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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 (2031)
Graham Stephan (6 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
erick dominguez (18 days ago)
Graham Stephan what if your using a VA loan?
giggityeffyou (1 month 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 (1 month ago)
How do you manage so many properties?
LJ Johnson (1 month ago)
Side hustle is this website. https://share.viraldollars.co/lawronce91
Acee Vee (1 month ago)
Graham Stephan aren’t you a realtor ? Why are you using Redfin and Craigslist for comparable sales ??
helior eyal (3 hours ago)
What if i live in a country where they demand freaking 10% taxes on the deal itself? Taxes on the clean profit after renovation Taxes on tenant fees and more.. The taxes here take 40% of the deal at the end of the day.. So should i try investing in a different country instead?
Donte383 (5 hours ago)
well, guess I'll be working at Costco for a while...
Dieufort Apollon (9 hours ago)
Dude you’re awesome and you motivate me ✊🏻✊🏾I’m pushing to own as many as possible.
Graham Stephan (2 hours ago)
Dieufort Apollon (8 hours ago)
I’m dealing with this stubborn lady right now, I gave her $1k extra for this 3 br and 2ba. But shes asking for an extension on offer because she want to get more offers. I’m pissed because this make no darn sense. The property need new trim on almost all of the windows, garage door missing the garage opener, and the back door need to be replaced. Just what I can see just by walking around the house during the showing with my realtor.
Adam Kolasinac (9 hours ago)
the whole video was literally amazing it should have bin called "how to invest in real estate for dummies 101". Graham you are the man and are very knowledgeable, i even learned a few things along the way lol this video deff gets a thumbs up from me!
POPJack1717 (14 hours ago)
That's too long of a reward process. I would rather get instant income via wholesaling or fix-and-flip.
Luigi Nodino (18 hours ago)
Thanks G
Graham Stephan (18 hours ago)
Thanks for watching!
Christopher Sewell (1 day ago)
I'm was born in 1988
Christopher Sewell (1 day ago)
What house could that buy me
Christopher Sewell (1 day ago)
I earn $2000 a week
Christopher Sewell (1 day ago)
I need to save money to get a house
amit sharma (2 days ago)
You are doing a great job , I like your knowledge of business.
Graham Stephan (2 days ago)
Thanks so much!!
Miguel The Roofer (2 days ago)
Goal is a GTR by 22 I’m 17 wish me luck
Graham Stephan (2 days ago)
Good luck!!
Noes Naula (2 days ago)
Graham Stephan (2 days ago)
Thanks for watching!!
Buzzfeedm (3 days ago)
Own a Home in Record Time http://rent2own.mailcmr.com/
Oscar_FML (3 days ago)
Uhhh Graham I know I’m only 17 but im pretty sure that’s 600 cash flow👀
SteelHex (3 days ago)
Most lenders don't use Credit Karma's Vantage scores, they use FICO. Fortunately most credit card providers today give you a free FICO score once a month. I have several credit cards, and between them I got all 3 credit reporting agencies covered. Citi gives me the score based on Equifax, Discover, BoA, Barclays and Synchrony show TransUnion, while FNBO & Ollo pull it from Experian. Getting the score from all three agencies is ideal, but having just one would still get you very close to the number that banks use. Definitely closer than Credit Karma.
David Canonigo (3 days ago)
My Robinhood referral link: https://share.robinhood.com/davidc8822
How many times have I heard stories where buyers look for a property without getting pre approved. Such a waste of everyone's time. That's how I bought my first rental property and primary residence
Charles Denton (3 days ago)
Can you please do a more in depth video of just how Matt Mckever built his $60,000 a month rental income.? I get the concept put the 20 percent down fix up then refinance and use a knew loan to reinvest but I feel like if you went into more detail the concept would be a bit clearer.
Greenlandmusic (4 days ago)
Black on black
Graham Stephan (4 days ago)
Kiana Shalix (4 days ago)
Math is off. Trust has gone down. 3200-2600....
Graham Stephan (4 days ago)
I’m human. Every now and then I miscalculate or mid pronounce something.
Tarik Laaraj (4 days ago)
Cant fit in a lambo so I'll take a 997 GT2 RS, Plus it'll appreciate. The lambo wont.
Graham Stephan (4 days ago)
Todd Smith (4 days ago)
I have to agree Graham! That is a beautiful color on a Lambo!! But I also would probably wrap it with a really cool color or design for a while as well.
