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How To Buy Your First Rental Property (Step by Step)

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How to invest in real estate: Here’s exactly how you can buy your first rental property, step by step, and the process involved. Enjoy! Add me on Snapchat/Instagram: GPStephan Join the private Real Estate Facebook Group: https://www.facebook.com/groups/therealestatemillionairemastermind/ Get $50 off for a LIMITED TIME with code ThankYou50 - The Real Estate Agent Academy: Learn how to start and grow your career as a Real Estate Agent to a Six-Figure Income, how to best build your network of clients, expand into luxury markets, and the exact steps I’ve used to grow my business from $0 to over $125 million in sales: https://goo.gl/UFpi4c Step 0: Because this is where it starts, you’re going to need a downpayment. How to save for a house: https://www.youtube.com/watch?v=qyQOoCmamIk&t=2s Step 1: Unless you’re buying a property outright in cash, which I have a feeling is very few of you watching…get your credit in order. How to build your credit: https://www.youtube.com/watch?v=ukaWAjgkH9M&t=4s Step 2: Make sure you have your tax returns prepared. If you’re self employed like me, a lender will ask for your last 2 years of tax returns and take the average income of those two years. Be ready for this! Step 3: TALK TO A LENDER FIRST BEFORE YOU DO ANYTHING. First, you’ll know EXACTLY what you can qualify for so you won’t waste your time. Secondly, if you find the right place, the lender already has all of your information so you can hit the ground running. And anytime you find a spot that’s worth buying, chances are, you’re competing with other people who want the exact same thing. So timeliness really, really matters here…the faster you are, the better the deal you can get. Step 4: BEGIN LOOKING AT PROPERTIES. This is really meant to be the fun part…look at EVERYTHING you possibly can within your price range. How to find a good deal: https://www.youtube.com/watch?v=9nHDT5XL4KY&t=36s Step 5: Determine cash flow. The reality is that 95% of properties just don’t make sense to purchase for an investment…they lose money. It’s also the reality that at a certain price, EVERYTHING makes a great investment - it’s really important to understand these numbers. Three ways to make money owning real estate: https://www.youtube.com/watch?v=h8wNUaBgZTk&t=19s Mortgage Calculator: www.MortgageCalculator.org Step 6: Look at properties that need minor cosmetic renovations! Most profitable renovations: https://www.youtube.com/watch?v=kW76liexoBY&t=2s Biggest Mistakes: https://www.youtube.com/watch?v=Tof5GMD0akc&t=46s Step 7: MAKE OFFERS ON PROPERTIES! Expect that not every offer will work out…for me, I lose out on many offers because I offer a price where the numbers make sense, and if it’s any higher than that, I won’t buy it. Step 8: Do your inspections! Make sure to do as many inspections as you possible can. Check the roof, the foundation, electrical, plumbing, if there are any leaks, bring in contractors for bids if it needs work…the more you do, the better. Step 9: Understand escrow costs: https://www.youtube.com/watch?v=cN7n3wC9eAQ&t=64s Step 10: RENOVATE IT! Video on renovations: https://www.youtube.com/watch?v=iBOeQv7zzgI&t=175s Step 11: RENT IT OUT! If you want to rent your place for top dollar, use REALLY good pictures, pick up your phone on the second ring, and be available anytime to show it. I promise if you do this, you’ll have no problem renting it out quickly. I personally like using Apartments.com, Craigslist, Zillow, Redfin, Trulia, and Reatltor.com…the more places you property is, the better. Never just limit yourself to one of these, DO THEM ALL. Tenant screening 101: https://www.youtube.com/watch?v=hS8lIrzEwv0&t=154s STEP 12: SCALE UP! Suggested reading: The Millionaire Real Estate Agent: http://goo.gl/TPTSVC Your money or your life: https://goo.gl/fmlaJR The Millionaire Real Estate Investor: https://goo.gl/sV9xtl How to Win Friends and Influence People: https://goo.gl/1f3Meq Think and grow rich: https://goo.gl/SSKlyu Awaken the giant within: https://goo.gl/niIAEI The Book on Rental Property Investing: https://goo.gl/qtJqFq Favorite Credit Cards: Chase Sapphire Reserve - https://goo.gl/sT68EC American Express Platinum - https://goo.gl/C9n4e3
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Text Comments (2230)
Graham Stephan (7 months ago)
Here’s a list of the other videos that explain the process a little further that pertain to this video - enjoy!: How to save for a house: https://www.youtube.com/watch?v=qyQOoCmamIk&t=2s How to build your credit: https://www.youtube.com/watch?v=ukaWAjgkH9M&t=4s How to find a good deal: https://www.youtube.com/watch?v=9nHDT5XL4KY&t=36s Three ways to make money owning real estate and cash flow: https://www.youtube.com/watch?v=h8wNUaBgZTk&t=19s Mortgage Calculator: www.MortgageCalculator.org Most profitable renovations: https://www.youtube.com/watch?v=kW76liexoBY&t=2s Biggest Renovation Mistakes: https://www.youtube.com/watch?v=Tof5GMD0akc&t=46s Hidden escrow costs: https://www.youtube.com/watch?v=cN7n3wC9eAQ&t=64s How to screen a tenant: https://www.youtube.com/watch?v=hS8lIrzEwv0&t=154s The Best Real Estate Tax Write Offs: https://www.youtube.com/watch?v=sLaw91Baay0&t=6s Why I don’t flip real estate: https://www.youtube.com/watch?v=Uh15keMBjf8&t=6s The 5 Golden real estate investing tips: https://www.youtube.com/watch?v=57tt-L-Xbj8&t=5s
Michael Zagvoznenko (6 days ago)
Thank You!
