8 Steps To Buying Your First Rental Property

In this video, Brandon Turner shares the 8 most basic steps a newbie real estate investor needs to take in order to land their first rental property investment! If you’re looking to invest in rental properties or real estate, watch this video, use these tips, and be on your way to becoming a real estate investor.

(0:00)

Hey, what’s up guys, I want to give you eight simple steps to land your first real estate investment property. Stay tuned.

(0:16)

What’s going on everyone? My name is Brandon Turner, host of the BiggerPockets Podcast and author of The Book on Rental Property Investing, and a bunch of other books. And today, I want to lay out a very simple strategy for getting your first real estate deal. Or maybe if you’ve done one before your next real estate deal.

(0:17)

So I had this conversation the other day with a new investor, somebody looking to get into real estate. And we talked about a lot of stuff over about an almost an hour’s time. And at the end of the conversation, you know what they asked me, they said, “Brandon, can you just simplify and just give me like, step one, step two, step three, to get my first deal done?” And I was like, “Alright, I think people can appreciate that.”

(0:53)

Let’s just get real simple here. So today, I’m gonna lay out eight steps that you can follow and if you follow these steps, you will become successful in real estate. I guarantee it. You ready for this? All right now if you like these steps, make sure you do me a favor and click that thumbs up button below the video. Let’s get going.

(1:10)

Number one, educate yourself so you know exactly what you want to do. You know, a lot of times we think that the path is really complicated and difficult to get something done. But in reality, our lack of action or lack of movement is simply because we have not decided, we’ve not decided what we want to do. And so the first step is to gain a basic general education so you can decide what it is you want to do.

(1:36)

Now in real estate, you’ve got a lot of options. It’s one of the reasons we love real estate investing. You want to buy giant skyscrapers, you can do that. You want to buy simple little houses, you can do that. You want to buy a mobile home, you can do that. I have a mobile home park business right now. We buy mobile home parks, who does that? I do because it’s fun.

(1:52)

And so you can choose what you want to do. But the key is, you’ve got to decide. You’ve got to make that decision. If you don’t have a very clear idea of what you want to do, you’re just going to keep wandering around wandering around. It’s like looking for a job. If you don’t know any idea what kind of job you want, where do you even start? How do you start having the conversations you need to?

(2:13)

So it’s really, really, really important that you decide what you want to do and the way you get that is through a general education. The best way to do that I would recommend podcasts are excellent. If you can listen to an interview style podcast, like the bigger pockets podcast, with 75 million downloads, or any interview style real estate podcasts. Listen to the stories of other people and look for stuff that just resonates with you, that makes you get fired up and say “Yeah, that’s what I want to do!”

(2:39)

Maybe you want to do the BRRRR strategy, which is one of my favorites, are you want to house hack, or you want to, I don’t know, buy one rental house every year for 10 years. Whatever your strategy is, step number one is to get a basic education, so you can define exactly what you want.

(2:53)

Step number two, I want you to practice the math over and over and over for that type of real estate deal until you’re an expert at it. I believe that knowing how to analyze a deal is the number one, number one, most important skill a real estate investor can have.

(3:09)

I mean, the great thing about real estate is that unlike the stock market, or most any other investment in the world, starting a business doesn’t matter, whatever, you really don’t know how it’s gonna turn out. But in real estate, you can get really accurate predictions on what the future looks like because we know what the general water bill of the property is. We know what the general cost of electricity is going to be on that property. We know what a property is going to rent for. Those are all questions that we can answer.

(3:34)

So when you know how to analyze those deals, you can see what next year looks like in profit, the year after, 20 years down the road. Now, is it gonna be perfect? Of course not. But you can get a pretty good estimate of what your future looks like. Therefore, when you know how to do the math really, really, really well, you can find great deals, avoid bad ones. When you have great deals, you can bring in partners. You can find more money. You can get easier financing. You can make earlier retirement happen. Those are all the benefits of knowing how to analyze the deal.

(4:06)

So spend a lot of time doing that. And if you want to get in a real life example of me analyzing the deal, I’m actually doing a live webinar this coming week over at biggerpockets.com/webinar where I’m going to analyze a real life deal together with you from one of your markets. So biggerpockets.com/webinar. I’ll hopefully see you there. Moving on.

(4:23)

Step number three, start looking for deals online. This kind of relates the same number two, the deal analysis, but I want you to go to like realtor.com or zillow.com or Redfin.com and just get deals to practice. Start to run the numbers. In fact, I would recommend, like do one deal a day. If you just set a goal of doing one deal every day, it’s kind of like working out.

