In this video, I'm going to show you
how to buy your first rental property and the five mistakes
you cannot make if you want to be wealthy. I got so lucky
on my first rental property. It was a condo
that I actually was going to live in. I knew nothing about real estate,
but I just happened to buy the perfect rental property. I don't recommend you guys do this. You have to be educated. Even if this is going to be, you know,
you think your first home, it's still probably
not going to be your forever home. So you want to make sure you buy the right
rental. The first mistake you have to avoid
is picking the wrong location. Buying in an okay location is so much
cheaper than buying in a great location. The problem is it's going to be harder
for you to rent that location. So you're going to have more vacancy and it's not going to rent for
as much as if it was in a great location. The good thing about my first property is it's right in the heart of Scottsdale,
so I have no vacancy. Whenever somebody moves out,
somebody else wants to move in. The most vacancy I've ever
had is a couple of weeks now. I almost bought a property in Phenix. It wasn't a great area,
but I could actually get a bigger place and I really, really,
really wanted that property. And luckily
I was not able to get a loan for it. It needed a lot of work. And there was it was a high crime area
and it would have been much harder to rent and would have rented for a lot
less than the place that I have now. The second mistake you want to avoid
is buying a condo with stairs or buying a single family home
with an upstairs master. Now, some of you younger
people are thinking like, who gives a it about stairs? But the problem is, is the older you get,
the harder stairs are on your body and some of your best
tenants are older people. So if you have stairs or you have a single
family with that master upstairs, you're basically eliminating
a big group of older people that don't like the stairs
or can't use the stairs. Then even younger people, if you have dogs
or you're a pet owner, they hate stairs too, because especially in a condo,
you can't just take your dog out. Every time they have to go out over 2
hours, you yourself
have to go up and down the stairs. So you're really eliminating
two groups of people. You're eliminating old people
and people with dogs. That's probably 50
to 75% of the people that rent from me. So take my advice and get a first floor
unit or a ranch style home. Or if you get a single family home
with stairs, make sure the master is on the first floor. I almost made this mistake as well. I was literally closing on a third floor
Cano unit as my first property when the one I ended up buying listed
like I was in closing. And then this one listed that I bought. That was the first floor. And I'm so thankful
because that third floor unit would have been much harder to rent. And ironically, the lady that was selling
it was an older lady, and the reason she was selling
it was because of the stairs. The third mistake that you can make
when buying your first rental property is assuming
it's never going to be a rental property. So I kind of touched on this at the beginning of the video,
but when I bought my first condo, I thought I was going to live there
forever. I was 27. I thought, I never need anything
but this little condo. I'm fine with it. Well, fast forward, you know, ten years
and it's now a rental for me. So whenever you you're buying something,
even if you think this is for you, you have to understand
there's a big chance that you're one day going to rent it
and you want that option to rent it. So you should always plan for all of these
things we're talking about today to make it a good rental. So if you need to or if you want to,
you can easily convert it to a rental. Mistake number four
the stairway is too damn high. Kind of. I always talk about fixed debts. The problem with an easier way
is it's definitely not fixed. It goes up every single year. The mistake that a lot of people make is buying it
in a way that's just too expensive. They promise you things like cable
and Internet being included. But the problem is, is now
you have this big it's a way that you pay more on
because you have cable and Internet and then you have a tenant in here
that maybe doesn't want cable. And some of my tenants
don't even want Internet. They just use their phone hotspot. So they're not going to want to pay you
for that if you try to build them
part of your age away. And those two ways
are usually in the three or $400 range when they start,
including the Internet and the cable. Another big mistake with the highways
are the ones that have restaurants. We have a few of these here in Scottsdale. And those properties don't sell
well because the highways are on 600 a month
because they offer a restaurant. Well, guess what? Your tenants are probably never going to use that restaurant and you're probably
never going to use that restaurant. So now you're paying an astronomical away,
Bill, for something that nobody cares about
and nobody's going to use. And it's very hard to take that bill
and transfer part of it to the tenants. You just really want a cheap it's way and let the tenant handle their own cable,
let them handle their own Internet, let them handle their own tennis courts,
let them handle their own restaurants. They just want a nice place to live. Most tenants don't even use the gym,
although the gym is a nice feature. But I think on most of my condo complexes,
the H-2A is around 200 to 50 a month and then in my homes
it's around $100 a month because there's a little bit less that's included there. So you just really want a cheap H-2A, definitely under $300 a month. Ideally, you'll get a nanny two way
property all together, but those are a bit tougher to find in a place
like Scottsdale Misting Up or five. For those of you, first time property
buyers is working with the wrong realtor. This is a huge mistake
that people just don't think about. Realtor you use will make or break
the deal that you buy. The one mistake I did make on my first
deal is I did work with the wrong realtor. In fact, I actually lost out on the initial property
I wanted because of my realtor. This is because my realtor
let the seller's agent accept my offer and not put it in
writing until the next day. So when they got a better deal later
that night, they just took that deal
and then kicked me to the curb, even though verbally
they had accepted my offer. When I asked my realtor about it,
she simply said it was unethical of them. What I know now from working with a good
realtor is what she should have done is lock them into a written contract
and given them a 5 p.m. deadline to sign it and get it back to me. This would have liked my offer in
and made it so they could not accept somebody's
offer later. I can't stress enough to not work
with a realtor that's a family member or friend that does this part time
or hasn't been doing this for years. You really need to find a realtor. It's not afraid of confrontation, is
a hustler and can get the deal close.