Graham Stephan (4 days ago)
Thanks so much!!
Jeremy Grullon (5 days ago)
Brent Watson (5 days ago)
Is it a bad idea to use a home equity line of credit for the down payment of a property? I’ve built up a bunch of equity but don’t have much in terms of fluid cash.
dustin klarcyk (6 days ago)
I wouldn't buy a Lamborghini, I would buy another rental property.
Graham Stephan (6 days ago)
Jay Ray (6 days ago)
I’m more of a truck guy, but if I do buy a Lambo, it will be black.
Graham Stephan (6 days ago)
Redsoul _ (6 days ago)
I like how to make it simple
Justin Clark (6 days ago)
Finally a real estate investment video that’s actually telling people honest advice.
Loky Saint (6 days ago)
Step 1: have money
Daris Price (7 days ago)
My Lamborghini would be purple and black
asafox (7 days ago)
Great video! Thanks Graham! Mind night black is the color... 🙂
Graham Stephan (7 days ago)
White with black tints
Joey D (7 days ago)
Verde IF A CUH
Rebuilding (8 days ago)
“Good luck getting a loan that” lmao 😂
frogantoad (8 days ago)
I hope u get even more successful so you can have less youtube adverts interrupting your great videos 🤣 im tapping the like button like my girlfriend
Reine Ramai (8 days ago)
Man! This are some killer advice❤️ It’s becoming my top fav🤩 YouTube channel now.. Thank you Graham💫
Graham Stephan (8 days ago)
Thanks so much!!
Aman shivhare (9 days ago)
But if we take loan for 30 year long term, you end up giving too much interest also.
Pedro Torres (9 days ago)
I’m motivated to get a rental property preferably a Duplex 🙏.
Graham Stephan (9 days ago)
Ivo Galabov (9 days ago)
Very useful as always, Graham! Thanks!
Graham Stephan (9 days ago)
Ana Nettles (9 days ago)
White!!!! Lambo!!!
Graham Stephan (9 days ago)
Prince Rahming (9 days ago)
Ur a bad instructor....Itd really not that difficult... Ur making it sound like a pain in thr ass...I have 25 properties and going. Guyd likr you try to confuse ppl so that they are discouraged to even try...you sound like a broken mexican record
Solrac Utnac (9 days ago)
What if one uses a VA Loan 0% Down, and plan on House Hacking? How different are the steps?
Samin Choudhury (5 days ago)
Solrac Utnac it is very smart to do that. You can get amazing rates too
@Graham Stephan love your work Graham, lol. I will try my best to buy my first rental property 100% cash. I'm vehemently opposed to borrowing money
Graham Stephan (9 days ago)
Uh oh
Hey graham. How do you see people information when you rent your property to them. For example how do you used their social security to looking for information such as payment on time, crime record maybe, or reputation!!!!
sasquatch1 **** (9 days ago)
Preferably. Not perferably.
AllanG (10 days ago)
Is buying a positive cash flow property in Sydney Australia even possible lol?
Enrico Xxx (10 days ago)
3200-2600=600cash flow not 800
Lupus Spiritus (10 days ago)
1967 cherry red ford mustang white wall tires
Damos Doom (10 days ago)
Not a lambo guy. Couple more Harleys sound good though. 😁
Graham Stephan (10 days ago)
Threelly AI (11 days ago)
Watch a 30 mins video in 3 mins. The BEST extension in google chrome store. https://chrome.google.com/webstore/detail/threelly-ai-for-youtube/dfohlnjmjiipcppekkbhbabjbnikkibo Plus,the state of the art Artificial Intelligence algorithms automatically analyzes videos to locate and pull the precise location of key points of interest like - topics, scenes, people, sentiments, brands, expressions, labels and much more. Allowing you to rapidly gain intelligent insights from any video.
Brent Chaney (12 days ago)
What app(s) do you use to keep all your tenants in check, or do you just use an excel spreadsheet to do this? I’m asking about things such as utilities for each property, if they paid and when they paid, and apps/websites to check credit scores and perform background checks on people who are applying for properties. I remember you mentioning an app or website that you used to do background checks and also one that tracked utilities in one of your videos, but I couldn’t remember which video it was. Thanks for all your help!
