249: Beginner's Real Estate Investing Guide
07/15/19 • 54 min
Two big mistakes are: 1) Renting out your former primary residence. 2) Only being invested in one market.
This Beginner’s Real Estate Investing Audio Guide also helps you step-by-step with buying an income property:
- Credit Scoring
- Mortgage Pre-Approval
- Writing An Offer
- Inspection
- Vetting A Property Manager
- Appraisal
- Insurance
- Closing
- LLCs
**The entire audio from this episode is transcribed into words and can be found at the end.**
People set up LLCs for asset protection, anonymity, or tax purposes. But there is a lot of administrative work. Is it even worth setting up?
Your FICO credit score has five ingredients. Down payment, debt-to-income ratio covered.
Mortgage pre-approval is better than pre-qualification.
Select income property in: job-growth economies, high rent in proportion to low purchase price.
Cash flow = Rent Income minus “VIMTUM”.
Why would someone sell you a cash-flowing property?
“Turnkey” defined. Should you make a lowball offer to a turnkey provider?
Also discussed: Negotiation Strategy, Earnest Money, Purchase Contracts, Management Fees, Management Agreements, Mobile Notary, Title Company, Rent-To-Value Ratio, Collecting Cash Flow.
__________________
Want more wealth?
1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book
2) Your actionable turnkey real estate investing opportunity: GREturnkey.com
3) Read my best-selling paperback: getbook.at/7moneymyths
__________________
Resources mentioned:
Mortgage Loans:
Find Properties:
Memphis & Little Rock Property:
Turnkey Real Estate:
QRP:
JWB New Construction Turnkey:
Our Tampa Real Estate Field Trip:
Best Financial Education:
Follow us on Instagram:
Keith’s personal Instagram:
Complete Audio Transcript:
Welcome to Get Rich Education. I’m your host Keith Weinhold and I’m here to help Beginning Real Estate Investors Today.
The biggest beginner mistakes to avoid, when you make an offer - can you lowball a turnkey provider, and all those buyer steps like LLCs, mortgage pre-approval, inspection, appraisal, and closing. Today, on Get Rich Education.
_____________________
Welcome to GRE. This is Get Rich Education Episode 249 - and this is your Beginner’s Real Estate Investing Audio Guide. Hi, I’m your host Keith Weinhold.
We’re talking about how to get into long-term buy & hold RE investing - and that’s because it’s the most generationally-proven way to build wealth.
First, let’s talk about a couple of the biggest mistakes that real estate investors make - it’s being invested in only one geographic market. Often, that’s the market that they just happen to live in.
There is more risk with being in only one market than most realize, because you’re now tied to the fortunes or misfortunes of just one area’s economy.
Another substantial, common real estate investor mistake is that they continue to hold onto one - I’ll call it - special - property in their portfolio that they usually need to get rid of - but they have either sentimental ties to it - or they just hold onto it for convenience, and do you know what that property is?
I’m actually talking about a specific property here.
It’s the home that THEY YOU USED TO LIVE IN yourself. Well, what’s wrong with renting out the home that you used to live in yourself?
You might still have the preferable owner-occupied financing locked in on that one - and afterall, that’s a better rate than you could get on a non-owner-occupied rental.
The problem is that the property probably doesn’t perform BEST as a rental.
But you might be clearing, say $500 per month by using your former primary residence as a rental today.
Look, for you, it’s often about the cash flow - and yes, it is about the cash flow.
...
Two big mistakes are: 1) Renting out your former primary residence. 2) Only being invested in one market.
This Beginner’s Real Estate Investing Audio Guide also helps you step-by-step with buying an income property:
- Credit Scoring
- Mortgage Pre-Approval
- Writing An Offer
- Inspection
- Vetting A Property Manager
- Appraisal
- Insurance
- Closing
- LLCs
**The entire audio from this episode is transcribed into words and can be found at the end.**
People set up LLCs for asset protection, anonymity, or tax purposes. But there is a lot of administrative work. Is it even worth setting up?
Your FICO credit score has five ingredients. Down payment, debt-to-income ratio covered.
Mortgage pre-approval is better than pre-qualification.
Select income property in: job-growth economies, high rent in proportion to low purchase price.
Cash flow = Rent Income minus “VIMTUM”.
Why would someone sell you a cash-flowing property?
“Turnkey” defined. Should you make a lowball offer to a turnkey provider?
Also discussed: Negotiation Strategy, Earnest Money, Purchase Contracts, Management Fees, Management Agreements, Mobile Notary, Title Company, Rent-To-Value Ratio, Collecting Cash Flow.
__________________
Want more wealth?
1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book
2) Your actionable turnkey real estate investing opportunity: GREturnkey.com
3) Read my best-selling paperback: getbook.at/7moneymyths
__________________
Resources mentioned:
Mortgage Loans:
Find Properties:
Memphis & Little Rock Property:
Turnkey Real Estate:
QRP:
JWB New Construction Turnkey:
Our Tampa Real Estate Field Trip:
Best Financial Education:
Follow us on Instagram:
Keith’s personal Instagram:
Complete Audio Transcript:
Welcome to Get Rich Education. I’m your host Keith Weinhold and I’m here to help Beginning Real Estate Investors Today.
