Which Rental Property Should You Buy First? | Real Estate Investing
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- Опубліковано 28 вер 2024
- This video was made to help new real estate investors know where to start and what property to buy first.
Chandler David Smith has been investing in real estate for the last 7+ years. He currently owns 99 units of rental real estate and cashflows hundreds of thousands of dollars each year. He created this channel to help other new and experienced investors build their own real estate portfolio and a huge cash flow that comes with it. In this video, Chandler breaks down what he would buy first if he had to do it all over again. He helps new investors understand the pros and cons of living in their first investment property. This video will help you to know what your options are and which path will be best for building your real estate portfolio and cash flow the quickest.
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What are you going to buy first?
My budget is $500, so a box
Edit: 5 boxes
Henry Collins you can make a dolls mansion with those boxes 😹😹
Chandler Do you have partners ?
A porsche
Buying a duplex with my wife next month to house hack!🙌
Duplex first! Live in it, flip it. Rinse and repeat! Great video!
My first property was one with a studio apartment in a separate building on the property. Turned it in to an Airbnb and it has done amazing!
I was thinking about getting a condo 2 bd 1 bath and do the same.
@@876Millz That's awesome! I would suggest it if you have the ability and the rental demand. It has been such a blessing in my life to have the Airbnb to start investing in real estate.
Let me know if you have any questions on starting an Airbnb, I'd be happy to help!
Just bought my first single family. 35% under market(off market deal through a connection I built) . 25% down. Great area. Currently a tenant is in there, out in a month or two plan on putting 12-14k into it expecting to find other things thatll bump it to 18-20k which is fine. Then will move in and should be ready for another 25% down on the next one, next year! Love the channel, app rocks too.
Yes!!
I’m not gonna lie trading with Mr Michael Puma have really help me a lot. with his strategy and predictions are so accurate that I made $50k on my previous trades, Reach him for help on the email above my comments, I recommend him for newbies and for anyone seeking for help in trading.
How did it go?
@@karmasutra4774 Good I ended up spending 38k on the remodel. With total purchase price and remodels and what it is worth today im up 140k. Market softens and drops 25% ill be up 100k. Looking for a bigger home if a deal arises. Did a cash out refi have 18k left invested in the house of my own money. 3% rate. When we get our next house we will be making 30-35% cash on cash for cash flow + equity paydown when it’s rented. Thanks for replying was nice to look back and reflect!
@@crileymane Hello, have you put any % down on a new property?
OMG!! This transformations is absolutely amazing!! I newly started Bitcoin trade and I've been making losses but recently I see a lot of people earning from it. Please can someone tell me what I'm doing wrong
Why are you trading on yourself, do you love making loses, if you keep trading on yourselves you will never benefit from it
Trading on your own
Is't good, Actually it's not all about watching several tutorial videos that cost your time on a strate...
The most common mistake I see newbie make is rushing into trading without seeking for a legit guidance.
That's is true, you need an expect broker and professional trader to handle your trading and make good profits from your Bitcoin trade.
@@wilderjoaquin44 How can someone know a professional acct manager that is trustworthy and legit they are hard to find this period
I can’t stop thinking about the irony and insanity of Elon Musk becoming the richest person in the world why they individual who has spent $20billon.
And he currently Invest in Cyptocurrency.
No amount of money can certify Elon Musk. I’ll say he needed more that’s why he is investing on Bitcoins. Investing over 1.5 billion dollars.
He invested in Bitcoin because he is aware of the profit he would make.
@Tanimu Fatima My advice for everyone right now is to invest into the market 💲💲as it more profitable.
I wanted to trade crypto but got confused with the fluctuations of price
Great idea is to contact a local realtor that has experience with homes in the area you want to invest in. Have them give you their feedback, we will do it for FREE! Great video for those trying to get into real estate.
Great advice!
*Wait not such a great advice*
Look for agents that work with only investor and know their needs.
Ask them: what is a 1034? & How do I use it.
I feel like you should apply to be on The Graham Stephan Show. Not only would Graham appreciate the convo with you, but it could be an effective method to growing your channel further
yas they'd have so much fun chatting!
The smile that you have while talking is very encouraging to see! You're very inspiring!
