Buying Your First Rental Property | Real Estate Investing Basics

Click this link to download chapter 1 of the ABCs of Buying Rental Property: bit.ly/BRPBook
Learn more about Ken McElroy and sign up for his video library at: kenmcelroy.com/membership-acc...
Join Ken McElroy as he talks with his co-writer for his latest book the ABCs of Buying Rental Property.
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• • •
⏰ Timestamps ⏰:
0:00 Introduction
2:30 Working with Ken
6:08 Introducing the ABCs of Buying Rental Property Book
7:00 Talking about a first-timers process
15:10 Stocks vs Real Estate
19:33 Property value discussion
20:13 The real purpose of investing
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Website: bit.ly/2DaIoPH
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Ken is the author of the bestselling books The ABC’s of Real Estate Investing, The Advanced Guide to Real Estate Investing, The ABC’s of Property Management, and has an upcoming book: "ABCs of Buying Rental Property: How You Can Achieve Financial Freedom in Five Years." Ken is a Rich Dad Advisor.
Ken's company: mccompaniesinvest.com/
#KenMcelroy #RealEstate #BuyingRentalProperty
15 Tips for Buying Your First Rental Property - Investopediawww.investopedia.com › ... › Real Estate Investing
7 days ago - Key Takeaways. Purchasing an investment property to earn rental income can be risky. Buyers will usually need to secure at least a 20% downpayment. Being a landlord requires a broad array of skills, which could be as diverse as understanding basic tenant law to being able to fix a leaky faucet.
‎Real Estate Investing Top 10 ... · ‎Self-Directed IRA · ‎Personal Loans
A Proven Formula For Buying Rental Propertieswww.moneyunder30.com › Real Estate
The foolproof formula for buying income-producing rentals · a. Buy below market 10-20%. · b. Property must generate at least a 15% ROI, cash on cash. · c. Buy in ...
How To Buy Rental Property | Bankrate - Bankrate.comwww.bankrate.com › mortgages › how-to-buy-rental-p...
Jul 9, 2020 - As a long-term investment, many have done well with real estate, but buying rental property at this time requires a look at new realities.
real estate coaching ken mcelroy real estate investing investing

[@Princess-rz5hn]

I'm 32 and I started my real estate investing 😁 Good Luck to everybody!

[@johnnyb33good21]

In 2016 Because of Robert Kiyosaki and Ken McElroy I jumped into real estate head first as I was exiting the military and ended up buying two 4plex's in 2017 & 2018 and used my VA 100% cash out refi home loan to pull equity out to buy more and I'm currently under contract on a 6-unit apartment building using seller financing.

[@jenniferpuentes7058]

That's awesome, congrats. I'm a vet too and I'm trying to get into real estate. Can you give me some advice?

[@BillyGreen1920]

What state?

[@johnnyb33good21]

@@BillyGreen1920 East valley of PHOENIX, Arizona. My 1st 4plex was purchased for $211,331 which was 52k a door. Similar 4plex's today are 100k a door. What market are you in?

[@johnnyb33good21]

@@jenniferpuentes7058 biggest advice is use your VA home loan to buy a duplex, triplex or 4plex instead of buying a single family house. Why? Because you can buy a small apartment building with 0% down with super low interest rate and live in one of the units while renting the others out allowing you to possibly live for free saving hundreds or even thousands of dollars evey month because you have help from tenants to pay your mortgage and even help to qualify for a larger mortgage. VA home loan is a great way to build a rental property portfolio with little money down. You just have to live in it for at least 1yr and then after that you can move out, rent the whole building out and buy another. if you're leaving the military make sure you have a job lined up so you don't have a big gap of unemployment. Lenders like to see consistent, stable income. Doesn't look good if you're constantly changing jobs or changing career fields unless there's a good reason like higher pay. Also, start building credit score now.

