10 Tips For Buying Your First Property In Chattanooga
Just full disclosure, I’ll be looking down at my notes. If you see me doing this number, that’s what I’m looking at.
Number One, Get A Game Plan.
So, what that means is, figure out, you know, how risk-averse you are.
What kind of houses do you want to invest in? How many units do you wanna wind up with?
How much do you want to spend? And there are a whole plethora of questions you could ask yourself.
But before you get started, you’re definitely going to want some kind of game plan.
You know, rental investing is just that. It’s an investment so there are some inherent risks to that.
You know, most people don’t really understand that or it doesn’t even cross their minds.
So, you know, real estate investing is, you know, it’s just like any other investment, it’s risky.
Other Thing TO Ask!
And then the other thing you want to ask yourself is, you know, among other things, do you have a system for, you know, screening tenants?
Do you have a system for showing these houses? Or do you have a system for getting them fixed up if needed?
Do You Have A System?
Or do you have a system for….you know, how are your tenants going to get in touch with you?
And you know, do you have the stomach for having difficult conversations and posting eviction notices on, you know, Christmas Day, if you need to?
You know, those are the kind of conversations or the kind of discussions you’ll need to have, you know, with yourself or with your partner, however you see this shaking out.
Get A Good Real Estate Agent. (10 Tips For Buying Your First Property In Chattanooga)
This is so important, these are going to …this person is going to be your source of, you know, potential leads for you to invest in.
So, you want to find somebody that’s investor-friendly and I’ll talk about it a little bit later, but you might be able to find somebody on like biggerpockets.com, it’s like a social network for real estate…exclusively for real estate investing.
There are lenders on there, agents, other investors, you name it, they’re on there.
Research Your Market.
You know, is there a specific area you wanna be? Are you more tolerant of low-income housing and everything that brings?
Do you want to get into high-income housing? You know, there are all kinds of variables that go into what makes a city a good place to invest in.
Make Sure That You Know!
You know, there’s…you want to make sure that you know, is the city growing are people moving there for jobs? That kind of thing.
So, you can find all that stuff out through census data, all that’s free and there’s a bunch of other ways you can find out information like that as well.
Understand the type of tenant you’ll attract.(10 Tips For Buying Your First Property In Chattanooga)
And this kind of overlaps with what I just talked about. It’s also going to overlap with, you know, what I’ll talk about here in a second.
But yeah, understand the type of tenant you’ll attract based on the type of house you’re looking to invest in.
So, in low income, and, these are all generalizations. And, you know, there are always exceptions to every rule but again, these are generalizations.
Low Income Housing!
So, with low-income housing, anything under like 500 and below on upwards to like 600 to 650, you’re going to have high turnover, you’ll probably also have high maintenance costs because these houses are also….you know, they’re probably a little bit older, not as well kept up.
And then, excuse me, with moderate housing, anything from like, 700 on up to like, I would say 1,295. This will probably vary depending on who you talk to.
But, you know, generally you’ll have low turnover, you’ll have low maintenance.
Needier Than Others!
Again, these are generalizations, some tenants are needier than others, some houses require more work than others.
So, you know, generally, moderate-income housing you’re going to have, you know, lower maintenance, lower turnover in general.
And then anything over like high income, like 1,300 or more, you’re generally going to have higher turnover because this group of people is more, you know, better able to purchase a house.
You’re probably going to have high turnover. You might have higher maintenance.
Sometimes tenants in this bracket can be, you know, a little more needy in general but generally, you know, they take care pretty…let me start over, they take care of the house pretty well in general, once they move out.
Create An Mls Search With Whoever You Find Is A Realtor To Send You…to Automatically Send You Any Leads.
On market houses generally sell quicker than, you know, anything that’s off-market.
So, you know, a good way to find off-market, like what I mean by off-market, if you’re not familiar is, you know, anything that’s not formally listed for sale.
Anything that is formally listed for sale, you know, if you like the MLS, you know, everybody else can see that too.