So this will be far in the future but when you house is done being built, can you post a video of a game in the basketball court
Yes! 🤑😍
I have 100 thousands in my portfolio and over 50 grand in my saving can I start with a quadrudlex with Uber and Lyft as income?
Greetings from Houston , i have been able to build a good income by trading during the Pandemic till date with the Help of an expert advisor i met in a Tesla conference where Elon was present
Who is this advisor ?
@@ashwinaditi1039 Yes they do actually , I am a Nurse I started using a financial advisor last year, my total portfolio then was worth around $48K and is now currently over $110k with the latest Tesla bull and other trading assets
@@adamweah8037 Helen Howard Pratea is the advisor who mentors me you can get in touch with her and book an appointment with her from her website, by looking her full name up on the web .
Looking to buy my first duplex/ triplex if the numbers make sense.
Sweet! Congrats!
Hey Chandler! Could you make a video on estimating costs to make rent ready? I'm having trouble figuring out how to correctly estimate repairs in some of the properties I'm looking at. Great content as always, thank you so much!!
Become a remodeling contractor! Then you’ll know. Otherwise, you should be smart and stick to ready-made homes with no issues
What else do you tell the realtor when you are interested in that 4-plex? "If it fits your numbers", yes. But in terms of numbers do you give them only CoC return? Or also a purchase price range or additional numbers.
I give them my spreadsheet and show them the desired coc return I want with a 25% down payment. At that point I’m willing to look at anything they give me that meets those requirements and narrow it down from there
@@ChandlerDavidSmith Ah makes sense. So basically they can input all of the details such as purchase price, market rents, insurance, taxes etc. for you and then you can just review your own filled out spreadsheet when they come calling. Super smart Chandler, thanks for clearing that up!
When it comes to investing, what’s your say to anyone with over *100K $* looking for the best ways to invest it and as well make good earnings off it?
I’ve always been fascinated with investing and I need to start now. Could you possibly give more information about the lnvestment Professional and how I can reach out?
There’s no limitation to what we can achieve if you put your mind to it. You can do it.
Most successful people seek the knowledge and experience of Professionals who help them tackle issues relating to wealth management and growth but might claim to achieve success themselves without any help.
Can you make a video about why you don’t invest in commercial properties
I think it’s mostly because of the way loans are set up, but he does have stake in a law firm building
It is completely different from residential property. If you find the right tenants you could be set for life but they will sit empty for years costing you lots of money in costs. Do research before doing commercial property as I know several guys in that arena and half are losing their asses and can’t even sell their properties
Bro you asked this to him on his last few videos and he responded that he has some videos on that already and that he would think about making another 😂
Did you see the vid he did at a vacant mall in Houston? 😢
Been a subscriber since 5k, it’s awesome to see you grow man! Great vid!
Thank so much!! Means a ton!
Chandler. Have you ever considered purchasing a motel and making it into long term rentals?
Not specifically, but that’s a good thought!
I'm sure you know this. The price per unit is really cheap and tempting. I'm considering one however, the size of the units is a little worrisome. What are your thoughts on studio units?
@@joshrachelson7206 I'd tear down some walls and make as 2 bedroom units as you could squeeze in.
@@joshrachelson7206 for long term tenants you're going to really struggle with only studios. This would lead to potentially high vacancy rates and high turnover which are very expensive. Having a few as studios might work but in my experience you'll want at least some variety. I do like having a few studios as it really helps round out my offerings
@@mattcram3782 that's a smart idea
This is one of your best videos. Right on time for me. Thank you!! Love your channel
Thanks so much! Good luck!
This is very helpful. We are in planning stage in acquiring our 3rd rental property. We bought 2 condo rental in cash. It generates cash flow now because we paid cash. But I want to start looking in a cash flowing properties
So awesome!
The only downside of leveraging is if something big happens your screwed. Everyone says it won’t happen to them. In my town a factory got busted for releasing toxic gas in a neighborhood for years. The neighborhood instantly had people moving out. It’s now a undesirable area. If your rental was there you would be in trouble depending on % of your portfolio. A lot of investors lost big time in 08 due to leveraging. If you own it outright no one can take it from you :). I do enjoy your videos chandler. I just wanted to throw another angle on it
Great vid.