[@johnnyb33good21]

@@jenniferpuentes7058 if you have anymore questions add me on Instagram. My handle is my name Johnny. Mckeon

[@pedrofeliciano7041]

This interview feels very genuine from from the professor part. He actually looks very excited and amazed on learning real estates strategic and how beneficial could be when you do It right.

[@BillyGreen1920]

Thanks for mentioning Jim Rohn on a former video. Jims content is priceless.

[@riseyourvibration9669]

Agreed

[@goalsfirst2895]

wow! my husband and I love your videos! and then all the brave feeling come out thanks to you Ken

[@wertigo8894]

I've just purchased the book! Thank you for your work and great education Ken.

[@maxuria6371]

I'm 21 and this is just gold xD thanks for sharing this guys

[@donniemi1613]

Thank you Ken mcroy I'm 54 will be 55 soon you're the first one that had an older gentleman on. I want to thank you again I will always wanted to do this and I'm going to jump in 2021 .

[@MakeMoneyGuide]

Officially, you're one of my favorite KZbinrs out here!

[@matthockin3764]

Ken you the man been watching your channel since the start you almost at 100k subscribers, everyone smash that like button👍

[@Chris-ws2iy]

More of those please 🙏🏻, I am just starting with investing in properties. Thanks so much ❤️

[@mcarmengomez2562]

Thank you for sharing your authentic knowledge and expertise!

[@karyjimenez2472]

Ken. you are an amazing support with good heart you do not hide anything

[@robhtp3817]

I purchased it even before I heard the full interview. Thank you both!

[@LivingOffRentals]

As a real estate investor, this is a great story. Thank you for sharing!

[@AC-vp4ss]

Great video! Super informative! Thanks for posting!!

[@AlCalvo]

Can't wait to get started! I will buy real state and I will become very rich, mark my words! I really wish the best to anybody who's joining this journey with me

[@anaceciliagonzalez1448]

I recommend Ken’s book to my daughter who is buying her first rental income property👍🏻 Thank you Kenny!❤️

[@michelleorocio6810]

Thank you Ken for sharing this material!

[@danepaul6134]

Awesome video I love this channel can't wait to get my hands on this book 👍🏾👏🏾👏🏾

[@derekstalhut2193]

Great Story ! Thanks For Sharing. Life Changing Stuff

[@ezel909]

I love it! Thank you so much. I am in the beginning stages (videos, podcast, reading) and this is such an inspiration!

[@Aztecsoul_89]

Have you starting investing by now? If so how is it going so far?

[@jfrealestate201]

Definitely going to get the new book I already have the ABCs of property management by Ken. That one is much older but still great !

[@MasterAcquisition]

How many properties have you invested in? How many are cash flowing?

[@nasar2338]

Learned lot from the book.. thanks Ken

[@nicomorales244]

“The stock market is a device for transferring money from the impatient to the patient.” - Warren Buffet

[@tonydong13]

actually, its changing now, becomes a device that transfering money from the patient to the profit taking

[@rr8253]

Only true if you don't know what you're doing. If you know how Options work, and I mean really work, than you can do tremendously well in the stock market (and not talking about the Reddit crowd) or if you invest in good companies and buy them on sale (like Phil Town). I am trying for multiple income streams so as not to be dependent on any one stream.

[@NidouLove]

Love this video. I'm in the process of buying my first property. My goal is to own many of them

[@bradspeckman813]

Looking forward to reading the book

[@jimschmidt4089]

Probably one of your best interviews for me and relating to the potential real estate has for investing. Thank you.

[@flexaeona]

Yes and the book is great

[@AlejandroRodriguez-iu2bd]

Great content, THANK YOU

[@carrie668]

This inspired and encouraged me so much!

[@angelpink9890]

Thank You so Much, Sir.

[@ab221983]

thx for the video ken, from Costa Rica.

[@DownToSouthLondon]

This is great. Helpful video

[@hunterrees]

I already preordered your new book!!!

[@ericausten-kea9672]

Hey Ken. I just wanted to know in regards to your book, The ABCs of Real Estate investing, can it help someone that lives in another country and not in America?

