You learn A LOT when going through your first purchase of a property. No matter how much education, reading, and learning you do, you'll never be completely prepared for the journey ahead. But, here are the biggest lessons I learned that will hopefully help you along the way!
1. Looking into investment properties outside of your local area (even out-of-state) IS a viable option.
2. If dealing with a Turnkey Company, compile a list of questions for them and interview them. Not only do you want to get as much detail about their product and services available, you need to feel them out as a company. The first step is to determine if this is a company you can trust and do business with.
3. If looking at properties outside of your local area, don't expect them to look anything like homes in your neighborhood. Our country is SO diverse, whether it's culturally, architecturally, socially, economically...and so on.
4. Quick, but thorough due diligence on a potential investment is key. Have a checklist prepared and look out for any red flags. At minimum, check: Zip Code stats, Zillow, Trulia, county tax numbers, previous tax assessments, Google Maps (what's around the immediate neighborhood?). Understand the neighborhood, understand your expenses, understand your income, understand EVERYTHING!
5. It is TOUGH committing to your first property. Especially if it's a property you've never seen before! You're going to have an endless number of questions. And maybe even doubts!
6. USE the BiggerPockets Real Estate Investment Calculators before you purchase and get a detailed report of the financials.
7. Immediately after finding a property that looks good as an investment, do your research and put it under contract right away. In most cases, you can get out of the purchase if the inspection comes back horrible. Take action, jump in, and be aggressive if you find a deal.
8. If real estate investing is your strategy, you HAVE TO COMMIT and put your money where your mouth is. Make sure you have financing readily available and be mentally prepared to watch a big portion of your savings account drop after your down payment.
9. As a "first-timer" there's a ton you will not know about what it takes to close on a property. Look over every single document you receive and ask questions if you're unsure about anything. Reach out to connections that understand the real estate business. Reach out to friends that have purchased houses in the past. Reach out to your old friend's father who is a realtor. Reach out to anyone that can offer assistance and ask questions on the BiggerPockets forums.
10. Network, network, network. You never know where someone might be willing to help you. I wasn't getting much response from my Turnkey Company on property photos (definitely not a good sign), which was very frustrating, but thankfully Aaron from Indianapolis was willing to drive by and provide amazing insight.
11. Get confirmed timelines, push contractors on questions you have, after all, you're paying them for a service, and they need to follow through. Get a proper inspection and the full renovation details!
12. What to do when there's a renovation period and you have some "down-time?" LEARN, LEARN, LEARN. Hop on blogs, listen to podcasts, meet people! I'm learning so much more AFTER I closed on my property than prior. It's crazy.
13. Real Estate Investing is not meant to go smooth 100% of the time. You will run into issues, delays, unexpected challenges. It's part of life. But, it's a matter of moving on and finding a solution.
14. TRUST. You've got to trust in your strategy and you've got to trust your connections and relationships on the ground. If you don't trust them, it's time to make a change.
15. I HIGHLY recommend visiting the market you want to invest in. Make as many connections as you can before getting out there and arrange as many meetings as possible. Strong relationships are integral to investing in real estate, especially out-of-state, when you are not a quick drive to your property.
16. Create a separate checking account for any new rental properties you own. Keep accounting clean!
17. Interview multiple Property Management companies and compare how their rates and terms compare.
18. Know the asset class you're investing in and understand the risk/reward. Yes, you'll get better cashflow (on paper) with more affordable properties, but a bad tenant can cause a world of trouble. I learned the hard way and am now shifting my focus to higher priced properties, higher rent, and better quality tenants.