Your First Investment Property

Yesterday evening Jeff Brown over at Bawldguy wrote a post titled Your First Real Estate Investment – Often The Most Critical. As always, it is an excellent resource for the real estate investor.

His title really got me to thinking. And while I agree completely with his post, especially since he mentioned Kansas City, the other side of his title should say something to the effect of how important that first property is that it doesn’t run you out of real estate investing.

I love working with all real estate investors. But there is a special satisfaction with working with “newbies.” They come all excited and are ready to purchase just about anything. An experienced investor I seldom have to say “WAIT!!!” to. But a newbie? I’m constantly talking them OUT of properties.

This may sound very self serving. But the whole experience reminds me of what gold-fever must have been like. At this time or your real estate investing career, having a professional’s opinion matters more than ever.

It doesn’t matter how much those rental homes will appreciate over the next 25 years using tax deferred exchanges if you buy an investment property that drains money from your grocery bill every month, has tenants that need evicting and other issues you never even considered. You’ll sell, take your losses and tell everyone how hard real estate investing really is.

When what you really needed was a proper education, a professional consultation, and a clear head. Take this advice, tag it on to Bawldguy’s post and get ready to go. We’ll see you at the top.

2 Comments

Filed under Personal Real Estate Opinions, Real Estate Investing

2 responses to “Your First Investment Property

  1. Jeff Brown

    >They come all excited and are ready to purchase just about anything.

    They don’t get to even know about properties for which I’d have to talk them out of. At least that’s what we try to achieve. They still manage to tell me of their ‘friend’s’ place, etc.

    In the end Chris, your point cannot be defeated. This is why we insist, (as the first part of my post alludes to) all of our clients have what WE define as a prudent cash reserve account. If they refuse, which is very rare, we refuse to work with them – with only one exception. If they earn a massive job income, they get a pass – but only until their portfolio reaches critical mass even for them. Then they create the reserves – or we part company.

    Looking forward to talking with you today.

    Great post. It reminds me of what I’ve often said to my younger clients.

    “You have more testicular courage than is safe.”

  2. Chris Lengquist

    Point made. But my newbies still find homes I wouldn’t recommend. craigslist, newspaper, websites. Oh they find them and want to see them. If there’s a possiblity, I’ll go look. Usually I regret it. But there are properties that slip under my radar.

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