[@Corpse1984]

I'm listening to that book right now!

[@dazisgud]

What happens if the real-estate market crashes? Can you survive refinancing after your property values have dropped? Is this in the book?

[@gugumpanza3665]

🙋‍♀️ Its on my list already, Thanks Ken.

[@MasterAcquisition]

Tackle that list girl!

[@diymechanicworkshorts2101]

10 minutes into it...is where it gets good.

[@sourcecreator2222]

Great content Ken bravo

[@jeremyparvinrealestateinve7087]

Great material ken

[@americans4freedomsd534]

Getting my copy now

[@Roy19189]

Great video !

[@mr.househack8767]

you're one of the best..

[@btownmxer]

Preordered off Barnes and noble. Looking forward to a good read

[@francisojavierpuertamaya9086]

Hello Ken, tanks a lot for this interview, it's very interesting. Only one question: Your new book is only in english, or you are going to print it also in spanish?. Tanks again.

[@greg7743]

The release date on Audible is 10/27/2020.

[@mrplummer1988]

That’s excellent

[@fuqutube]

Ken, I am running numbers on a 4plex and everything looks pretty good. Any thoughts on financing with a VA loan? I havent seen this covered by you yet. Thanks for everything you do. It makes a difference.

[@sharonbeatty8047]

Yes my husband and I bought our house with the VA loan and created an apartment in the basement. Our plan is to refi out and use the VA loan to get a duplex next year. I would love feedback on how good a plan that is :-)

[@russkydeutsch]

@@sharonbeatty8047 I used my VA loan for my place. Looking to move and rent this out. Can you use another VA loan for a second property?

[@moneytrends5231]

My main concern is being highly leveraged. How many of your tenants aren't paying rent because of COVID eviction protection?

[@polevixxxen24]

Exactly

[@OneAndDone5150]

Why wasn’t this responded to?

[@tl254]

@Shadow of Satos I think that's for people who actually live in the home they have a mortgage in. Mortgage forbearance doesn't apply to investment property was my understanding. Correct me if I'm wrong.

[@MeVale1987]

That certainly adds a layer of risk. My suggestion is to calculate this risk it into your buffer

[@joshuasmith4979]

Getting the endorsement of a true academic , especially of retirement age, is saying something about Kens system. Amazing.

[@polevixxxen24]

I need to watch this again and take notes 📝

[@rejpipeschimneysweepservic6624]

Quality content, can't wait to buy your book

[@dahliasinclair7363]

Which loan is better for first time investers, Conventional or FHA ? Does it really matter?

[@InvestorCenter]

Cash flow, cash flow, cash flow

[@suprajajs]

@Ken. Do you still think there ll be a housing crash in 2021? If yes, when ll it happen?

[@sakriso]

Do you have any content / books on creating wealth with AirBnB, VRBO, Corporate Rentals, etc.?

[@redsoxwinagain2007]

1st home I owned for 3.5 years and sold for over 2x what I paid. I wish I could go back to 1999. I would have bough lots of real estate, Amazon, and kept an eye out for Tesla and bitcoin.

[@prsjds1290]

A plus !!!!!!

[@linharessofia]

This just solve my dilemma. I bought a property full payment and after I thought I have done the dumbest thing until a heard this interview. So now I have a possibility to buy another property by mortgage the first one and try to start the cashflow game.

[@juanquindesjr.7201]

Hello guys, I'm trying to Dpwnload the first chapter and nothing is happening... how can you help??

[@eds8633]

Another great episode and I love success stories like this. I myself is a mid-life stage realty estate rental property investor with no mortgage and looking for my 5th next year but what triggered me was a life and death health scare in 2010 to leave a better future to my family. I think this book will be a great gift this Christmas to entice my children to financial freedom. Thank you Ken & David!

[@ryanthepianoman27]

How did you start? First deal? Bad tenants

[@eureka8164]

How about the risks involved with such investments?