The biggest beginner mistakes to avoid, when you make an offer - can you lowball a turnkey provider, and all those buyer steps like LLCs, mortgage pre-approval, inspection, appraisal, and closing. Today, on Get Rich Education.
_____________________
Welcome to GRE. This is Get Rich Education Episode 249 - and this is your Beginner’s Real Estate Investing Audio Guide. Hi, I’m your host Keith Weinhold.
We’re talking about how to get into long-term buy & hold RE investing - and that’s because it’s the most generationally-proven way to build wealth.
First, let’s talk about a couple of the biggest mistakes that real estate investors make - it’s being invested in only one geographic market. Often, that’s the market that they just happen to live in.
There is more risk with being in only one market than most realize, because you’re now tied to the fortunes or misfortunes of just one area’s economy.
Another substantial, common real estate investor mistake is that they continue to hold onto one - I’ll call it - special - property in their portfolio that they usually need to get rid of - but they have either sentimental ties to it - or they just hold onto it for convenience, and do you know what that property is?
I’m actually talking about a specific property here.
It’s the home that THEY YOU USED TO LIVE IN yourself. Well, what’s wrong with renting out the home that you used to live in yourself?
You might still have the preferable owner-occupied financing locked in on that one - and afterall, that’s a better rate than you could get on a non-owner-occupied rental.
The problem is that the property probably doesn’t perform BEST as a rental.
But you might be clearing, say $500 per month by using your former primary residence as a rental today.
Look, for you, it’s often about the cash flow - and yes, it is about the cash flow.
...
Previous Episode
248: Why Property Managers Are Heroes with GRE's John Collins
Property management is the glue that makes your investment stick together. But it’s a tough job.
GRE’s own John Collins has done management consulting on a project of 159 single-family rental homes.
Problems he encountered:
- 30% pay rent late or not at all
- Arson
- Unassigned parking spaces
- Domestic violence
- Abandoned car
- Condensation
- Pets and pests
- “Jerry Springer Show” in leasing office
- Unwanted boyfriend that wouldn’t leave
- Syringes found in home
- Daylight coming in through baseboard
Upgrading tenants from C-Class to B-Class.
Raising the rent attracted better tenants.
With just a $3 monthly rent increase per unit at a 6% cap rate, the project value increases $100,000. We break down the math.
What gets measured gets improved.
Maintenance issues occur with a property about quarterly.
Practicing “tactical empathy”.
To contact John, e-mail [email protected] with “For John Collins” in the subject line.
__________________
Want more wealth?
1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book
2) Your actionable turnkey real estate investing opportunity: GREturnkey.com
3) Read my best-selling paperback: getbook.at/7moneymyths
__________________
Resources mentioned:
Contact John Collins via e-mail:
Mortgage Loans:
Turnkey Real Estate:
QRP:
JWB New Construction Turnkey:
Our Tampa Real Estate Field Trip:
Best Financial Education:
Find Properties:
Follow us on Instagram:
Keith’s personal Instagram:
Next Episode
250: How To Raise Rents And Retain Your Tenants, Dayton
Tenant retention begins before move-in:
- Use a move-in checklist with the tenant.
- Move-in gift and packet.
- Communication.
Ongoing tenant retention during occupancy:
- Inspections every six months.
- Be attentive with service calls.
How to achieve a rent increase:
- 45 days’ notice.
- Use phone.
- Substantive reason: increase in property tax or maintenance costs.
- Remind tenant of moving costs.
- Offer an upgrade - carpet cleaning, ceiling fan, etc.
- 2 - 5% annual increase typical.
We discuss why not every tenant is worth retaining.
Dayton, OH has 1% rent-to-price ratios and an MSA population of 800,000. Also:
- Proximous to Cincinnati and Columbus.
- Health care.
- Military.
- Manufacturing.
- 3 Amazon fulfillment centers within 45 minutes.
Learn more about the Dayton turnkey provider here.
- In-house property management.
- Use luxury vinyl plank, white kitchen cabinets, newer HVAC & water heaters.
- 1-year and 3-year warranties.
- 97% occupancy rate.
- Leases up to 18 months.
- 3/1 SFHs: Rents $750 - $1,300 | Purchase prices $75K - $120K. Detached garage. 800 - 2,000 sf. Usable basement is additional sf.
- Property tax 1.8 - 2.1% annually as a percent of property value.
- Rent promise: Provider starts paying rent to you if your property is vacant 30+ days.
__________________
Want more wealth?
1) Grab my FREE E-book and Newsletter at: GetRichEducation.com/Book
2) Your actionable turnkey real estate investing opportunity: GREturnkey.com
3) Read my best-selling paperback: getbook.at/7moneymyths
__________________
Resources mentioned:
Dayton Turnkey Property:
Mortgage Loans:
Turnkey Real Estate:
QRP:
JWB New Construction Turnkey:
Our Tampa Real Estate Field Trip:
Best Financial Education:
Find Properties:
Follow us on Instagram:
Keith’s personal Instagram:
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