My plan was to try and replicate the process as much as possible. Unfortunately, life got in the way. I got divorced in 2012 and investment properties were no longer on my must do list. Now that I’ve gotten back on my feet, I find myself constantly checking foreclosure listings just to see what’s out there.
Right now my big savings goal is to save enough money to buy another investment property. I’m hoping that this year I’ll have successfully saved enough.
I’ve already started searching for that diamond in the rough. Here’s what I am looking for in an investment property.
My master plan is to flip houses. However, I am realistic and I know that there’s always a chance that my flip won’t sell. Luckily, I am perfectly okay with a renting a home, too. Houses in my area are dirt cheap so regardless of whether I rent or sell I’ll still wind up with a profit.
Whether you want to flip or rent a home location should be a huge deciding factor. I want to purchase a home that someone else will want to buy. A pretty house in a trashy area will do me absolutely no good. I want an ugly house in a decent area.
Look for homes in areas that you would live in. If you wouldn’t want to live in a certain area would you expect that someone else would, either? I think this is especially important for finding high quality tenants.
I want an ugly house – something that I can put a little work into and make look good. However, I only want a home that needs cosmetic updating.
Ugly wall paneling, nasty carpet, wall paper everywhere – I can handle that. Bad roof, foundation problems, mold? No, thank you.
My investment property budget will be pretty low. I don’t want to make any major repairs. A solid house in need of cosmetic updates is what I’m looking for.
Finding a property that is structurally sound is extremely important for anyone looking for a first time investment property. Buying a home with major repairs will burn out your budget and likely ruin the experience for you.
If you’re purely looking to rent a property instead of flipping it you may even want to consider a newer home so that you don’t get wrapped up in renovations.
You should always get an inspection before purchasing an investment property. Just because a house looks structurally sound doesn’t mean that it is. Shell out a couple hundred dollars and have an inspector take a look at the home before you buy.
I check for foreclosures in my area at least a few times a week. Here in rural Ohio homes start as low as $14,900. However, the houses that are in good locations, are structurally sound, and are priced right sell super-fast.
When you’re looking for your first investment property you need to be ready to buy. When I bought my first property another offer was already on the table so I bid $200 over the asking price and luckily, my offer got accepted.
To understand what the housing market is like in your area find a real estate agent that you can trust. With his guidance you’ll know when a property is really a bargain price. If you don’t know any real estate agents ask friends and family for their recommendations.
When you see that perfect property at a good price be ready to snatch it up.
There are also other factors to consider such as school districts and amenities. If you wouldn’t live in the house you’re purchasing chances are it’s not that desirable for anyone else either.
And, be sure to look for hidden costs when you get the report from your inspector. The first home I bought had a cistern rather than public water. I was oblivious to how much it cost to switch this over and didn’t check until after I purchased the house. It ended up being well above what I had budgeted. Be sure to check on the prices of repairs – even if you don’t think they’ll amount to much.
When you’re ready to purchase your first investment property research properties and talk to a real estate agent. Take your time. It might be a little while before you find the right property but it’s better to be safe than sorry.
Are you ready to join the cult of real estate investors?