[@MrWaterbugdesign]

As long as rental income keeps coming in it's a great system. I personally would not risk my house. I started by renting the house I live in. First roommates. Later I looked for SFH that I could split off an apartment to live in and rent the rest. I've had a condo and HOA homes, but really don't like HOAs and monthly fees. Doesn't seem like ownership to be.

[@humayunkabirlimon1772]

Thank for all help with your order please honorable and I am agreeing with Real estate business

[@marychriesconcha4651]

How long did it took to rent the property?

[@SelllandCambodia]

Hi, I am Cambodian, I am really inspired to do such thing due to your book, But may I have one question please, Mortgage: is it applicable in my country or around the world? If it inapplicable here, which loan I may take? Thanks for you values time.

[@elsan.6742]

Currently have an investment property free & clear and is fully rented. How can I do cash out? I've contacted several banks, said, can't be done. Am I missing something?

[@nielsbeck7461]

Do you have a canadian version.

[@OmriKarni]

Many thanks, Ken! This was a great video to watch and I really liked David's story. I have 2 questions in regards to the principles behind buying his first property. The first question is - I know that you are a big believer in Cash Flow and that this is what you are after. However, when David bought his first property it had no tenant in it and had no cash flow until he got his first client. Do you think this is a good thing to do? Or should we focus more on Cash Flow from day 1? My second question is - did David buy his first property in a bad condition and had to fix and renovate it or it was in a very well condition and ready to go? I'm asking because obviously if there are problems there is always room for appreciation which will help when he would like to refinance it and roll it over to his next property. Many thanks, Ken!! Highly appreciated!

[@MrWaterbugdesign]

One thing about real estate is it's more of a long term investment. Even with positive cash flow you're not making a lot, but are risking a lot. Over 5, 10, 20 years the profit goes up (hopefully a lot) and risk goes down. But I'm 65 years old. I'm actually looking more at cashing out rather than buying more property. My neighbor had a couple rentals and he was 85...why be a landlord at 85? He had about $800k in equity in those properties and really didn't like his family so no reason to have something to leave to them. I think he just liked having a job. Maybe just no need to spend that equity.

[@v1rotate391]

I paid off my house at 24. I kick myself now and wish I bought at least 4 or 5 properties in my neighborhood which is booming and rents are high. Making up for lost time now, 11 years later. Thanks Ken

[@amit04051979]

Sir I am 12 yrs old and want to build my career in real estate investing These are onne of the most knowledgeable videos on KZbin for me Thank you sir for giving me the knowledge Sir I have a question for you How much money do you put down on a typical 10 - 20 unit deal in America and are there any other ways to put as little as 5-10% down on that kind of deals Thank you once again sir

[@DarioPicaTips]

Always start small, then escalate. You first need a job to have a bank loan, then you can buy whatever your pay can afford. To buy a 10-20 unit complex you probably need a company and need some other people to invest together, the price could be around 2-3 mil so mimimum 400k cash + financing. Don't worry about this kind of deals now, focus on your education and get a job to have a loan

[@erikchipchase5530]

SgtHamster45 That is a very good question :)

[@amit04051979]

It is actually my parents account, they joined nine years ago

[@dd-xm2uo]

im looking for it in spanish..a shame i cant find it..will have to read it in english....will help me practice, thanks KEN!!!!!

[@JT-bb4lq]

It's okay... you might make youtube videos in spanish with everything you learn and eventually make money from it :-).. where do pñan to buy?

[@jakeweill]

Jorge, great advice...make it your own bus.!

[@bgentsja6762]

Really have to look up to this man. He got me starting on real estate. Just by his book.

[@JamesBeard360]

Thank you for the advice. I think I will look into it.

[@MasterAcquisition]

What do you mean starting on real estate?

[@diedrichteichroeb5834]

34 years old, no mortgage, house is valued at 2.2 million and have about a million dollars worth of vacant land. Always thought this was “freedom” but it certainly is not!! Moving into rental properties!!

