Buying Your First Investment Property

If you are a first-time investor, your attention might be all over the place. Do you buy a multi-family, a commercial space, a condo or can your primary somehow be an investment property?

What town do you focus on? What do you look for? What do you avoid?

It can all feel overwhelming and if you don’t know where to start, you can quickly spend years of your life in analysis paralysis. 

So where would I start for my first investment property? 

The first question you MUST answer is: what can you actually afford? Do not waste days, weeks, maybe even years of your life on real estate investor forums and chatting with investors until you know what you can afford. So find a great loan officer (ping me if you need a recommendation) and start there. 

Now the other piece of this affordability question is: will you be living in the investment property or not? If you’re living in the investment property, you’re going to get a lower interest rate, meaning you can probably afford a bit more. Of course, living in a unit where you also rent to tenants above and below comes with its own set of challenges.

Once you understand your budget and your preferred living scenario, you need to see what is possible from a buying perspective. One of the first things I like to do is run an analysis based on your budget to show you what recently sold in the areas I target. 

For example, let’s say you have a budget of $1M. That may seem like a lot to most people (because it is!), but in the areas I primarily focus on (i.e. Cambridge, Somerville and Medford), you are going to have limited options. Anything in Cambridge or Somerville for less than $1M will almost always be a serious fixer upper. So unless you are planning to get into flips, those towns are most likely out.

That leaves Medford in this scenario. In Medford you could potentially get a solid 2-family if you know where to look, and if you’re willing to put in a few small updates. 

Once you have your budget and town selected, it’s time to start looking. In my experience, you’ll need to look at a few properties before you feel comfortable enough to put in an offer. If you work with me, I share A LOT of information as we go through each property. With my help, you will gain exposure to the market and understand what investment strategies work for you and your personal risk tolerance.

As a note, I LOVE working with first-time investors. Real estate can and will change your life if you make the leap and play the long game. I am very passionate about educating investors on the dos and don’ts to make this process as stress-free as possible.

If you’re thinking about making the real estate investment leap, give me a shout and we can talk!