Today was the first step. I filled out the pre-qualification for the loan. Need to have that done first and foremost. Next I have to go online and thaw my credit reports so they can do a hard pull. Oh well, get ready for my credit to be knocked down a little due to that.
I have a place/location in mind and a few houses in mind. The numbers all work, not a ton of money, but the overall returns are good – and good diversification over the next 5 to 10 years.
I’m thinking that buying the house will be the easy part. Getting a renter and doing the books will be the harder part only due to the learning curve, but that’s also why I’m aiming to purchase a single family home that’s not going to be the best return on investment, but something I can use to learn and better my knowledge base in this area.
Going to start a new section call “Real Estate Investing” so folks can follow along there.
I’ll toss up all the numbers once we have them.
The rates are not looking as good as I had hoped. Looks like they’re in the 5% area right now for commercial type loans. The good news is, the local credit union is only looking for 20% down for a single family as opposed to 25% down that I was prepared to do.
The 20 vs 25 is actually better on my cash on cash return (cash I put down / cash I get back = percent return)
Taxes are low and rents are reasonable. Looking at a place within walking distance of downtown and other amenities. Things a renter would be looking at and entice them into renting.
Also to help with the learning curve, I’m not wanting a fixer-upper. It’s going to need to be turn key. Give me a month or two to go through it, touch up any paint that needs it, any maintenance, etc and then it can go on the market for a rental.
Here’s to the first step.