So, you’re competing with a bigger pool of people for on-market houses.
For, you know, off-market houses, this is where you would drive through a neighborhood, you know, see which properties are distressed and, you know, try to get a hold of the owner and see if they’d be willing to sell.
You know, some people are, some people aren’t but, you know, off-market houses are…generally have less competition.
And that’s also, you know, where you might be able to find a pretty decent deal.
Not that on market houses aren’t decent deals but I think you know what I’m saying.
Get A Good Handyman. 10 Tips For Buying Your First Property In Chattanooga.
So, one thing I wanted to elaborate on with getting a good handyman is if you send them out to a bunch of houses that, you know, to evaluate rehabs on for houses that you haven’t bought, they’re probably not going to, you know, return your call.
I mean, these people have…you know, are trying to run a business too and, you know, be selective with where you send your handyman out to.
You Have Them In Pocket
So, that way you have them in your pocket for a while. Handyman, agent, property managers can make or break an investment.
You know, once you find a good one of those three or all three, do what you can to hold on to them and keep them happy.
Make Offers And Prepare For A Lot Of Them To Get Rejected. (10 Tips For Buying Your First Property In Chattanooga.)
You know, as I mentioned a second ago, especially with these on market houses, there’s a bigger pool of competition.
So, you know, it can be sometimes…the competition can sometimes be pretty stiff. So, you know, be prepared for offers to get rejected.
It’s not the end of the world, just keep at it, eventually, you’ll get your first deal and every deal after that is going to be, excuse me, it’s going to be easier than the one before it.
Don’t Get Discouraged
So, don’t get discouraged if you have multiple offers get rejected before you get your first deal. If you’ve got, you know, if you’re crunching the numbers and, you know, these are the parameters you have to work with for a certain deal, don’t ever deviate from those.
It’s pretty easy for, especially for people trying to break into investing, they feel like oh, I got to buy something and, you know, it winds up being a bad deal.
Numbers Don’t Work
So, if the numbers don’t work, just move on, it’s not the end of the world, you will find…if you keep at it long enough, you’re going to find something.
I can’t tell you the number of people that, you know, reach out to us, they’re just desperate to buy something and it doesn’t always work out, unfortunately.
So, you know, if you’ve got your parameters for a deal stick to those, don’t deviate. It’s going to be better for you in the long run.
Take Your Time. (10 Tips For Buying Your First Property In Chattanooga.)
It’s kind of similar to the last one but yeah, don’t rush into something especially if you’re out of state investing, don’t rush into something that you don’t feel good about.
You know, if you feel good about it, the numbers work, by all means, pull the trigger but, you know, if for some reason, you don’t feel good about it, just walk away.
You’re Going To Find Something
It’s not the end of the world like I said, you’re going to find something if you keep at it long enough.
The Last One You’re Going Make Mistakes, And That’s Okay.
The key is to not make one big mistake, that could derail…that could get you stopped, that could get your real estate investing stopped before you even get started. You know, dig in a pretty decent sized hole.
You know, as I said, you’re going to make mistakes along the way and that’s fine. Just learn from those and, you know, don’t repeat the mistakes and don’t make that one big mistake.
Have Any Questions?
If you have any questions, I would love to talk to you, help you get started in investing. I mentioned it earlier but there’s a website called biggerpockets.com that has a ton of resources.
There’s forums, books, there’s a ton of helpful people on there. They’ve got books about out of state investing, taxes.
I said out of state investing already, also said taxes, getting started in rental investing, raising money
My Believe Is One They Have On There
I believe is one they have on there, estimating rehab costs, you name it, they’ve probably got it.
So, you know, if you’re new to this, definitely check it out. You can also reach out to me directly, I would love to help.
Again, my name is Alex Smith, I’m here in gkhouses Chattanooga and you can call me 423-648-7368 extension 3. You can also email me firstname.lastname@example.org. Thanks everybody, see you.