How To Buy Your First Rental Property (12 Steps)

How to buy your first rental property WITHOUT Using Your Own Money Or Credit, step by step and the general process involved:

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Step 1: Know Your Market!
This is just more than location, location, and location. This is also about the timing of the economy. When and Where is the question! Be prepared to do some research about where to invest and when you want to invest.

Step 2: Finding The Deals
Generally, you want to find deals that are hard to find and away from the public eyes. We call this "Off-Market Deals". You want to be the only buyer when dealing with a seller which gives you more negotiations power.

Looking At Deals By Driving:    • (NEW) Looking for Deals with Sam Kwak Part...  
Looking For Off-Market Apartment Deals:    • How to find Off Market Apartment Deals For...  

Step 3: Understanding Owner Financing
Owner Financing is a concept where you and the seller create an arrangement of making monthly payments to the seller in exchange for the ownership rights. This is a great way to bypass the need for bank financing!
Owner Financing Demonstration:    • Ep 35 - Owner Financing Negotiation Demons...  
Owner Financing Negotiations:    • How to Negotiate for Owner Financing?  

Step 4: Walkthrough The Property
You need to physically walk through the property to spot any errors, broken items, and parts of the property that needs repairs. This is huge! Not doing this can cost you THOUSANDS of dollars after you buy! So do this long before you even make an offer!
Walking through Airbnb Deals:    • Видео  

Step 5: Analyze The Deal!
Now that you walked through the property, start analyzing the income potential on the property. Find out what the rents are for the area. Once you determine the net operating income as well as the cash flow, you'll know whether the deal is a deal or not!
How To Calculate Numbers On A Rental:    • How to Calculate Numbers on Rental Properties  

Step 6: Make The OFFER!
This is where you have to pull the "trigger". Make the offer to the seller. Be VERY conservative with your offer. If the seller doesn't take your offer, don't try to force the deal! We prefer to use a Letter of Intent when dealing with owner financing acquisitions.

Step 7: Raising Capital
This is the part where the "no money of your own comes into play". Knowing how to find relationships that could become your partner in funding the down payment will be the KEY to buying your first rental property. Though you may have to sacrifice a little bit of profit, having some profit than not is better, right?
How To Raise Money:    • How to Raise Money for Real Estate  

Step 8: Managing Your Partners
Once you have your money partner involved, make sure you have an attorney help you draft an agreement between you and the partner. This is very important for any future disputes or even setting expectations.

Step 9: Closings
This is where you're actually going to fun the deal, sign on the dotted line and take ownership of the property! Be sure to have an attorney represent you throughout the closing as well as having a title company facilitate the closing process!

Step 10: Hire A Property Manager
Though you may be tempted to manage your own properties... It could cost you dollars and times trying to figure out how to manage your tenants and properties! When you're first getting started, I highly encourage you guys to focus on buying more properties than trying to manage your own.
How To Hire The Right Property Manager:    • How to Hire the RIGHT Property Manager? - ...  

Step 11 - On-Going Maintenance
Be prepared to have large maintenance items every 3-5 years! That being said, set aside some money from your gross rent to cover future improvements and repairs!

Step 12 - Rinse And Repeat!
Go out there and by more properties using the last 11 steps!

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--DISCLAIMER-- The suggestions, advice, and/or opinions that are given by Sam Kwak (The Kwak Brothers) are simply opinions. There are no guarantees of set outcomes. Listeners, guests, and attendees are advised to always consult with attorneys, accountants, and other licensed professionals when doing a real estate investment transaction. Listeners, guests, and attendees are to hold Sam Kwak, Novo Elite, Inc. and the Kwak Brothers brand harmless from any liabilities and claims. Not all deals will guarantee any profit or benefits. Listeners, guests, and attendees are to view and listen to all materials and contents furnished by the Kwak Brothers as a perspective based upon experience.