How to Buy Your First Investment Property

susiebraskett
Jun 17
2 min read

Investing in real estate is one of the most proven ways to build long-term wealth. But if you’re just starting out, the process can feel overwhelming. From financing to finding the right property, there’s a lot to learn. The good news? With the right strategy and support, buying your first investment property is absolutely achievable.

Here’s a step-by-step guide to help you get started:

1. Define Your Investment Goals

Before you even start browsing listings, ask yourself:

Are you looking for monthly cash flow, long-term appreciation, or both?
Do you want a rental property, a fix-and-flip, or a vacation rental?
How involved do you want to be in day-to-day management?

Your goals will guide the type of property, location, and financing strategy you choose.

2. Get Your Finances in Order

Check your credit score. Lenders typically require a 620+ score for investment loans.
Reduce debt where possible to improve your debt-to-income ratio.
Save for the down payment. Investment properties usually require 15%–25% down.
Factor in additional costs: closing fees, property taxes, insurance, and repairs.

Pro tip: Talk to a lender early to get pre-approved and understand your options.

3. Choose the Right Market

Not all areas offer the same return on investment (ROI). Look for:

Strong rental demand
Affordable property prices relative to rent potential
Growing job market and population
Low vacancy rates

Local knowledge matters. Partner with a realtor who understands both the area and investment strategy.

4. Run the Numbers

Analyze each property using key metrics:

Cash flow: Monthly income – expenses
Cap rate: Annual net income ÷ purchase price
Cash-on-cash return: Annual cash flow ÷ total cash invested

Only move forward if the numbers work—not just because the property “feels right.”

5. Understand Your Financing Options

Common ways to finance your first investment property include:

Conventional loans
FHA loans (if you live in one unit of a multi-family home)
Portfolio or hard money loans for flips or unconventional properties
HELOCs or cash-out refinance from your current home

Each has pros and cons—choose what aligns with your risk tolerance and goals.

6. Inspect, Plan, and Budget

Before finalizing your purchase:

Hire a licensed inspector to uncover hidden issues.
Budget for immediate repairs or renovations.
Get quotes from contractors if major work is needed.

Unexpected repairs are one of the most common ways investors lose money—do your due diligence.

7. Close the Deal and Prepare for Management

Once everything checks out:

Close with your lender and title company.
Set up property management (DIY or hire a professional).
Get the property rent-ready: clean, repair, photograph, and market.

If renting, screen tenants carefully and have a lease agreement in place.

Final Thoughts

Your first investment property won’t just grow your wealth—it will give you valuable experience. Take your time, ask questions, and surround yourself with professionals who know the industry.

Ready to Get Started?

If you're thinking about buying your first investment property, I can help you find the right deal, run the numbers, and connect you with lenders, inspectors, and managers. Let’s build your real estate portfolio the smart way—together.