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How We Found Our First Rental Property – And Why We Bought Out of State
Back in September 2018 my husband and I purchased our first rental property out in Indiana. This has been a goal of mine for a few years now, and we decided that 2018 would be our year to finally do it. So here’s a snapshot of how we did that!
The Back Story
I started working for a property management company while I was still in college. I really enjoyed learning all about residential real estate through my previous job and through studying for my real estate license exam. It was quickly becoming a passion of mine.
In October of 2016, I came across a real estate networking website that I found very interesting. After a little bit of time, I started reading their blogs and listening to their podcasts.
I began to learn a lot about real estate investing all for free and terms like financial independence. Honestly, I was having a blast learning as much as I could about real estate investing! By the end of the year, I was determined to get into investing myself.
Related: How to Get a Free Education
2017 came and went. We had looked for houses in Colorado to purchase, but everything out here was very expensive, and we didn’t feel confident in any of the properties that we saw.
I let go of the idea of purchasing a house in Colorado that year but didn’t give up on learning about real estate investing. I continued to listen to podcasts, read books and read blogs.
Choosing Long-Distance
My husband and I got married in June 2018 and soon after the wedding I got the desire to purchase something again and this time I was holding myself to it.
Around that same time, I read a book called Long-Distance Real Estate Investing by David Greene. I knew that people were investing in real estate in places they didn’t live, but I never thought I could be one of those people…. Until I read this book!
In his book, Greene made such a scary thing sound so obtainable and he gives very practical steps on how to do it. After lots of prayer and long discussions with my husband, we decided to make it our goal to purchase our first rental property by the end of the year. We didn’t know exactly where it would be, but we knew that it wasn’t going to be in Colorado.
Finding Our Team
Since we were not going to purchase a rental property in Colorado, we needed to have good connections in other places. We had our search narrowed down to 3 metro areas– Chicago, Grand Rapids, and Indianapolis. These are the places I started networking in.
I found most of the people I connected with through BiggerPockets.com because the people on the site typically seemed to be true investors who were willing to help newbies, like myself.
I was a little nervous to start making those phone calls to different realtors and investors, but I pushed past that fear and talked to a dozen or so strangers. And let me tell you, it was a lot of fun and so worth it!
I ended up finding an agent out in Indianapolis that I really liked and thought could help me achieve my goals. We discussed the kind of properties I was looking at as well as the prices we were thinking about. He then got us in touch with a lender to find out exactly what prices we could afford.
Related: The Difference Between an Investor-Friendly Agent and an Investor-Experienced Agent
Picking A Good First Rental Property
Once we determined our price point we went on our hunt for a rental property. Our realtor started sending us some on and off-market deals from all over Indianapolis. We had to figure out the criteria for the rental properties we were looking at.
After a while, we decided we wanted to invest in a duplex, and after a little more searching we decided on a small growing town on the north-side of Indianapolis.
Some of the criteria we used to help find our duplex included:
- We wanted something we could add value to (but not a whole rehab)
- Something that would produce a minimum of $100 per door in rental income (after all expenses)
- A discounted property (lower than market value)
We ended up finding the property listed on Zillow just after it had a price reduction. It had been on the market for a little over a month or so at this point.
Our realtor went out the next day to check it out and did a video tour for us. It was a house converted into a duplex. The bottom level was recently remodeled and in great shape!
However, the upper unit was in pretty terrible condition, but we got a quote for the renovations and thought it was doable if we got the house at a nice discount.
We ended up putting in an offer lower than our actual targeted price, and they counter offered right at our goal – so we took it!
Thirty days later we did a remote closing from our kitchen table here in Colorado. And after signing our names a million times we officially became real estate investors!
This may seem like I am making it sound super simple to get into real estate, but that is far from the case! It can be easier after you have educated yourself. However, I have run into a lot of struggles and mistakes along the way!
Find out some of the mistakes I made by checking out this article!
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