Well, it’s been a long road but I am finally to the stage where I can think about purchasing my first property. I’ve gone through many of the advanced real estate investing classes with Renatus. Specifically these are the courses I have completed so far: Market Analysis, Understanding Mortgages, Buy and Hold Day 1 & 2, Lease Options, Subject-to Purchases, Private Hard Money, and Fix ‘n Flip Day 1 & 2. Obviously all are important, but my intentions are to be a landlord and have rental properties, so the Fix ‘n Flip classes aren’t quite as relevant for me, however there is still a lot of good information in there that I will use. Of course if your intentions are to fix and flip properties, those classes are essential to you.
My goal is to find and purchase a property and have it ready with tenants in it by the end of 2015. There are obviously several steps that I need to take in order for that to happen. First, I need to assemble my team of people that will help me through the process. The first person on my team is my mentor Steve. He’ll be coaching me through the process and helping me understand anything I have questions on. Then I’ll need to have an accountant working with me. This person will help me save on taxes and will help me create the general structure of my business. I will need to find an accountant that understand real estate investors because I want to make sure I get all the tax breaks that I can. I would also like to find an accountant who does investing himself.
I also need a real estate attorney. Someone who will be able to read all my legal documents and provide legal advice. Also obviously there is always a risk of a tenant taking me to court over something so I need to be prepared for that.
Since I will be looking to purchase properties at a discount, there will need to be work done on the home to get it rent ready. So I will need to find some good contractors who will fix up my property at a decent rate.
Since I intend to eventually have dozens of properties, I’ll also need to hire a property management company to mange all the properties for me.
Another important step in all this is doing the math to make sure that I buy my property at an amount that will allow me to cash flow it. My mentor gave me a spreadsheet that I’ll be using to calculate costs. I don’t want to give away everything that it calculates, but keep in mind that the mortgage is only one part of the expenses of owning rental property. There are repairs, a management company to pay, lost rent, taxes, insurance, administrative fees and other expenses to account for.
Because of all the expenses that go into owning a rental property, I’m going to need to purchase the property way below retail value. So I’m currently re-watching the Deal of the Decade class from the Essentials Course. This course talks about how to use the courthouse in your county to find properties that no one else knows are even for sale. This way you can beat the market to the property and get it way below value.
So from here out I have quite a few things to do! I’m glad that the learning phase has helped me get this far and now the “do-ing” phase is about to start. Feel free to contact me if you have any questions!