Leslie Sanchez (26 days ago)
Thank you for making this video. Having a plan is everything.
erick dominguez (1 month ago)
Graham Stephan what if your using a VA loan?
giggityeffyou (2 months ago)
How do you manage properties? Do you go with a property management company? If you do decide to go with a property management company once you get multiple rentals, after how many rentals would you suggest a property management company?
giggityeffyou (2 months ago)
How do you manage so many properties?
Jose Rodriguez (1 hour ago)
I want to buy a rental property. But I live and work in China. I work for a Chinese company. I am saving for a down payment and have a good credit score. What should I do about the tax returns?
The Unborne (1 hour ago)
Leave China. Unless you're on a permanent residence there, you won't be getting any loans for a property there. Otherwise, purchasing a rental property in America will force ya to hire a property manager which will eat into your cash flow. Hell, you might end up paying double tax if China knows you're making money in the US.
Bob Robinson (6 hours ago)
I like u bro. Funny af
Seethi C (20 hours ago)
The hardest part of the entire journey is the initial down payment.
Mike B (11 hours ago)
@Seethi C I don't know why he keeps insisting on 15-20% in his videos. I've owned 3 homes and have never put down more than 10% and in fact, you can get an FHA loan with just 3.5% down if your credit is decent. Yes there are drawbacks but it can be done.
The Inventest (21 hours ago)
Your the only channel that when you say “remember to smash that like button” I feel obligated by god to smash that like button with all 7 of my accounts 😮
Yunior Rosario (22 hours ago)
What about if I get my real estate licenses. It will be more easy to buy properties?
DaedricDream (1 day ago)
I love you
Danice T K (2 days ago)
Thank you for this video!! You answered so many of my questions!! My lambo will be orange, btw😃
David Saucier (2 days ago)
You say you want your lambo color to be verde ithaca, but I think what you really meant was AVOCADO GREEN...due to all the green your saving by making your own avocado toast
wavyboyo (2 days ago)
lol out of all the supercars why does everyone love lambos
Fit Britt (2 days ago)
does anyone have a credit score over 760??
Roderick McCall (2 days ago)
Fit Britt lmao not too many
oogleeh (3 days ago)
"Tenant will gonna find a way to break it" :)
The Village Kid (3 days ago)
Jeremy Lang (3 days ago)
But do I have to buy a gaudy green Volkswagen?
Bkz81 (3 days ago)
Super informative for someone who knows nothing about this area, like myself.
Pattie Nantume (3 days ago)
Not a lambo but a silver Aston is my dream
LivingLegend404 (3 days ago)
Grigio Lynx Lambo
J Ramirez (3 days ago)
God bless Graham Stephen. Probably the only person on YouTube that actually gives you valuable advice on how to invest in your money so you can become wealthy unlike other "gurus" that just wants you to buy their bs courses and doesn't really give you good advices.
Graham Stephan (3 days ago)
Thanks so much! 🙌🏼
Acey Booker (4 days ago)
Really appreciate the information. Thank you.
SoCalFreelance (4 days ago)
And then the section 8's come knocking
Danos138 (4 days ago)
Okay... but where do I save the down payment? I know it's silly to keep the money in a chequing account... so a savings account with at least 2% interest? What if there isn't a decent interest rate at my bank?
Luke Bedros (2 days ago)
Something wonderful called the stock market.. Especially if you are nowhere near having the amount you need. 2% interest rate accounts is for short term savings usually 3-6 months worth of expenses depending on you situation.
