How to Buy a Rental Property in the Next 90 Days

http://www.biggerpockets.com/renewsblog/2014/03/08/buy-rental-property/ Discover the 8 steps needed to buy your next rental property in 90 days or less. Also, download a free one-page PDF to help you see the "big picture!" I was sitting down for dinner with a friend the other night and he said to me "Brandon, I want to buy my first property but there is so much information out there. I just want to see the whole process, neatly outlined, so I know my step by step plan." And I thought "Isn't' that we all want when learning something new? We want to see the whole picture, not just broken up parts. Today I want to help you do just that -- learn the step by step process for getting your first rental property in the next 90 days. For those of you who like something tangible to look at, at the end of this post I'll show you where you can download a free 1-page PDF summary of this process- neat and clean, just like my buddy ordered. Alright, let's get started. Step one: Get Pre-Approved. Unless you plan on paying cash (which would be great) you are going to need a pre-approval letter from the bank or other lender. We start with this step because I don't want you wasting time only to find out you can't afford it. Your lender will help you know exactly how much cash you'll need. Step Two: Get in Touch With a Real Estate Agent. Don't just call the name on the park bench by your house. Look for an agent who is willing to spend the time needed to help you get the perfect deal. Get recommendations from others and pick someone you get along great with. The best part is, a real estate agent is paid by the seller- so it's free for you to use one! Step Three: Define What You are Looking For. Let your agent know exactly what kind of property you are interested in. If it's a duplex, you don't want to waste time looking at single family homes. And vise versa. Step Four: Start Looking Yes, you'll actually need to spend some afternoons with your real estate agent looking at potential properties. And like dating, the more you look at, the better you'll recognize "The right one" when it comes along. Don't be afraid of looking at properties that might need a little TLC, but don't get in over your head either. Once you find the right one, you'll need to do Step Five, which is Step Five: Do The Math A rental property is only as strong as it's math. (yes, you should Tweet that) Run the numbers and make sure it pencils out. Be conservative, and be sure to plan for property management, vacancy, repairs, and more. I'd recommend running the numbers through a good property analysis tool, like The BiggerPockets Rental Property Calculator to make sure you are looking at all the facts and figures. Moving On Step Six: Make an Offer Okay repeat after me: I WILL NOT OVERPAY Negotiate with the seller and stick to your math from step 5. You might go back and forth a few times, and you might even lose the deal and have to start over. But whatever you do ... Do Not Overpay. Soon enough you'll get an offer accepted and you'll be ready to move on to Step Seven: Do Your Due Diligence At this point, you want to make sure there are no hidden surprises at the property. Hire a property inspector to walk through every inch of the property looking for potential problems. If you find any, either : suck it up if it's not too bad, ask the seller to fix it if it is bad, and if it's really bad -- walk away. During this time your agent will help you shuffle the correct paperwork between them, your lender, and your title company. Step 8: Close on the Property It's been a journey, but finally you are ready to close. You'll show up to the Title Company (or attorney) and they'll take care of the rest. You might even get some chocolate at the front desk! Once the title and deed are recorded at the county, you'll get the keys and be the proud owner of your very own rental property! Now comes the fun part -- managing your properties. And for tips on that, you'll have to wait for another blog post! Screen Shot 2014-03-07 at 5.27.08 PMAs promised above, I created a simple 1-page PDF of these steps so you can print it out and hang it on your wall or just keep in your files. To get it, simply click the photo on the right and head over the BiggerPockets FilePlace and download it for free! Finally, if you could do me two quick favors: Share this video on your Facebook or Twitter account Leave me a comment below. I love comments and would love to chat more about this stuff!

Comments

1. yup! as a housebuyer with 6 property portfolio, he's pretty much telling the truth. Appropriate for the UK market too.
2. I find it sad that no 1 is you state "preapproval'. The fact is you do not need a bank or a lending company to purchase a home. There are so many ways you can get into a property with no money down. Rent to buy is only one example and it gives the buyer the opportunity of improving the property while living in it, therefore creating uplift and equity.
   
   If any of you listening to this are feeling sad because you have been refused a bank loan due to being self employed, not earning enough (according to the banks criteria) commission based employment, have a bad credit history, have gone bankrupt or perhaps do not have a larger enough deposit look into other ways of getting into the market. You do not have to be approved by a bank to get your own place you just need to do good research, educate yourself and do some work contacting agents and perhaps owners directly. There are plenty of people who are struggling to hang onto their properties due to a lot of different reasons and some of these people will be more than happy to have someone come along and rent to buy their home, this can save people from bankruptcy bad credit rating while at the same time be a passageway for someone to get their own property safely. Sometimes we need to think how can we help meet the other persons needs.
3. Haha guys the background music is from a German funny guy :D It is called "Mein bizeps brennt" and it means "My biceps is burning" :DDD
4. I'm guessing at 19 I'll need a decent down payment and a good suit to get people to take me serious. I'm getting my real estate license which may mean I can find my own deals? Haven't asked about that that. Thanks for the print out!
5. Funny but informative!!!
6. There are a bit more nuances I teach on the pre-approval process. First, I make sure they are the right fit before letting them pull your credit (why waste your time, right?) What market are you in, at home or out of state? Depending on where you actually find a profitable market, its sometimes in your home market, and other times you just have to go out of state - that determines who you should start vetting as a potential lender. Great video - of course this is only 4.56 minutes :-)
7. why do you make people go through that just to register n our website... its pain in the ass bro. just to download a pdf, no one wants that
8. this entire process reeks as a scam.
   i have zero interest in property ownership in 2016
   
   you get scammed at every step
   
   no thanks
9. very true and correct . I'm 25 years old and I'm already looking at my 4thrental property , started when I was 22 , got a job that paid 16 bucks an hour , saved up and I made it happen. now I love for free because my rentals cover my living , and I make and extra $2800 a month cash .and from the looks of it my equality has gone up on all of them . .. so no excuses you fuck lazy fuck bags time to get to to work or sit the fuck down and be a fan , and watch others play the game . sit there with your big foam figure if you want to soft all your life and make excuses . good night and good luck
10. R.I.P headphone users at 1:40. You blew my ear drums out.
11. So it's just like buying a residence that you plan to live in. Cool! Thanks for the info.
12. I love Bigger Pockets ... You all always give the best advise :-)
13. Thanks for the information!
14. Very informative. I really agree that the role of a real estate agent plays a huge part in sealing the deal when it comes to renting property.
15. FYI, I found a site where you only have to pay 10% down no PMI on investment properties. It's Homepath.com.
16. I think the step by step process he lays out is correct. But there are some things to think about. If you are considering investing in rental property and leveraging(creating a loan)  you will make very little if anything for quite some time. (unless you see some appreciatory gains and decide to sell) After paying your mortgage, property taxes, maintenance costs as well as anticipating the vacancy rate(5%-10%), the make ready expense between tenants and finally the legal expense for evictions, most people are doing quite well to simply break even. Not to mention all of your time and hard work that it takes to keep everything moving. 
    The much better and profitable alternative is saving your money and paying cash. You may not be able to buy a property in 90 days but what's the point if you make very little at best and lose money and time at worst.
17. Always good stuff!
18. I LOVE YOU BRANDON!!
19. How is he so freaking good at making these Videos LOL. He should be on TV, I swear.
20. I love it!