Hi all, I’m looking to buy my first rental property. A three family apartment complex with a garage is preferable. I would to know what you all would consider as a good strategy for minimizing risk in the investment. I should add that I plan on living in one of the apartments/rooms.

Thanks!

find a local LL group. Notice I said group not mentor. Read the posts here. I can't tell you how much, even a seasoned LL learns here, each day. It's invaluable.

Second: target what you're looking for-- SFH's duplex-tri's multi unit complex. Maybe even VA or HUD foreclosures--

Whatever you target learn until you drop everything there is to know about your target.

We once had the Director of our local VA foreclosure division tell my wife and I-- "I can't stand working with you because you know more about the VA foreclosures then the people who work in my office".

Very proud moment.

I want to assume you have at least downloaded and read your local and state tenant rules, when you print them place into a 3 ring binder but flip the book when you put in the other set so they don't get mixed up. If you find something that seems so easy but is not clearly defined go visit housing court as an observer for 6-10 sessions learning how the court helps with partial payments, long term overnight guests, lawn parking, unauthorized animals, busted windows and police reports, narcotic sales from your place - everyone of us has had these events but your local court will have some way to help if your lease is worded legal and proper with least impact on owner/manager, find a couple investors groups close by and attend to learn of pending changes others share about things you think will effect your place soon.

Knowledge is power and the court always holds the business person responsible to know the rules.

You're off to a good start by visiting this site. Continue to stop by, participate in the discussions and read any of the post you can find on MA LLing.

Look for, join & participate in a local LL group.

Don't get emotionally attached to any prospective property.

Obtain & read the sixth edition of Property Management for Massachusetts Rental by H. John Fisher Owners available thru HAP Housing 413.233.1500

Start reading up on your local LL / Tenant laws, rules & regulations

Get a copy of the MA State Sanitation Code

I purchased my first rental at age 18. I was lucky to be a hands on helper to other landlords since I was around 10, getting some knowledge.

I'm now a licensed contractor, landlord, investor, owner and property manager. Many of my "friends" and their adult children make the mistake in not getting a professional inspection that covers everything under the roof.

A general inspection just lightly touches base with appliances, heating/air conditioning, roof, plumbing, etc. They conduct a visual inspection and don't dig deeper into issues, like the sewer line. If it flows then it's okay? Not really. This is also true with pools. Just because you don't see a crack doesn't mean there's not a leak.

So from time to time I've conduced inspection for friends and clients. In one case I told the "buyers" to have a "lead Paint" and "asbestos" test done on the walls, ceilings and wood trim. Their broker said I was crazy and just looking to make a few bucks. I didn't put in a bid to test or correct anything, I just gave free advice.

So after my friends over paid for a property, they moved in a began construction updates. They wanted to remove a wall to make the kitchen and dining room an open concept. I walked in as asked to see their "lab" reports. They laughed at me like I was crazy. So I took my microscope from my vehicle and viewed the plaster thrown in the dumpster. It had asbestos fibers. They had been living in a construction sight with the air running contaminating the entire house and occupants. A few test for a few hundred dollars would have saved them from the $20,000 clean up.

Who do you want to rent to? Where do they want to live? Buy it.

Since you're going to be living there as well, make sure it's not a place too far above or beneath where you're comfortable.

Along with the good advice above, I recommend taking RE courses at the community college level if available. You learn the legal knowledge and how to calculate things like cap rate along with fair housing laws, as well as cycles in RE, escrow process, etc.

My spouse and I took the Broker and Escrow degree programs at Saddleback College in CA back in 2010-11. (She got AA/AS degrees, I got the certificates.) I see they now have a degree in Appraisal too. They are online, though out of state tuition might be prohibitive. Whether to get licensed or not afterward is another whole topic.

Also - go with a 4 plex not a three plex if you can. Though personally I wish I'd invested in SFH's. It is hard to sell multis when you want to get out. The only buyers are other cheapskate investors. :) SFHs you can sell to a retail buyer. On the surface a plus with multis is all your headaches are under one roof. But the downside is then ALL your headaches are under ONE roof! :)

Make your offers low. Very low. So low you are embarrassed.

Buying it right is the best way to reduce risk.

Then, insurance.

Remember- no risk- no reward.

What JB said. Also a reply to GCARL -

When I sold my last multi I had such ridiculous low ball offers I didn't even respond to a couple. And the property fell out of escrow three times! It was a nightmare sale. We are talking an immaculate property, with (finally) great tenants in an excellent location, not a distress sale.

In contrast my only other multi sale a few years ago was a breeze. Someone approached me with a fair offer, not what I wanted, but by then I knew I was a builder and renovator (flipper) and not really cut out to be a landlord. I grabbed it, doubled my money, and got out from under it.

ned AL--------- you won't believe this Ned-- but we often offered more than asking price. When we were buying VA foreclosures-- we would offer 3 or 4K more. Some were 100% financing opr 3% down or 5% down.

There were reasons and many seasoned investors will know that TERMS of loans are very important as are kickbacks from agents who contribute to your success by giving you part of the RE commission back --- this gives you money for your next bid/purchase.

(A copy of what I replied to Andrew's post 5 up from yours)

Here's my advice to every new investor:

Knowledge is power and profit.

There is TONS of knowledge out there for what you hope to accomplish but it does not come to you. YOU have to get up and go get it. Invest in your knowledge as you would a college degree to earn a healthy six figure income for life. If you are smart enough to post here you can become rich thru RE.

You need to learn 3 new basic skills:

-Learn how to find properties and buy right

-Learn how to rehab/repair

-Learn how to manage a rental. Lotsa legal stuff and managing people to learn.

These can be learned one at at time in that order. Once you bought a property you can learn how to repair it and how to manage it.

How?

Get to National Landlord Convention in May. Learn from great speakers and rub shoulders with multi millionaires at dinner, etc. Millionaires don't come knocking on your door to teach you how to become rich. YOU must go to THEM. Convention is geared for that.

Convention and LL Boot Camp info is on this home page. The Convention agenda usually covers the basic topics I outlined.

Keep us posted! Jeffrey talks about using this forum as your Board of Directors for advice and guidance.

PS

Only take advice from happy, wealthy investors.