The Basics To Investing in Rental Property – REIClub.com

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Rental Property Investments Are Great For Building Lasting Wealth. Here’s A Quick Video Explaining The Basics To Investing In Rental Properties…

Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I’ve got a quick video on the basics to investing in rental property, also known as ‘buy and hold’ real estate.

I personally love buying and holding real estate. It’s been a family business for over 20 years, and let me tell you, when you own more than a hand full of free-and-clear property, THAT right there is your retirement.

Acquisition
Avoid settling for “lesser” deals because of the rehab possibilities. A bad deal will suck all the profits out of a rental property. Excessive maintenance, code violation, etc…
A good deal is when you make money the moment you buy the house – the market has already proven it
Still remember to negotiate as if it were a flip deal. Every dollar you save is a dollar you make.

Funding Your Deal
– FHA – when using your own money
– Private lender
– Creative financing – subject to, seller financing

The Rehab
– Always allow more time
– Always get a second opinion, quote
– First time, check contractor references
– Find contractors at local rei clubs, or at big box stores (home depot)
– Be very stern on your budgeting
– Allow a 10-15% money buffer to account for misc. things – busted pipe, or cracked slab
– It’s a rehab, keep it simple, keep it livable.

Management – yes or no?
– You can manage property on your own.
– Very manageable 1-5 properties
– 10-15+ Consider using a management company, unless you have the resources
– Management Companies charge 7-9% of monthly rent.

Maintenance
– Manage yourself – Find your own handyman that’s accessible at odd hours
– Management – Most maintenance and costs require your approval. Costs are covered by overcharges,

Summary, CTA
If you are getting involved with real estate for the cashflow, then rental properties is the way to go. Investing in rentals are like investing in mutual funds, without all the risk, and the returns can be exponential from the cashflow, and the equity you’re building in the home.

Rental properties offer some of the best long term wealth in real estate. So if you haven’t considered this before, consider this now. Keep 1, Flip 3.

Following this concept, once you have kept 10 cashflowing properties, worth $100K each, you’ll have a million dollars worth of property. I didn’t even calculate all the houses you flipped during this time.

Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you’ll be automatically notified when we upload more quick video tips for you. Take care and good investing.

https://www.youtube.com/watch?v=ZTT77gF4HZM
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20 thoughts on “The Basics To Investing in Rental Property – REIClub.com”

  1. If a tenant is paying their rent directly through their employer, it eliminates any chance of them mismanaging their finances or for any other mishap to occur. Therefore, you'll have the peace of mind knowing that your tenants will be held accountable and will pay reliably. Rentremedy(dotcom), 1-800-931-0449

  2. You do you keep saying "you guys." This is YouTube. I'm watching this alone, as are most people. Stop shouting and just talk to us one on one. I can't watch anymore.

  3. I resisted using a management company for years. Now that my business is mostly commercial, I happily use a management company for the residential I have left. Once I found the right company, it has been great.

  4. Why do you think they give free bets away Jake? Do you really believe it’s because they just want to see people having fun, that they want to give you something for nothing? Or do you maybe think some people will be unable to stop and the companies will ultimately be able to make more money back than they have given away?

  5. You're not under control in a mutual fund. Also there are risks associated with buying mutual funds. Just like any other investments.

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