First investment property, besides financial acquisition what would you suggest for first steps?

I have figured the financial part of acquiring a property. But what steps would you take to insure that your first investment is not a flop? Just trying to create my stepping stones to a great buy and a great single family investment property. Thank you
In Buying Property - Asked by sami a. - Jul 23, 2013
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Answer(s)

Claude D.
Broker/Agent
Boca Raton, FL

4 is better than a single family: therein is an investment property;that can be purchased with the same financing created for a single family. One vacancy is not 100%, Plus many more good property rights and privileges. Step #1 Identify a property, #2 Budget, #3 Plan finance, #4 Management

Jul 24, 2013
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Naren B.
Broker/Agent
Boca Raton, FL

Look into Duplex of Fourplex, it will keep your financing easy and also give you a better return on investment in most cases....
Look at the area/location, check vacancies around, what does your competition do to keep thier units filled, are they offering free months, lower security deposits...
Does this include water or does the property have seperate water meters per unit.
Its the little details that will make all the difference between a flop or a success.
For financing try a credit union and try to get a better rate. don't be in a rush to buy, research, study, and when you make an offer, ask for a reasonable amount of due dilligence time to review all documents, leases, have an inspection and an appraisal...etc.
Good Luck !, Hope you are very successful.

Jul 25, 2013
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Roger B.
Broker/Agent
Tucson, AZ

"Make your profit when you Buy"; Pay below today's market value; don't gamble on the market rising. If it does then it's a double win!
Plan your exit before you buy. Owning and especially managing residential rental property is deceptive from the outside and not everyone is cut out for it. I disagree with the other responders to this question who suggest small multi unit things. Make you first dip a SFR (try to avoid home owners associations if you can, if not make certain that they are properly managed and stable. If you decide you made a mistake and wish to exit or if you made your profit and its time to go you need someone to step up and provide your Buyer a lone so you can get your cash out. The government will always provide some sort of favorable high leverage financing for a buyer for SFR when that may not be true of any Multifamily. Remember a rental house is someone else HOME but a multifamily is always an investment to a lender.

Jul 25, 2013
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Steve C.
Broker/Agent
Frederick, MD

I would agree with the SFH as your first investment for a couple of reason. LOCATION; often SFH have a more family oriented environment. # OF TENANTS; Granted you have the risk of 100% vacancy however, you only have one tenant to deal with. Also, the SFH prevents you from having conflicts amount the tenants in the building – i.e. one tenant complaining about another tenant or about you giving the appearance of offering a better ‘deal’ to one tenant over another. STABILITY; the SFH renter is more often looking for a longer term rental than one in a multi-tenanted building. CRITICAL - TENANT’S RIGHTS: There are a number of local regulations that protect the tenant’s rights when renting and looking for a rental unit. Be very knowledgeable about those regulations or you could find yourself in the cross hairs of a lawsuit or worse

Jul 26, 2013
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Michael C.
Broker/Agent
San Leandro, CA

1. Buy in an area that has the potential of prices going up.
2. Make sure you get all the inspections: property, roof, pest, fireplace, title report, appraisal,etc.
3. Buy in an area that is easy to rent out. IE: near freeways, transportation, shopping, schools, etc.
4. Determine rental value in the area and rental competition-how many other rentals are available
5. Buy a property that is reasonable condition unless you like fixer uppers.
6. Determine your cash flow position with your accountant. Income/expenses, tax benefits.
7. Check with city about rental laws, licenses, permits.
8. Talk to other property owners in the area.

Jul 26, 2013
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Mark C.
Broker/Agent
New York, NY

In general you want a low vacancy area. If there are several houses on the market or many "for rent" signs, you might want to avoid that area. The other criteria (demographics, schools, etc) are all very subjective. If you're looking for cash flow I would agree with Claude D, try and find something with more units. Since you specified single family, I'm guessing you're looking for some place to park your money. Appreciation might be an important consideration also so liquidity is not an issue down the line. What I did was create a 5 year plan to set goals and that proved to be extremely important for me. Either way good luck and congratulations and should you need any advice please feel free to contact me.

Jul 29, 2013
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John P.
Broker/Agent
Glen Burnie, MD

Engage an educated and experienced Real Estate professional: One that is practicing full-time in the geographical or financial area of the investment. If you acquire this relationship early in the process you will find their compensation is paid by the Seller at settlement. If not, negotiate a fee for their assistance. Don't wait.
Your largest risk is what you "Don't Know you Don't Know". If you are unrepresented and are in "First position" on this property, I will strongly suggest you are over-looking something or paying too much.

Aug 18, 2013
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