You are hiring a mentor with your agent have they done what you are trying to do before? If not, find someone else.
If you can get a mentor, get one. If not, absolutely follow the first agent rule.
No: every deal is a no, until its a yes. Investing is mostly about saying no. Do less. Don’t force it. You will literally see 100 no’s for each yes. You will visit 20+ no’s for each yes.
You will suck. In the beginning you are stupid and have to work hard. Pay your stupid tax. Eventually it gets easier. Lean on your mentors.
It is still work. Real estate is passive until it is active. Then passive again. Then active again… etc
Avoid a yeah-but property. Yeah it’s great but … is on a major road, under power lines, has 26 stair walk up, has box gutters
Read a bunch of books. But realize that reading is not doing. Once you feel like you are saturating with reading benefits you probably are.
Once you are in, be ready for the adventure. Something will go wrong. Things will be a bit crazy. You didn’t buy a bunch of stocks though, this is what signed up for. It takes $300k in stocks to make $1k/mo in passive income (4% real return). You can make that much in real estate with 2 properties.
Avoid spreadsheet magic. Any deal can look good on paper. 80k of repairs is not 4x 20k of repairs, it is 8x the work, coordination, and RISK (aka pain in the ass)
Get it under contract*. Once you know what a good deal is, if you find one JUST GET IT under contract (have them accept your offer). You can ask for concessions during negotiation. The important point is getting exclusivity on the deal. *Assuming earnest money/hand money/deposit is refundable you will be able to get it back (some states like NC this isn’t the case)
REPAIRS & REMODELS
Paint and floors. Paint and floors. Paint and flooring is the highest ROI improvements you can do.
Is this for 10 years or 1 tenant? Some repairs you are doing for 10 years, some for ones tenant, nothing for “now”. Spend money on floors and roofing. Paint you can go ok on. Don’t monkey patch problems they come back again. It will make your real estate active.
Leave the walls where they are cowboy. And while you are at it, no they aren’t going to be plumb.
Timeless, not trendy. You aren’t trying to get in the cover of Home and Garden. You are trying to get passive. Staying with the trends is active
Bathrooms and kitchens are money pits. the rooms that will cost you a lot to redo.
Bathrooms. No shame it’s refinishing a tub. No shame in throwing a new tub surround on over old tile.
Kitchens. Leave out as many systems as possible (garbage disposal, dish washer). Buy used appliances. Refinish cabinets, don’t buy new.
Electrical. Use $20 GFCI outlets and mark them as not grounded vs upgrading your panel.
Plumbing Just use sharkbite fittings. Don’t do plumbing on Saturday or holidays.
Know how you would do it, even if you don’t plan to do it yourself. If you don’t understand how to do it yourself you will probably get ripped off or monkey patched. There are exceptions to this rule. Hire them and refer other people to them.
Trash is cheap. Pay for trash removal. 400 from basement to the dump is a fair price.
Do your own demo. You save money and learn how nasty the job will be.
Refinish cabinets with liquid sandpaper and a paint sprayer.
Do a room in order. Remove faceplates/fans, then paint ceiling, then paint walls, then redo the floor. Then do the trim and return faceplates.
Resanding floors is a mess. Dust everywhere. Don’t have good advice on this yet, but it is a LOT of work.
There are no small jobs. If you are doing a job, you will likely wind up doing 3-4 jobs. Be ready for this. Give yourself time. If you can’t turn the water back on because this didn’t go right, is that OK?
If you plan to DIY, do your first deal before kids. So much easier. So much more flexibility to do the work yourself.
SCREEN THE FCK OUT OF YOUR TENANTS
Do they show up on time for the showing? Do they communicate well? Basically act like you are dating them. They will part of your life for 12+months.
What does their car look like on the inside? That is how your house will look soon.
Will they make their problems your problem? Do they talk about their mom in the hospital to you?
Run their credit report. What % of their income will rent be + other debts be? Want this to be <= 50%.
Run their credit report. Do they have any late payments? Why is their credit score less than 650?
Background check. Do they have violent crime history? Prior litigation with employer? 2 DUIs?
Financing isn’t that hard. People like to talk about money a lot, but if you have a job and less than 4 mortgages you can get financing in the USA. The government wants you to want to buy a house. Consider a local credit union. And do shop around, price is the main thing. Don’t use hard money for your first deals.
People will think you are rich. As soon as you have “an investment” property, anyone who knows will treat you differently. If you had the same money in the stock market, they would never know. But now that you have “houses” you are a fat cat. This is especially true of your tenants. Just be the property manager (or hire one)