Ravenex2 (4 days ago)
Amazing quality video and content!
Mandy Le (4 days ago)
It be awesome if you can explain , what you think a great deal is considered. Living in SoCal , it’s hard to make cash flow since the hosing market here is crazy
Sanny Santos (5 days ago)
Fantastic! exactly what i needed to know . Thank you
Graham Stephan (5 days ago)
Jonathan henriques (5 days ago)
I’m a big fan! But isn’t that 600$ cash flow on your example on step five?
tlozzi (6 days ago)
Tell us what banks are giving mortgages on rentals , especially condos !! Nobody wants to loan any money except Tony Soprano...
Kyle McCabe (8 days ago)
Graham you're the best. I'm definitely referencing this video in the future.
General Buttnaked (8 days ago)
Best deals are off the market
Tellie Avila (8 days ago)
Hey there. Long time listener, first time caller. I agree with almost everything in this video, EXCEPT you do need to allow your loan officer to run your credit from the get-go. Otherwise, you are both shooting blind. If you have poor credit, trust me, one mortgage inquiry is not going to make or break you. (The same is also true if you have great credit; one inquiry might affect your score between 5-10 points, but its the price of admission to get expert advice from a loan officer.) Now, obviously don't let every "Joe Schmoe Mr. Mortgage" take a run at it. Choose one loan officer with whom you want to do business and allow them to help you work on your credit. There are so many misconceptions about credit, and- sorry Graham- Credit Karma is a joke. If you have judgments or other public records they probably will not show up on Credit Karma. Let your loan officer help you! We can only help you if we can see the full picture, which includes a tri-bureau credit report. - Signed, A Credit-Pulling-Loan-Officer :)
Underwear Baker (8 days ago)
Man all these courses I watch are complete bullshit they tell you basically the things you already know. Terrible really both edx and lynda. If someone has some other platform for studyng please tell me.
Hype beast (8 days ago)
Black Lamborghini
Graham Stephan (8 days ago)
Hype beast (8 days ago)
I’m 16yrs old I hope to make this a successful career
Graham Stephan (8 days ago)
Sunflowernugget (9 days ago)
My Range Rover will be in the color Baltoro Ice metallic
Travis Talks (9 days ago)
I think this is the MOST helpful video youve shared. Nothing against your other ones! But I love it! Thank you, Hopefully Ill be able to buy my first rental property within 3-4 years from now. Being in school sucks, great credit score, but very low tax payment history.
Graham Stephan (9 days ago)
Gloria Nuńez (9 days ago)
Graham Stephan (9 days ago)
Duke Togo (10 days ago)
"Tile you pretty much can't mess up" Tenant: "Hold my beer" ***Drops glass beer bottle right on your tile floor*** Hope you saved some extra matching tiles.
Brandon Hines (8 days ago)
Flooring is usally a different kind of tile. Think vct like in stores
Mohammad Amoozegar (10 days ago)
This is one of the greatest videos I’ve ever watched on YouTube thank you so much. I do have one question though. What do you think of property managers and would it be wise to hire one to manage your properties?
wolfpackflt670 (10 days ago)
Just hire a property manager, your life will be SOOOOOOO much easier.
Nolan Tonucci (10 days ago)
Love how your stuff has no gimmicks. Keep up the good content!
Charlie Bruegeman (11 days ago)
Deidra Scott (11 days ago)
Hey Graham, what do you think about the fortune builders?
kefkapalazzo1 (11 days ago)
I don’t even know what my credit score is. It’s probably as low as can be. Checking it gives me anxiety
David Sfarcioc (10 days ago)
kefkapalazzo1 what was it
kefkapalazzo1 (11 days ago)
That nyc real estate 😭😭
MaxLtv (12 days ago)
How many houses is to many
MaxLtv (12 days ago)
I’m trying to figure out my goal
Aaron L (12 days ago)
"Tile is one of those things you can't mess up." Hold my beer.
Graham Stephan (11 days ago)
robertk2007 (12 days ago)
Do your stewie... please??
Cody Smith (12 days ago)
its was 600$ cash flow lol so all your math is wrong
abobjenkins (13 days ago)
Graham Stephan What metric do you use to determine your "price range"?
paul isaac (13 days ago)
screw the lambo, more money isn't always better, I want the beast from green hell, in green. nice video.