I live in the Bay Area, where property is STUPID expensive and duplexes are rare, and even a single-family home is nearly impossible with my budget.
Would it make sense to get a 2-bed condo for$500K-$700K? Then I could live in one room and rent out the other. I would have to share the space with my tenant, which may be annoying, but the numbers make sense to me.
Any thoughts on Bay Area real estate?
24 yrs old and currently only have $25,000 to put down but I’m great at saving money wanted to move out but I want to buy a house to rent out and buy my personal later on in a couple years. If possible I’m trying to get a house each year even if it’s small. Currently in LLC with some friends flipping houses currently but I want to do my own thing as well on the side. Should I look at a single family to rent out ? Duplex I was thinking as well from your previous video and how much should I put down I’m stuck. And do you have a email for consultations I need some help haha love the videos keep them going
I’d love to help! Go to my website to schedule a mentoring call
Id call a realtor, different markets are doing different things. If you need help getting referred to a good agent let me know (FREE)
First off
25K down finance the rest 🤔
Know that your loan will require you to be a live in owner.
If banks know your an investor, your down payment goes up, your PMI goes up.
Try looking at a 2-4 Plex still falls in a Fanny May loan.
Just make sure you know how to professionally manager them.
His statement is sound, except for the low down to leverage the property. Many have lost everything leveraging, Google Carlton Sheets and the many who was over leveraged.
What do you do, when you buy a 4-plex on fha but all 4 units are occupied?
I have been living in a 2 bedroom rented apt in Ny & the rent is $ 2800 monthly. So now I am planning to buy a 4 bedroom single family home in Newjersey. So how much of a down payment is good for a house costing about $ 450,000. Be a I don’t have much down payment.
20 percent is usually the recommended down payment. So that would be $90,000 but if you don’t have 20 percent there’s private mortgage insurance which usually isn’t too much money.
I downloaded the excel speadsheet used in many of the videos. The spreadsheet is full of errors, inflating the numbers. For example: Property taxes paid is added as a income and not as expense. Please fix.
Ok so let's say I apply for the first time buyer loan which would give me about 3.5% as down payment. Do I HAVE to live at the property? Or can I just say for example if I still live at my parents house and plan on still being there and just said on the application or where ever that I was going to move in the property just to take advantage of the 3.5% but I end up just renting it out of tenant's and continue to live with my parent's will that work? And also for that application for the loan, Do I need the 2 year work history because I don't have that.
The sooner that you can replace your landlord is the better. If that means you can get a duplex that’s awesome but if not don’t wait until you can buy a 600K home you can settle for a small condo
Love your vids. Officially my favorite financial channel.
I appreciate that, thank you!
There are situations in which (house hacking) living in a multifamily first is wrong. For instance, in the Chicagoland area, there are extremely few triplexes and quads on the market. With most of the duplexes, especially in chicago proper, you'll still come out of pocket each month up to $1000 in some cases, even with the other unit rented. However, single family(3+BR, 2+BA) in the suburbs can be had for $500-600 mo @ 3.5% down on 203b or k (including mortgage insurance & property tax) Living in one of those single family will allow you to build up cash for your next real estate purchase faster than living in more than half of the duplexes...and you can always rent out rooms in the single family if you're comfortable with that.
I think its better to force cashflow...i ran the numbers on a 4plex...here minimum is 10% down paiement live in....or 20% and dont live in.
10% = live in : get +38$/month
20% (dont live there) you get 4 tenants = +639$/month in cashflow after all the fees including gestion compagny, taxes, mortage and assurances
So yea...prefer to dont live there..need to add appreciation each year...and reno if tenant move...
Is there anyway I can use a family member to co-sign and get 3.5% down?
Okay Chandler great vid, much appreciated!...so this has been on my mind for the longest while: How do I go about investing in a foreign country? Which bank do I loan from? Are the pros outweighed by the cons? Real estate in the Caribbean looks pretty limited. What is your take on this please?
That’s a great question - I’m yet to invest in another country, but my first priority would be to get my “team” together wherever I was planning to invest - your property manager, loan officer, etc.
