Key takeaways
- Define a buy box before viewing a single property.
- Get pre-approved for financing before making offers.
- Your first property should be boring and conservative.
- Local property managers are usually worth the 8–10%.
- Build the operating spreadsheet before closing, not after.
Core concepts
The buy box
A one-page document: price range, location, property type, condition, return targets. Refuse to look at anything outside it.
Financing readiness
Pre-approval signals seriousness. Conventional, DSCR, and portfolio loans each have a fit — pick before shopping.
The pro forma
A spreadsheet that converts rent and expenses into cash-on-cash, DSCR, and reserves. Build it once, reuse forever.
First-year operating plan
Lease template, screening criteria, maintenance vendors, and a reserve account opened before close.
Step-by-step framework
- 1Write a one-page buy box and stick to it.
- 2Get conventional or DSCR pre-approval in writing.
- 3Underwrite 20 deals; offer on the best three.
- 4Inspect every property before contract — never skip.
- 5Close with reserves >= 6 months PITI in a separate account.
- 6Onboard a property manager before first tenant placement.
Common mistakes to avoid
- Buying the first thing you see because it's exciting.
- Stretching reserves to make the down payment.
- Skipping inspection to win the offer.
- Picking the wrong financing because it was offered first.
Frequently asked questions
How much do I need to start?
Conventional: 20–25% down + 6 months reserves. On a $200k property: roughly $50–60k all-in.
Should I start with a duplex?
Often yes — house hacking a duplex compounds learning and reduces personal housing cost.
Do I need an LLC for property one?
No. Liability insurance plus an umbrella policy is sufficient until property 2–3.
How do I find a market?
Start with our Investment Atlas and Best Cash Flow Markets ranking, then narrow to 1–2 metros you can visit.
Action checklist
- ☐Written buy box.
- ☐Financing pre-approved.
- ☐Underwriting template tested on 20 deals.
- ☐Property manager interviewed before offer.
- ☐Inspection contingency in every offer.
- ☐Reserves >= 6 months PITI ready at close.
- ☐Lease template and screening criteria documented.