Thinking about becoming an investor - start small

July 20, 2016

 

With the real estate market being what it is the LA area, good income properties can be more and more tricky to find. A good rule of thumb for that first time investor is to start small, such as a duplex, tri-plex, or quad (4 unit building). Ideally, you want to select a structure that only has one roof to keep your maintenance costs down. Depending on what area you decide to look into, keep in mind that LA does have rent control, so if you don't like that idea as a property owner, you should look at other cities around the LA area.

  

Meet with your lender to get your pre-qualification done before you even start looking at properties. When listings do hit the market, they will go quickly, so you want to be prepared to write an offer. 

 

Your real estate professional will walk you through the things to look for, and what you as a buyer can request from the seller to understand the true operating expenses of the buildings. Also, do the tenants pay their rent on time? This is very important for a variety of reasons!

 

Nine times out of ten, the buildings will have tenants living in them, so you aren't able to see the interior of those units until you reach the inspection stage. The seller typically will not make the tenants aware that a building is being sold, because he/she doesn't want to cause panic. 

 

Speak with your real estate agent to have him/her direct you to the areas they see as good investment potential. Narrow down your search to two to three areas and start the process. There is a learning curve and it will feel a little painful in the beginning, but this is a great way to continue to build wealth and income for your future.  Happy investing!!

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