Love the hyper focus strategy tip 💰💰💰
👍👍👍
I have quite a bit of cash saved. SInce my area doesn't have multiplexes I plan on getting a small affordable house 1st, then buy a condo that I can hopefully finance for $40k. Not many people do that, but my realtor has 2 of them in the same place I want to get one at and it cash flows like crazy.
Your rental property calculator is amazing and brought me to your channel. May I recommend a save option for future reference or editing.
Chandler how many rooms, bathrooms etc is in a "plex"? Is a "Plex" a unit? I don't even know what the inside to a 4 plex looks like. Would a 4 plex have 4 outside meters? Thank you!
What if you buy a single family like a 3 bedroom or 4 and rent out the extra rooms while you live in it. You're still living in the house but just renting out the rooms. Rent then it for 500 or 600 and that will pay for the mortgage
What about a cheaper condo or townhome as your first investment?
Another great video. The question, would you ever buy a new build for a rental property with barely any monthly cash flow. Just looking at equity building?
I’m not gonna lie trading with Mr Michael Puma have really help me a lot. with his strategy and predictions are so accurate that I made $50k on my previous trades, Reach him for help on the email above my comments, I recommend him for newbies and for anyone seeking for help in trading.
What if you already have a mortgage a primary residence how can you “live in one of these rental properties”
At 12:03 you say you should put as little down as possible on your first property so you have money to put down 20-25% on other properties. Why not just put down 20-25% on your first property. I’m a little confused
Great video, that was my question as a beginner
I’m glad I could help!
What recommendation do you have for going to busy with a partner?
Do you both own the property?
Where does the money go? Joint account? Start an LLC and have that LLC have a bank account?
What r your thoughts on this situation? Moved in and bought my first house house and flipped and left it with 100k. Used that 100k to put 20% down and for renovation costs to move in to and owner occupied duplex for 325k. Now live in it finished the renovations and renting out both sides will give me a total $1250 cash flow. Or could stay in one side and live for almost free. What's the best way to get money for another duplex. Currently my rate is 3.25 on it but I have 65k in for the down payment that I'd like to use without losing a great interest rate 🤔
As a real estate investor, what do you think about HOA? and can I get out of an HOA??
how do i start in a 4 plex right now and which market is best for real estate?
4 unit owner occupied with FHA or conv program allowing 5% down.
Do you have a reading list that your recommend?
I want to do this, get into investment properties and all but I literally have no money. I work a full time job and all my money goes to bills. What do I do????
Hi, Chandler! Do you do the background checking for potential tenants or do you hire a property manager to manage it? Great video! So much juice to squeeze. 👏
A very helpful explanation of returns. Thank you.
im planning on using my VA loan to buy a 3 family. Right now im worried about the people that cant pay rent because of the virus. I also think the market will start to go down soon so im waiting.
Really like this Channel, keep it coming !!!
As a veteran I get 0% down payment with no mortgage insurance. My wife and I are looking for a multi family at the end of the year to house hack. VA loan requires 1 year living at the property before we can do it again! And again!
We are looking into building a portfolio. We would be first time home buyers, is it better to take advantage of the low down payment to get something, fix it up while we live there for the first few month, rent it out, take the equity and get another one?
Kinda confusing. You mentioned to get atleast 15% COC then after you followed up with saying to target 30-40%🧐
Dude, you are awesome. Very informative and good content.
This was a great video Chandler! I echo your statement about not overleveraging for just a few dollars. The market swings can completely wipe out all of your equity and rental market fluctuations could put you in a situation where you aren't able to cover your monthly expenses. House hacking is also an amazing strategy that I tell people to do if they're trying to invest in an expensive market like the Bay Area.
Chandler. I don’t own my home. I purchased a rental duplex in a depressed area that showed signs of early community revitalization for $89900 using a conventional loan with 25% down and no PMI at 3.5% interest rate. Rent was $1830 combined. Minor repairs were done with tenants rent money. Good or bad deal?
I wish I could talk to you about what I’m considering… I think the deal is good but Im just now learning about real estate.
what if i pay 5% down and don't actually live the property?
You’re doing Gods work Chandler
Just bought my first property in hawaii, Idk if I should buy another one here or wait.
what about pmi if you're doing less than 20% down?
i love the shoe dog book in the background! any book reccomendations chandler?