Logan Hillenburg (12 days ago)
Hey Graham, great video. If I plan to live in one half of a duplex and rent the other, should I calculate the cash on cash return as if I'm renting both sides?
webuser 2014 (13 days ago)
When you calculate your monthly expenses (Step 5 Cashflow) , i would suggest to use % at tax, insurance, Expenses and Vacancy, since they are dependend of the value of the property or you could make it dependend on the mortgage. example: Vacancy is 10% of the mortgage.
Graham Stephan (13 days ago)
Expenses aren’t necessarily the cost of the property. Here in LA much of the value is just land. A kitchen for a $150k home is the same to repair as a $2m home.
Jaime Morrison (14 days ago)
why would I hit the like button before I watched the video? Now I am not even going to watch it.
Graham Stephan (13 days ago)
Adam 1099 (14 days ago)
Can someone explain me how the principal equity works
Samus (14 days ago)
What about building rental properties?
Samus (14 days ago)
@Graham Stephan what about like, batchelor apartment fourplexes? Seem to be in pretty high demand here.
Graham Stephan (14 days ago)
It’s a lot of money!
Free-dome (15 days ago)
Uh favorite Lamborghini color?!?? Is that even a question!! Freaken rAinBow
Graham Stephan (15 days ago)
Andre Pavlik (15 days ago)
By far the most important channel on YouTube. I have learned more from you about personal finance, savings and investment in just under 10 videos than I have from my parents, friends and school. You are awesome!
Graham Stephan (15 days ago)
RodanChi (15 days ago)
Just what I was looking for, now I can start getting all my ducks in a row,.
Graham Stephan (15 days ago)
Connor Yost (16 days ago)
Arancio Argos ;) love the videos, very informative and excited to follow in your footsteps.
Graham Stephan (16 days ago)
thanks!! good choice!
Nicolas Ganea (16 days ago)
I found you because of a video by jubilee millionaires vs minimum wage did you earn your money. If you were ever wondering since Ive been watching ton of your videos not to mention my recommended videos are all you some how? Thanks for these great tips this has saved me sooooo much time learning all this
Graham Stephan (16 days ago)
Thanks so much!! Yeah YouTube algorithm has been pushing my videos a lot lately!
Dee Jerett (16 days ago)
pearl white!
Graham Stephan (16 days ago)
Ferran Barneda (16 days ago)
13:00 -- Total Cost: $2600 -- Rented for: $3200 Where do you see the $800 Cashflow? I can see $600.
CrapImGud (1 day ago)
I think he deducted vacancy, but that doesn't make much sense, given that he was accounting for it over time, even when he has tenants. Probably a math error.
Christopher N (16 days ago)
You clean out the couch once a month. Renters usually lose like $200 in change in the couch per month.
Vlog by Abruptly Dope (17 days ago)
Graham Stephan (17 days ago)
Yeeter Yayeet (17 days ago)
12:41 But 3200-2600=600
Gavin Olivas (17 days ago)
How to smash the like button (step by step) Actual question though. As someone who is both trying to save money for their first real estate investment, and also interested in investing in things like IRAs and Index funds, which would you prioritize? For example if you had 800$ a month to invest, what percent would you put into saving for a real estate investment, what percent into the IRA, etc. (assuming things like student loans and other debt is paid off). The more you save for a house, the more you miss out on compound interest, but the more you focus on retirement type investments the longer it will take you to have enough to start making cash flow type investments. potential video idea?
Itz Kostya (17 days ago)
Graham is so short😂 hes like 5'1
Threelly AI (17 days ago)
Couldn't choose a sub so this'll work https://chrome.google.com/webstore/detail/threelly-ai-for-youtube/dfohlnjmjiipcppekkbhbabjbnikkibo
Sir Thomas (17 days ago)
Excellent! Until now are unable to realize I just made $1321 with this fantastic web site here Click-Me-Now.club?162
Elton Williams (17 days ago)
I want to get into real estate investing really bad , but I also want to go to school. I have no true passion. What degree would help me get into real estate investing that isn’t boring like accounting
Ashton (17 days ago)
Question: Would you recommend to start a different career path if the one you’re in is hourly? I’ve looked into becoming a real estate agent, but I don’t want to lose my job history where I’m at. Is it better to start over and get 2 years of work experience in a sales oriented field, or stick it out and save as much as you can at a regular hourly job?
Luis Guerra (18 days ago)
Dark grey Lamborghini for me 😉
Graham Stephan (18 days ago)
XIX Express (18 days ago)
My Lamborghini is going to be black once the cash flow is on!
