7Steps. To Rental Real Estate Investing Success

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1 7Steps To Rental Real Estate Investing Success Rental property investing can seem overwhelming, especially for first time investors. At Dwell Finance, we re here to help you get started with your first investment or grow your current portfolio and will be there for you at every stage of growth along the way. Build your future One property at a time. Copyright B2R Finance L.P.

2 Please read our disclosure. The information in this document is provided for informational purposes only and does not constitute investment, real estate, or legal advice. This information should not be regarded as a recommendation or an offer to buy or sell any product or service to which this information may relate. No representations or warranties whatsoever, express or implied, are given as to the accuracy or applicability of the information contained herein. The information may be modified or rendered incorrect by changes in the marketplace or developments in the law, or for any other reason, and may not be applicable to any individual reader s facts and circumstances. Third parties, websites and other entities referred to in this guide are provided for informational purposes only. Such entities or websites may require the collection of your information and/or payment of fees to use their services. These entities are unaffiliated with B2R Finance and Dwell Finance and we make no representations or warranties, express or implied, regarding the quality or suitability of the content, information or services they offer. 1

3 Step 1 Prepare Learn the jargon and mathematics of the industry; sources such as BiggerPockets.com and FlipNerd.com can be good places to start. Build your business plan, outlining goals, strategy, personal financials, property criteria, and level of financing needed. Assemble your team: real estate attorney, accountant, lending partner, realtor, escrow officer or title rep, insurance agent, contractor, property manager, and financial advisor; be sure to engage people that have experience in rental investing. Consider setting up an LLC and open bank accounts for rent and security deposits in its name. Familiarize yourself with state and local rental property laws and regulations. Get approved as a borrower from your lending partner and assemble the necessary documents. 2

4 Step 2 Identify Your Investment Property Search rental markets near you through sites like Investability.com or Zillow. com and weigh key indicators, including unemployment, crime, population trends and occupancy rates. Establish average base rent for attractive markets. Focus on undervalued property purchase opportunities. Select a property that meets your criteria and negotiate price and terms with the seller. Perform thorough due diligence on property (10 days minimum) and budget the property s repairs, monthly expenses, rental income, and cash needed in reserve. Line up bids from licensed, bonded and insured contractors for repairs, and obtain permits if needed; again, be sure to engage a contractor familiar with repairs on rental investments this can save you money in the long run. 3

5 Step 3 Secure Financing Not all loans are created equal. Partner with a lender who understands your business and will work with you to achieve your short- and long-term financial goals. Most traditional lenders will evaluate your personal income and financial situation, while asset-based lenders will generally examine the cash flow of the rental property. Determine which lender is right for you. Step 4 Seal the Deal 4

6 Step 5 Designate a Property Manager or DIY The preferred route of seasoned investors, a property management company or individual will, on your behalf, market your property, choose quality tenants, complete paperwork, collect rent, handle maintenance, and stay on top of ever-changing regulations all for roughly 7-10 percent* of the rent you collect monthly. If you choose to hire a property manager, clearly outline duties and responsibilities in the agreement. If you choose to manage the property yourself: Purchase property management software to facilitate and track operations. Assemble your maintenance team: general contractor, plumber, electrician, cleaner, landscaper, etc. Repair, refurbish and secure the property, adhering to local, state and federal regulations. Draw up attorney-reviewed (or state-issued) leasing documents and tenant communication forms. Prepare for required ongoing maintenance like keeping electrical, sanitary, plumbing, heating, ventilating, and air-conditioning systems operating safely. *On average 5

7 Step 6 Market Your Property Use listing websites and/or list your property for rent with a licensed realtor. Employ a multi-pronged approach by creating a website, YouTube virtual tours and utilizing social media. Publish your minimum rental criteria and ensure compliance with federal, state and local anti-discrimination and deceptive trade practice laws. Note that if you ve chosen to hire a property manager, he or she could manage this process for you, provided it is included in your agreement. 6

8 Step 7 Find the Right Renter Screen prospective tenants by checking their credit history, criminal background and former landlord references, as well as verifying sufficient, steady income. Consider using National Tenant Network ( com). Notify both accepted tenant(s) and those rejected due to credit score. Complete inspection report of property before tenant moves in. Execute lease, collect security deposit and first month s rent, and set move-in date. Onboard your new lease into your management software, and always follow the timelines set forth in the agreement. Note that if you ve chosen to hire a property manager, he or she could manage this process for you, provided it is included in your agreement. 7

9 Copyright B2R Finance L.P. Dwell Finance is a business division of B2R Finance L.P., NMLS ID # , 4201 Congress Street, Suite 475, Charlotte, NC B2R Finance L.P. only makes loans for business purposes. B2R Finance L.P. is not currently licensed in Utah and is not licensed for certain loans in Idaho. B2R Finance L.P. is licensed or exempt from licensing requirements in all other states. Your specific facts and circumstances will determine whether B2R Finance L.P. has the authority to approve loans in your specific jurisdiction. B2R Finance L.P. operates out of several locations, but not all locations conduct business in all jurisdictions. Arizona Mortgage Banker License BK# California: B2R is not licensed in CA so it only makes CA loans arranged by licensed real estate brokers. Minnesota: This is not an offer to enter into an agreement. Any such offer may only be made in accordance with the requirements of Minn. Stat (3), (4). 500 North Rainbow Blvd. Suite 300, Las Vegas, NV Nevada Mortgage Broker License No Oregon Mortgage Lender #ML Consistent with Federal Fair Lending Laws, Dwell Finance does not discriminate based on race, color, religion, national origin, gender, age, handicap, marital status, familial status or because all or part of your income may be derived from any public assistance program. 8