(4:45)

If you just worked out every single solitary day, you’d understand every machine in the gym pretty soon. You’d understand how it all works. You’d build up momentum and you’d start getting in shape. And so the important thing is the consistency. So start finding one deal every day that you can just find online. Don’t even worry about buying it.

(5:01)

In the beginning, just get good at running the numbers, which was step two, and finding those deals online, which is step number three. Again, doesn’t have to be good deals. You’re just getting your reps in right now.

(5:12)

Alright, step number four, get a real estate agent and have that agent set you up with automatic emails for whatever criteria you’ve defined. You’ve already, remembered in step one to find what it is you want. So if you’re looking for duplexes, or triplexes, great! Have your real estate agent set you up with automatic emails for the type of property you want.

(5:30)

Not only are you looking online for deals, but now you’ve got actual pipeline. You’ve got a pipeline of deals coming into your inbox that you can start running the numbers on. Because here’s the truth about real estate guys, this is so important, fundamentally important, every property out there has a number that could make it a good deal. Everything! This house, that house, that house, every house. Every property has a number that could make it a good deal.

(5:51)

So your job as an investor is not to blindly walk around trying to find some mysterious, great deal that nobody seems to have found. Your job is to go out there and just find leads, which is what we just talked about, get them and analyze them to find out how much you can pay for them. And then look, maybe your number is close to what they’re asking, maybe not. But your job is not to go and land a deal, your job is to work that process over and over and over.

(6:16)

Which brings me to step number five, go get pre approved from a lender. Now there are a lot of ways to buy real estate, especially if you want to get creative with it and use other people’s money. I mean, I wrote entire book called The book on investing in real estate with no and low money down, and I built most of my portfolio using other people’s money.

(6:32)

That said, if you’re just getting started, go get qualified or pre approved for an investment loan. It’s probably gonna be 20 or 30% down. If you don’t have that money, then you’re going to need to get a little more creative. But either way, step five is go to a bank or a lender and go try to get pre approved.

(6:50)

Maybe you’ll get it. Maybe you’ll find out that you have some cool bank loan that’ll let you do it for less money down. Or maybe you’ll have to do something more creative. But either way, you’ll know because you went to that lender and had a conversation. So step five is go find a lender or a bank and have the conversation.

(7:05)

Now if you’re on BiggerPockets, go to the Network tab, and hover over network and drop down, it’ll actually have a spot for “Find a lender.” BiggerPockets actually works with a number of different lenders that understand real estate investment strategy. So I highly recommend checking that out.

(7:21)

Alright, step number six, this relates back actually to a similar thing we talked about earlier, but I want you to do it, again, is start analyzing one deal every day. You understand this is not a very complicated process. We’re just getting leads and we’re analyzing them. But now that you’re pre approved, or at least have an idea of how you’re going to finance that deal, now I want you every single day to analyze one property. No matter how you get the lead, every single day analyze one property.

(7:46)

Let’s move on to step number seven, make an offer once a week. Once a week make an offer because you’ve analyzed seven deals that week. So find the one that’s closest to whatever they’re asking and make an offer. Because you know how much money it costs to make an offer? Nothing. It’s free to make an offer. So why not ask?

(8:03)

A lot of people are so afraid of making an offer. Infact when I talk to new investors all the time they tell me, “I can’t find any deals.” The question I always ask them is, “How many offers did you make this week?” You know what the answer always is? None.

(8:17)

Well of course you’re not getting any deals. You’re not making any offers. So the guy who’s like, you know, sitting at home at 50 years old without a girlfriend or wife saying, “I can’t find anybody.” I’m like, well, have you ever asked anybody out? Well, no. Well, there’s your problem. Like you’re not going to get the results you want if you don’t go out and pursue those things. That’s why step number seven was start making one offer every single week.

(8:39)

And step number eight, repeat step six and seven, analyze offer, analyze offer until you land a deal. I said earlier this is a guaranteed process. That’s what I mean by if you just repeat steps six and seven over and over and over, analyze, make an offer. And you’re going to get better. You’re gonna find out how to get better leads. You’re going to get better at the financing. You’re going to find people that can you can work with. But as long as you stick with that, find leads and run the numbers on them and make offers.

(9:08)

You’re going to get the deals you want long term. That’s it, don’t confuse yourself. Just figure out what step you’re on of those eight steps right now, and get to work on it. Like right now, like make this the last video you watch today. Go out work on your business.

(9:22)

And hey, if you enjoyed this video, make sure you give me a thumbs up button below the video. And be sure to like, comment, subscribe, all that good stuff. And if you want to follow us on Instagram @biggerpockets and I’m personally @BeardyBrandon. For BiggerPockets.com, this is Brandon Turner, signing off.

Transcribed by https://otter.ai