[@brunomorales6113]

Ken! I live in Argentina and want to get into real estate. Here is clearly not a good place to find opportunities. What country would you recommend I should look into? At least to kickstart my investment career. The options I'm thinking about are Israel, Canada and Spain because I think it'd be easier to get my migration approved, and Germany or USA because I know the language and understand have a good economy. Am I off track? Thank you so much for all your wisdom!

[@JoseJoserealtor]

search for "Carlos Devis". His podcasts are really good for people all over the American continent. I think you will like it.

[@shymeeee]

Running the numbers during a historic economic downturn, complete with thousands of business closures, and millions of lost jobs, cannot be performed using standard templates. Realistically, you'd have to majorly increase the vacancy rate percentage, lower the projected gross income to account for lower rents (if things get bad, rents must be lowered), and account for significantly higher legal costs due to potential evictions. And since we're in the midst of a bubble (which will pop), anything purchased should be at a discount.

[@07slowbalt]

I rented alot especially during the last market crash. I can definitely say apartment leases definitely didnt go down for me.

[@alanc9561]

This seems like you can end up refinancing against the current value of your property. If the housing market crashes, as Ken predicts in other videos, it sounds like you could end up in multiple upside down mortgages, right? I feel like a strategy like this would be smart if you predict housing prices to grow for the next few years. But I don't think now is the right time.

[@07slowbalt]

I agree 100% with what you said. I guess being upside down on your rental mortgage doesnt matter if you plan on keeping your rentals going. When the market goes back up you wont have to worry about being upside down. At least holding on to your property longer will potentially remove your PMI or at the minimum apply more payments to your principle. I really want to buy my first rental next year if the market takes a dump but the thought of squatters worries me when the extra mortgage payment will be on me in uncertain times.

[@inspirationslifestyleco]

Sun City Center, Florida?

[@daliasaha8015]

but where in the USA are properties for this cheap? i cant find anything like that in a rentable area

[@Pular]

Is it a good idea to exit a property now, if I already have 2.5x the bought price, however still excellent cash flow. Such a hard decision.

[@JT-bb4lq]

If you have good cash flow, keep it. It's like a salary, who says no to extra monthly money and yo will make money as long as yo live or as long as you have the house.

[@jimross2101]

Recapture costs may change your mind.

[@andersvaran]

Hi Ken, I am 19 (still pretty "ignorant") but hypothetically, if I was to take on a mortgage of let's say 75% of a property and a housing crisis hits and the real estate market goes down 40%, wouldn't I lose my property due to foreclosure? Wouldn't I not overleveraged?

[@nick5141995]

Anders Varan It’s important to be ready to weather the storm when investing. If you can keep making the mortgage payments there’s no foreclosure. Even when a market crashes, the rental income usually doesn’t take that big of a hit. Your biggest problem will probably be vacancy. If you can’t find a good tenant after a certain amount of time, reduce the asking rent by like 50 bucks.

[@therealtae4291]

Ken , what if my property needs more in repairs that it chews away at the cash flow. Can I prevail with a negative cash flow , is it worth the risk ??

[@pitohead77]

risk comes with rewards. study the area you are investing in. and buy a property that has potential to improved. there’s no point in buying a property that is 100% fixed unless it’s cash-flowing. in california’s that’s nearly impossible to find.

[@therealtae4291]

@@pitohead77 appreciate it javi !!

[@hypekillacsplaya]

ok so, strategy is, take home equity out on your house which is a risk, to buy in full first rental property, then take another home equity out on that house, to buy the next, etc...til you have 10 property's at 5000 cash flow at least on each, then renters paying mortgage down til gone, throw extra on principle, and thats it correct?

[@ggc7318]

Never overpaid for any rental properties. Check cash flow FIRST ! Any hidden repairs; foundation, electrical, plumbing, roof, structure, termites, drainage or crazy neighbors. And start off with short half year or one year lease first till you know how to handle problematic tenants and repairs. .