Graham Stephan (18 days ago)
Graham Stephan: smash that like button Me: of course! (But like Pewdiepie)
Graham Stephan (19 days ago)
Alan Park (19 days ago)
You should do "a day in the life of a Real Estate Agent". Time to update that 10k follower's video and buy that cheese cake?
Graham Stephan (19 days ago)
TheAgents123 (19 days ago)
Hey, I'm a 17 year old in Atlanta, and I'm considering buy a duplex to rent out after I graduate highschool, what's the best way to go about doing this
melody Bringas (19 days ago)
cash flow in new zealand good luck,after 14 year my investment property now in the black
Alex Mondragon (19 days ago)
can you make a video discussing how you prioritize cosmetic renovations in terms of their ROI thank you, yaaaassss :)
Chris Smith (19 days ago)
CreditKarma sucks, they're not a lender and you don't pay them so they don't have a legal obligation to be accurate. I sell cars and have seen them be off by 100 points. They told my best friend last year he was a 680, lender pulled him he was 724. I've also seen people show me a 680 score on their phone using the app and pull them and they're actually a 600. Absolute garbage Creditkarma is because they exist solely to get advertising dollars.
Steven Moormann (19 days ago)
Credit karma is a bad tool to use it can be WAYYYY off from your actual score that the lender sees.
Graham Stephan (19 days ago)
It could be. But generally for me it’s always been within about 10 points.
hairbyshaundatv (20 days ago)
My Lamborghini will be dark plum purple
Graham Stephan (20 days ago)
Dr. Zonked24 (20 days ago)
Red Tesla 2020 roadster!!!
Graham Stephan (20 days ago)
ThreatsAsylum (20 days ago)
I’m 16... I was lost on step 0
Oscar_FML (3 days ago)
I’m 17 I understand everything but I’m 17 😡ooof
AP Trading (20 days ago)
12:54 it’s $600 cash flow but great video tho
Graham Stephan (20 days ago)
Thanks! Correct typo
tsdexter (20 days ago)
+1 for the Canada love ... kijiji ftw 😎
Graham Stephan (20 days ago)
Hector Gomez (20 days ago)
Wow straigeht to the chase, Iam impress!!
Graham Stephan (20 days ago)
Jan Przepiórkowski (20 days ago)
My labo color will be... a toyota. I enjoy living frugaly/simply.
Graham Stephan (20 days ago)
akshay kumar (21 days ago)
Just imagine, I mean just really really really imagine that this guy actually drops a single. Metro booming ft Graham. It would be lyrical education. Thanks a bunch man, I heavily into stocks but your explanations are so clear.
Graham Stephan (21 days ago)
Hahaha yesss
platypus2899 (21 days ago)
I'm in the process of watching all your videos, hoping I can someday become financially independent. Even though I'm paid well as a doctor, I bust my butt at work and I am tired of it. I can't imagine doing this day in and day out for 30 years, dependent on a paycheck from my employer. Thank you for all the useful information. You are an inspiration. You are my hero!
Lucas Katulski (22 days ago)
light blue
Marcel Rodriguez (22 days ago)
Is there any way i can use my parents house to buy another house? Without having to pay more interrst on their current mortgage? Just use their equity for another?
A W 2 (23 days ago)
Smashed the like button before 20 seconds into the video because I trust your judgement by now, after watching about a dozen of your great videos. I have enough for buying my first multi-unit rental, credit score over 800, but I think I'm not ready yet to do that... maybe before 2019 is over.
Graham Stephan (23 days ago)
The Amateur Pro (23 days ago)
Am I the only one that realizes $3,200 - $2,600 is only $600 a mo. cash flow vs $800? Or am I not understanding something?
Hello Hello (23 days ago)
Seems like a scam
Graham Stephan (23 days ago)
ben mackay (23 days ago)
At what point is lmi worth paying for. Even doing full savings and selling my car I wouldn't have 20% on 260k for 3 years if I sold my car I'd have 5% instant and savings could go into all the other expense.
Matthew Skornicka (23 days ago)
In your experience, do college towns provide properties with more or less cash flow?
Graham Stephan (23 days ago)
They can but they’re a lot of work!
Cindy Nguyen (23 days ago)
OMG... nobody ever explain and break it out as good as you . you are saving me so much money ❤❤❤❤
Graham Stephan (23 days ago)

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