I work as a property manager and I would like to invest some of my savings in purchasing apartments homes, and manage them as well? I'm in Dallas /Fort Worth. Help me know where to start?
how would you look for your first aquisition?? what city??
This may be a dumb question but when you say “get a 30% return on your money when you put down $5k” do you mean every month your making 30% on that 5k?
No, 30% on the year. Anytime someone refers to return it to you early unless they clarify otherwise
Thank you so much for answering my questions.
So let’s say I invest $3,500 as a down payment and I’m leveraging $100k, my annual profit at 15% profit should be $525. This is after all maintenance fees and bills. I’m sorry for my ignorance but that seems not good. Please tell me where I’m thinking incorrectly or wrong.
What about Airbnb. How do u start with that.
Chandler, pretend you were starting your real estate business again explain how to do it example 1st. Call real estate attorney
2nd set up llc etcetera please and thanknyou
I'd like to invest in the USA real estate were no bloggers or consultants helping me even they dont andwer my inquries ...
How do you invest in Real estate as a blind person?
Where is the place to find duplexes, tri, and or fourplexes???
Zillow? Redfin?
Good deals on Multifamily properties are hard to find.. Much more single family deals out there
Hey so my primary residence is paid off and I’m looking at buying a duplex in cash . The problem is I want to leverage but I have low income at the time .Im looking to pay cash and come back to finance them later to get my 3rd property is this a good strategy.
The numbers make sense, I just need to come up with the capital
I got a duplex for 3.5 percent down. After I move out the first year I am expecting just under 6 percent cash on cash return in Washington. That is after saving about $400 a month for vacancies, CAPEX, and repairs though. How much should I be saving? Am I saving too much?
Thank you for sharing ❤️
I watched a video of yours on house hacking using the FHA loan with a down payment of 3.5% what kind of percentage would ye be talking for closing costs aside from your down payment ?
how do you feel about flipping houses to raise capitol for investing in rental properties?
Hey Chandler...you mention having a 6-month reserve in a lot of your videos. Are you suggesting that when you purchase a property that you should also have 6 months of cash as a reserve, or simply not take any cash flow out of the property until the 6-month reserve has been built up?
I have a question can’t you rent out a house for like 5 years and just let the mortgage just pay off a little bit and then sell if and keep the dividend
what loan do you use potooerty investment or fha
Thinking of starting with a small fixer upper. Something for about 35K in cash, putting in another 10k for repairs, and having 5k on the side (that I put a portion of cash flow into regularly) for repairs and emergencies. This way I can test the market without much risk and don't have to worry about debt, worse case scenario I sell the joint and hopefully get a positive return. Any thoughts on if this is a smart or dumb move?
Is there a video on property management? Do you manage them in-house or sub that out?
If I have unlimited capital, not saying I do but if the 25 percent down payments are always possible what is the limit to the amount of total leverage you can have at one time. Does it matter what your income is? Should you depreciate slower to make your on paper income look better when buying your next property?
Hey Chandler love the content. Sounds simple how you say in your video.Is there any book you would recommend on real estate from your experience?
@Chandler Great video and info. Are there any books that you helped you when you first started? any recommendations?
Check out my UA-cam video from last year on my favorite books for new investors! There are some good ones on there 👍
4 units + a store 👍🏾
Question sir , on the 3.5 % down on the 100k prop, when you say push for a higher cash on cash return (30% to40%) do you mean increase rent or how do you push for such a high return on a cheaper property? thanks
If there is land available or a single family home that needs to be torn down, how can one find out if it’s ok to build a multi unit in its place? Or figure out whether it be easy to get permission to do so?
Thanks!
For buying SFH's, what if you rent out extra rooms while you live in it?
How much more will a lender lend on a multi then a single family? If any difference at all
VA...no down payment. :P Great vid.
Whats your take on getting warranty on your property so that they can handle the repairs needed
Trying to invest in my first property . I have an LLC and ready to roll… should I buy the land first since I want to build
Can you Turn Duplex into quadplex and so forth?
I'm trying to use my va loan to purchase a duplex, but man it is a pain in the ass to get approved for anything these days 🙃
What if your an oversea investor?
I inherited a house that is completely paid off that I live in. Can I use this to my advantage to buy an investment property instead of coming up with a down payment?