Mickael S-g (13 days ago)
Hey Graham, I've made some calculations with the mortgage rates in my country and I've noticed that with your numbers as an example I'd be paying the loan and getting equity of 8000 (rather than 4700) which in turns translate to being able to rent the house for exactly the same price as your mortgage+expenses of 2600 and still get a 10% return. Is that a good calculation? ie, you're getting a 10% return but thinking about it it's of your own payments to the bank so the cashflow would be really 0% wouldn't it? Which % cashflow you think it's a good one to consider it a good investment (forgetting about the principal appreciation)?
Kevin Strong (13 days ago)
credit karma is NOT a real score. This is HORRIBLE advice
Erik E (13 days ago)
1:55 what if you only use a debit card? Edit: oh wait credit score isn’t just about credit cards
Letta Elease (13 days ago)
Can you do a conference pleasee
Graham Stephan (13 days ago)
Maybe one day!
Samurai OG Butch (14 days ago)
Black and Red Lamborghini - big Darth Vader fan. Great Video Graham! thanks
Graham Stephan (14 days ago)
Jacob Delano (14 days ago)
Pls stop asking people to like and subscribe! We know how youtube works, we will like and sub if we so choose.
Graham Stephan (14 days ago)
Asking helps though :)
joshuag94 (14 days ago)
Where am I gonna get $80k cash for a down payment????
PRINCE DUBAI (10 days ago)
NO, there is a way used in creating those things with the use of application software.
DSNCB919 (10 days ago)
Rob the bank
Karsten Norgard (14 days ago)
joshuag94 save?
6IX (14 days ago)
Mines gonna be purple
6IX (14 days ago)
Graham Stephan I didn’t know you reply to comments 💪🏽made my day man 🙏🏽🙏🏽
Graham Stephan (14 days ago)
Brawl Stars Fights! (14 days ago)
I have 100,000$ on savings. I have 750 on credit score. But I don’t have income. 20,0000$ per year. 🤕
Brawl Stars Fights! (12 days ago)
Superior Gamer I don’t own any house. Im 19. I live with my parents at an apartment. Im first immigration generation from Spain.
Superior Gamer (12 days ago)
If you already live in a home that you own you can pull an equity loan
SpiteBellow (12 days ago)
I'm in the same boat. How do we get a mortgage on that?!
Felix Ulloa (15 days ago)
Matte Black Lambo
Graham Stephan (14 days ago)
Shara Smith (16 days ago)
I rarely comment on videos but I must compliment you on this video. Well laid out, clear, and literally extremely informative. Thank you. Great job!
Graham Stephan (16 days ago)
Thanks so much!!
Valerie Ewing (17 days ago)
🤔 A rose gold Lamborghini Aventador... 🤤 But seriously, would I even buy one since my goal is to retire with millions of dollars?
CJ Lang (17 days ago)
The math on the cash flow is wrong. $600 cash flow not $800.
Point one, Point two (17 days ago)
My lambo will be navy coloured.
Paul Rod (18 days ago)
I love these videos, you're truly changing peoples lives! You changed mine. I appreciate all the value you put out for FREE. I was going to go to college just to please those around me. By learning more about the market and stocks, I believe I can do just fine without it. Thanks -Paul :)
Graham Stephan (18 days ago)
Ah thanks so much!!
DJ Miguel (18 days ago)
@Graham Stephan Just came across your video & I'm new to this. I have a question in general 4ya. Where could a first time self starter begin. What would U recommend & share (in your opinion) what to prepare for. Thanks in advance👍
Avery Milton (19 days ago)
Have you ever bought land and built, would you recomend doing it?
Mateo Francisco andres (19 days ago)
I would get a black Matt
Graham Stephan (19 days ago)
Marcello Wheeler (19 days ago)
Well I got tripped up on step 1 lol. I have some work to do.
Michael Hutton (19 days ago)
This is a great strategy to add to your portfolio. If anyone needs a reliable, solid lending source, then I want to share www.fundwisecredit.com. I use them, because they make funding, for real estate flipping very, very easy.
deadeyediaz09 (20 days ago)
Red ferrari
CAHMicroFarms (20 days ago)
Wait so 95% of properties dont cashflow.... then why have any rental properties thats a pretty fucking high failure rate for how expensive property is.
Monkey (21 days ago)
Long but good info, zone out a few time, then had to replay the parts missed, really like the 12 steps, thanks, good job!
Wesley P (21 days ago)
would it be worth starting a small company and incorporating everything related to your business? tax advantages are a plus. also the business has its own credit score. you can also make ti an LLC so if something bad happens your not personally on the hook.
Brett Sharp (21 days ago)
Hey Graham Thanks for the videos, very helpful! What’s your take on buying investment properties in an area that you are not sure if you will stay long term? If you do leave do you recommend selling or keeping them as rentals and using a property manager?
