How do I start building rental property portfolio so I can FIRE?

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I do not agree with the LLC and S Corp decision. I know it is a popular thinking but in reality for rental properties it can be a detriment. Especially depending on the state you are residing. For e.g., in CA, LLCs/S Corps are automatically rent controlled. Individual owners are exempt from that depending on the city you own the property in. So, the decision of setting an LLC varies depending on where you live. But that won't be where I would start. (No disrespect to anyone that is suggesting LLC... just my thoughts and I have a lot of experience in this area)

First and foremost, I would recommend finding out how much you can afford. Contact a lender and know how much you can put as down payment and how much you can get mortgage.

Then, find a good realtor. It is really important to find the right person. There are a lot of them out there. A lot of them will take you through motions. Look at their history of sales and make sure they know the area. A good realtor should be able to work with you on any legal considerations and set you up on an automatic search where you can see the upcoming sales in the areas you desire. They should even be able to help you calculate a return on investment (rental investment + appreciation of net worth). And if the property management part is daunting for you, you can hire a property manager but that cuts into your profits. Good realtors will have referrals for contractors, plumbers, etc. and I definitely recommend having a home warranty.

likehelpful

Yep agree

How you start:
- save up money for a down payment
- research a ton to find a market that fits your requirements
- retain an investor-minded realtor
- put in bids on properties that fit your criteria
- get a bid accepted and close on the property
- prep the property to be rented out. This may include retaining a property manager
- advertise the property, get a tenant, and sign a lease
- collect rent
- rinse and repeat

That being said, I’d say the hardest part is determining which market to enter. I always suggest landlord friendly states. Beyond that, it’s a factor of cost of housing and cashflow. At some point, you can run into analysis paralysis, and just need to make a decision. But that’s definitely the trickiest part.

If you haven’t already dove into the Bigger Pockets podcasts, I highly suggest them. They have a whole “beginner” series on how to get started as a real estate investor

helpfullike

I don’t know anything about rental, but I’ve started a few successful side hustle businesses and there are a few key steps I think make for a good start. Look into forming an LLC or S corp. you want to separate yourself from the liability and take advantage of corporate tax benefits as well as credit lines. If you have good personal credit you can leverage that relationship with your bank/credit card companies to get corporate credit and that is a really powerful tool down the road. Also, rental is hard work man. Good luck!

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Import and distribution (international supply chain).

What I don’t get is that once you have rental property, you have a 30-year mortgage. There’s no “passive income” unless rent is higher than your mortgage… for 30 years?

Plus the inherent gain on the value of the property itself - not a cash flow benefit, but on average home prices have gone up 6% / year since 1945.

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