If you haven’t read the page on Getting a Mentor, you should read that first. There’s no substitute to getting a living, breathing, mentor. Assuming you have read that, let me talk about a few basic getting started steps here.
First understand that investing in real estate is almost unbounded. What I am talking about here is specifically investing in single family residential rental houses in the Dallas, Fort Worth, Denton area. Some of this may be good tips no matter where you are but I can only talk about this area with authority given my expertise.
1. Again, get a mentor!
2. Get pre-qualified as an investor
Know what you can do. Investing in single family rental real estate is an investment. You need to have a definite sum of money allocated for this purpose and you need to have well defined goals. Get references for good lenders or mortgage brokers. Make sure they have worked with investors – the specific kind you are or want to be. Setup an appointment and talk to them about your position and your goals. Narrow it down to three or four brokers/lenders you want to work with. Don’t just go with the person who tells you they will get you the most money. Make sure they have a history of actually closing loans, on time.
Then choose one lender and ask them to give you a pre-qualification letter.
A pre-qualification letter would state how much loan you are qualified for and may specify the terms. It should state that they have verified your statements and checked your credit. Most sellers of homes you will be interested in will require this. They want to know you can close.
3. Get an agent who owns and operates rental homes
I can’t stress enough that you need to get an agent who is also an investor. Your mentor should be able to give you some solid references. It’s good for the agent to know the mentor and what that group believes in. Make sure the agent is actively practicing in the business of owning and operating single family rental homes. If an agent tells you, “I work with investors all the time” – that’s not good enough. One can’t gain enough knowledge by watching from the sidelines. You got to dive in to learn. If your mentor is also a licensed agent or broker, ask them if they will be your agent as well. Just ask – but ask only after you have developed a relationship where you trust that they will place your interest above their own.
The next step is to look at what kind of properties you want to own and operate – which will be my next post.