[@PradeepKumar-oj5ce]

What if You don't get Renter for Your REAL ESTATE PROPERTY for Some Months.. Then How Can You Able to Pay The Bank EMI...

[@surendrashekhawat4155]

How does the equity work tho 😒

[@johnvirgilbasto362]

Uncle Ken I’m here lol

[@Eliglas]

What is really concerning is for instance in Belgium the prices for an appartment in my region are priced at 250k but rents are only 900 to 950 a month, should I buy or should i wait for a crash to buy since I don't have enough capital to get a positive cash flow each month. I actually cannot even get how you guys can get into 100% debt on a mortgage even if the mortgage is at 25 years and still get a positive cashflow. Every deal here with a 100% debt will result in a negative cashflow????

[@cancel.lgbtq.6892]

Wait for a crash.

[@JK-qn9qr]

Stock market is the same tho. you lose money if you sell. Now, just like leveraged stock, you have to sell if you can no longer pay the debt.

[@joshuahurt5939]

Downloaded Ch1 and purchased book. You’re content is phenomenal.

[@Pawzy123]

Go Cougs!

[@cancel.lgbtq.6892]

6.6% per year in stock return?? You are investing in wrong stock apparently. S&P 500 and index REITs can get you over 10% easily.

[@Chris-sc5jg]

Agreed.

[@theothertroll]

The real money in real estate is in selling courses on how to make money in real estate ~

[@rr8253]

Not true. That can be another stream of income. Your tenants pay down the mortgage. Also, as a general rule, the property gains over time, especially in times of inflation. When they go up in price (equity) that will all be yours to keep or use as leverage for other investments all the while this investment is paying for itself. How many other investments pay for themselves? I don't want to work for my money any more, I want my money working for me. The key for me is to not become OVER leveraged so that if you have a downturn, you can hang on because all downturns bottom out and come back - not guaranteed but so far, it has always happened. The alternative is to bury your head in the sand and hope that you can live on Social Security and government cheese.

[@ishanisdiary7413]

I enrolled in your course but can't access & not getting any response via mail

[@surendrashekhawat4155]

Ishani's Diary how much was the course ?

[@janachidakashi2254]

This Chapter in the book is five pages That's it Five ages I know this book is going to be good But you can't tell a book from 5 pages

[@MartinMartinez-uq4gx]

I wonder what Kenny thinks ab Grant Cardone

[@chrisgair563]

ABC of property rental book

[@OliverGrafTV]

You think now is a good time to buy a rental? Interest rates are fantastic, but a lot of people are predicting a significant value drop in 2021

[@cancel.lgbtq.6892]

Why would you buy anything now when housing bubble is coming? Just wait and see.

[@jackiebarton1137]

Why would I buy rental property when the government tells the renters they don't have to pay rent? That means I would pay it. If I buy now, the market is too high. If I buy later, finding a lessee with a job could be a problem.

[@dog_city]

Being negative will always hold you back from making money. They have companies that will manage your property for you which frees you up to work if your job pays enough to justify not investing time in your side hustle

[@hypekillacsplaya]

@@dog_city i agree, i didnt know they have companies to manage your property. I need cash flow properties, good screening process and believe that i will get me good tenants and get 10 to 20 5,000 cash flow a year properties to set me free in my life. this is gonna happen for me im sick and tired of being sick and tired.

[@rr8253]

I agree with Eric. You can find excuses to not become wealthy, all day long. Why would you put money in the stock market after Enron or Lehman? With that attitude, I would have missed out on doubling my money in the last 18 months. We have a management company and they screen tenants. We have a retired gentleman with a steady retirement income - not affected by Covid at all. You can buy in areas near military bases and rent to military personnel - they get disciplined if they don't pay rent and I believe that the government has a guarantee that you will get your rent from them. Military officers are the best because they have a decent income and many of them fix things in the house on their own.