: • Avoid the NIGHTMARE tenant and evicti...
STEP 12: SCALE UP!
Suggested reading:
The Millionaire Real Estate Agent: goo.gl/TPTSVC
Your money or your life: goo.gl/fmlaJR
The Millionaire Real Estate Investor: goo.gl/sV9xtl
How to Win Friends and Influence People: goo.gl/1f3Meq
Think and grow rich: goo.gl/SSKlyu
Awaken the giant within: goo.gl/niIAEI
The Book on Rental Property Investing: goo.gl/qtJqFq
Favorite Credit Cards:
Chase Sapphire Reserve - goo.gl/sT68EC
American Express Platinum - goo.gl/C9n4e3
All Comments (21)
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Here’s a list of the other videos that explain the process a little further that pertain to this video - enjoy!: How to save for a house: https://www.youtube.com/watch?v=qyQOoCmamIk&t=2s How to build your credit: https://www.youtube.com/watch?v=ukaWAjgkH9M&t=4s How to find a good deal: https://www.youtube.com/watch?v=9nHDT5XL4KY&t=36s Three ways to make money owning real estate and cash flow: https://www.youtube.com/watch?v=h8wNUaBgZTk&t=19s Mortgage Calculator: www.mortgagecalculator.org/ Most profitable renovations: https://www.youtube.com/watch?v=kW76liexoBY&t=2s Biggest Renovation Mistakes: https://www.youtube.com/watch?v=Tof5GMD0akc&t=46s Hidden escrow costs: https://www.youtube.com/watch?v=cN7n3wC9eAQ&t=64s How to screen a tenant: https://www.youtube.com/watch?v=hS8lIrzEwv0&t=154s The Best Real Estate Tax Write Offs: https://www.youtube.com/watch?v=sLaw91Baay0&t=6s Why I don’t flip real estate: https://www.youtube.com/watch?v=Uh15keMBjf8&t=6s The 5 Golden real estate investing tips: https://www.youtube.com/watch?v=57tt-L-Xbj8&t=5s
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I’m 13 but I like watching these vids to give me a good idea for when I become older
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If you wanna be successful, you most take responsibility for your emotions, not place the blame on others. In addition to make you feel more guilty about your faults, pointing the finger at others will only serve to increase your sense of personal accountability. There's always a risk in every investment, yet people still invest and succeed. You must look outward if you wanna be successful in life.
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Finally someone who's telling like it is - be patient, save, build your credit - not trying to sell us "secret" formula that only chosen few know.... Thank you for being real.
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Graham, thank you for shedding light on this issue please tell us how to use this recession to make gains! grew my reserve of $110k to over half-a-million dollars between Dec. 2007 and Aug.2008, but the market is different now
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This guy tells it like it is. No gimmicks or ploys, I really love that! Thanks for sharing your wealth of knowledge Graham.
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9:44 thats the brady bunch house.
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Thank you so much Graham for all you do. I watched this back in high school before college to get some general info and i’m finally making the money to afford my first rental property. My credit is amazing thanks to your advice and I just need to wait a few more months to have enough income history to approve for a housing loan
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I love the step by step. I think people first coming in to buying often don't know where to start or how to move forward. A simple, broken down step by step that goes start to finish is incredibly helpful.
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How about a tutorial about the process of renting it out? Like How long it takes to get a tenant? Turnover from a tenant?
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Best real estate video I've seen so far. Thanks! Also, thank you for the "sub-stepped" detailed videos! You, sir, are a gentleman and a scholar.
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Graham I just wanted to let you know that I’ve been watching you for years and you motivated me to finally start my YouTube channel. I kept telling myself that I don’t have time and I finally stopped making excuses and I started. Thank you for the motivation and keep up the good work.
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I just recently saw this video as I'm currently learning about real estate. Probably one of those most informative and best real estate videos I have ever watched!
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Numbers are wrong 2600 on mortgage and 3200 for rent is only 600 cash flow
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Love how your stuff has no gimmicks. Keep up the good content!
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This advice is absolutely perfect!! My late husband and I made the bulk of our net worth (approx US$1.95m at 35) from real estate flipping and rentals and we follow everything you’ve said 👍🏻
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Matte black for sure! Thank you for some inspiration I’m 25 and I feel like I’m about to open the doors to the rest of my life. Thank you.
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Graham!! I've been following your channel on YouTube for just about 2-3 months!! I closed yesterday on my first rental, Four house property!! You'd be proud, my man!! Everything you mentioned on this video is what I went through!! Thank you for your work!!
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Great video, Graham! I took the plunge and rented out my previous home (condo). It's a significant upfront cost, and can have quite a bit of risk, but the future income and potential appreciation can certainly be worth it. Especially if this is just one of many income streams in a broader investment portfolio.
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Hey Graham, thank you so much for such great videos! I watch your videos not only because it contains so much of valuable information but also because you sound so positive, genuine and honest on things you say. It feels that it’s doable. Thank you for fueling the positive energy and boosting it to get started. BIG THANK YOU!!! From NY