Brett Sharp (21 days ago)
Hey Graham Thanks for the videos, very helpful! What’s your take on buying investment properties in an area that you are not sure if you will stay long term? If you do leave do you recommend selling or keeping them as rentals and using a property manager?
альфа ጃም (21 days ago)
u a God sent giving this info for free Godbless you humble man
Graham Stephan (21 days ago)
Thanks for watching!!
Joel Beaulieu (22 days ago)
Dark purple I don’t have any fancy colour name and yes it’s colour not color here in the great white north
Tim Reicher (22 days ago)
If your using a bad Realtor can you just stop and get someone new to work with?
Forbiddenxgamer (22 days ago)
See I'm on top of it.. smashing the like bottom every video before he says anything..
Graham Stephan (22 days ago)
Quinten Dewit (22 days ago)
Graham says 3200-2600=800 and not 600 graham what are you doing man pay attention Love what you do and keep the good work going
Quinten Dewit (22 days ago)
@Graham Stephan its finne dide i may only be 14 and broke but i love what you do keep up the good work
Graham Stephan (22 days ago)
Oops 😂
LifeOn2Wheels (23 days ago)
Hi Graham, Fantastic video as always and this is probably one of the most helpful videos I have found on the internet. I want to hear your opinion on Mashvisor.com. My biggest problem is trying to identifying a cash flowing positive rental property. And it has been taking up a lot of my time. Do you think it's a good idea to utilizing third party site like this to help pinpoint areas where it's worth investing since it spits out COC and Cap Rates and other datas pulling from sources.
LifeOn2Wheels (23 days ago)
Sorry, I forgot to mention that my wife is actually a realtor and has access to MLS. So do you think the best way is still to utilizing that?
Tail End Customs (23 days ago)
Dude thank you! I work a job with no retirement or 401k. Been stressing. Fixing to sell my house because it has a bit of equity and I want to start investing in real estate and rental properties to plan some kind of retirement.
ecgodsmack86 (23 days ago)
Hey Graham how often do intrest rates for mortgage go up and down as to refinance?
Cirilo Villar (23 days ago)
matte black
G0OS3 (23 days ago)
I smashed the like button so hard my finger hurts.
Graham Stephan (23 days ago)
Patrick Melson (23 days ago)
Lenders say Credit Karma scores are not accurate. I'm assuming that means they are high or what's the story?
Graham Stephan (23 days ago)
They could be high or low. It’s meant to be a guided.
Brian McNamara (23 days ago)
If you have the money is it better to buy the property all cash or on a loan? Ty
uamir khan (23 days ago)
If you want to know about "buying an investment property" then just follow the link, you got everything you want to know about, https://m-arriaga.net/buying-an-investment-property/
Shawn Butts (24 days ago)
Any videos on zero down payments and what to watch for?
Graham Stephan (24 days ago)
Chanbi Kim (24 days ago)
I live in Honolulu. As you know, Hawaii is expensive so my plan is saving money, buying a rental property and living in the smallest unit to save more. I researched and found that many people said you should form a LLC or S Corp. But it seems like if you try to buying a property under a new LLC or S Corp with a mortgage is almost impossible and expensive. Would you please give me your two cents?
Total cost 2600 Rented for 3200 Is 600$ cash flow not 800$
What sites should you go to check out homes on the market ? I appreciate u brotha!
JMGRICH (25 days ago)
So what's the point in investing if there's no cash flow?
Graham Stephan (25 days ago)
Jay S (25 days ago)
Hey Graham In 2016 Had a lender tell me he didnt accept Credit Karma etc bc they tended to inflate scores. He would have to pull my credit if I wanted to do biz with him.
Mike Perry (20 days ago)
Hey Mr. Stephan! I just want to thank you for inspiring me to get into real-estate. I'm currently 17 going into my senior year and have started saving for my first rental property. I wish more people saw your videos so they could learn not just how to do real-estate investments but general money management skills. You have a lot of wisdom that could benefit most people.
Gone (25 days ago)
If I bought a Lambo it would be a Lamborghini Centenario in a dark purple or metallic purple
Graham Stephan (25 days ago)
Erik Thomas (26 days ago)
3200-2600 = Smash the Like Button.
Dillon Hawkins (23 days ago)
So it equals 0, lol
jay man (26 days ago)
I probably wouldn't buy a lambo... how much is a private jet 🤔
Graham Stephan (26 days ago)
Raf (26 days ago)
Ever have tenants use the middle part of a sink as a cutting board? You would think that stupid things like that don't happen... but they do... Ug.
Tom Merino (26 days ago)
This guy cant do maths

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