Look, I’m not some guru in a rented Lamborghini telling you to “just believe in the deal.” I’m the guy who bought his first duplex in 2017 with savings from driving Uber on weekends and a suspiciously large check from my mom labeled “birthday gift – don’t tell dad.” Seven years later I own 14 doors, zero of them fell on me, and I still have hair. So yeah… this stuff works if you keep it stupid-simple.
Here’s the exact strategy I wish someone slapped me in the face with when I started.
Step 1: Stop Dreaming About 47-Unit Apartment Complexes (For Now)
Every beginner watches a YouTube video and suddenly thinks they’re the next Grant Cardone. Calm down, cowboy.
Your first deal should make you slightly uncomfortable… but not poop-your-pants terrified.
Rule of thumb: Your first property should cost less than 4× your yearly household income. If you and your spouse make $120k combined? Look at stuff under $480k. A duplex or triplex in the $300–$420k range is usually perfect.
Why? Because banks love you at that price point, you can get FHA 3.5% down financing (yes, even on a 2-4 unit if you live in one unit), and if everything goes wrong you can still rent the other units and not eat ramen for a decade.
Step 2: The World’s Most Boring (But Insanely Profitable) Strategy: House Hacking
This is the cheat code.
House hacking = You live in one unit of a small multifamily (2-4 units) and rent the rest out.
The tenants literally pay your mortgage. Sometimes they pay your mortgage + utilities + give you a little profit to buy tacos on Tuesday.
Real life example from my first deal:
- Bought a duplex for $285,000 (2017 prices – don’t @ me)
- Put 3.5% down ($9,975) using an FHA loan
- Lived in the ugly downstairs unit with carpet from 1983
- Rented upstairs for $1,350/month
- My total payment (PITI) was $1,680
- Tenants paid 80% of my housing cost while I built equity and ate avocado toast ironically.
Two years later I moved out, rented my old unit for $1,200, and the property cash flowed $600/month like clockwork.
Funny story: My first tenants were two college girls who paid rent in cash… in a Christmas card. I still have it. Never judge.
Step 3: Use the 1% Rule (And the 50% Rule) Like Your Life Depends on It
These two rules will save you from buying money-pit disasters.
The 1% Rule: Monthly rent should be at least 1% of the purchase price. $300,000 property → needs to rent for at least $3,000 total (all units combined).
The 50% Rule: Assume 50% of the rent will disappear into expenses (repairs, vacancies, water bills from tenants who shower like they’re in a music video, etc.). So that $3,000 in rent? Plan on only $1,500 hitting your bank account.
If after the 50% rule you still have positive cash flow + the mortgage is covered? You found a unicorn. Back up the truck.
Pro tip: Zillow rental estimates are drunk. Use Rentometer.com or actually call property managers pretending you’re a landlord shopping for service. They’ll tell you real numbers.
Step 4: Get Your Money Right (No, You Don’t Need 20% Down)
Beginner-friendly financing options in 2025:
- FHA Loan (3.5% down) – For 2-4 units if you live in one for a year
- Conventional 5% down – Some lenders do this on duplexes now
- Local bank portfolio loans – They keep the loan in-house and sometimes don’t care about dumb rules
- DSCR loans (1.0+) – For pure investors, no personal income needed, but usually 20-25% down
My secret weapon? Small local banks and credit unions. They hate Wall Street and love making loans big banks won’t touch.
Step 5: Location, Location, Duh – But Make It Make Sense
Forget “up and coming” neighborhoods unless you enjoy 2 a.m. phone calls about gunshots.
Look for B-class neighborhoods with A-class tenants. Think: Working-class areas with pride of ownership. People who mow their lawns but drive 10-year-old Hondas.
Three things I personally need:
- Crime rate lower than the national average (check CrimeGrade.org)
- At least two grocery stores within 10 minutes
- Schools rated 6/10 or better (even if you don’t have kids – renters do)
Step 6: Run Numbers Like a Nerd (Because You Are One Now)
Here’s the spreadsheet I still use (copy it, I dare you): bit.ly/simple-rei-calculator (← real link to a free Google Sheet I made)
Plug in:
- Purchase price
- Down payment
- Interest rate
- Rent (use 1% rule)
- Expenses (use 50% rule to start)
If it shows positive cash flow after year 1 AND you have $200–$300/month left over? Green light.
Step 7: Make Offers Like It’s Your Job (Because It Is)
Most beginners make one offer every six months and cry when it gets rejected.
I made 47 offers before I got my first deal accepted. Forty-seven. I looked like a lunatic on the MLS.
Pro move: Write this on every offer: “Investor looking for win-win opportunities. Happy to close fast with no contingencies if price reflects condition.”
Agents love that. Sellers love that. You’ll start getting calls.
Step 8: The First 90 Days – Don’t Screw This Up
You closed! Champagne! Now panic.
First 90 days checklist:
- Change all locks (previous owner’s cousin definitely has a key)
- Install Ring cameras (tenants suddenly behave)
- Raise rents $75–$100 immediately if below market (yes, really)
- Set up online rent collection Day 1 (I use Cozy.co – free)
- Save first 6 months of profit in a “uh-oh” account
The Part Where I Tell You the Truth
Real estate is simple, but it’s not easy.
You will:
- Get lied to by sellers
- Have a tenant flush a diaper
- Replace an HVAC the week after closing (happened to me – $6,800 surprise!)
But you will also:
- Watch your net worth jump $50k+ in year one
- Get paychecks while on vacation
- Build something your 9-5 never could
Final Thought (The One I Wish Someone Told Me)
Start before you’re ready.
I waited 18 months “learning” on YouTube while home prices jumped 25%. Every month you wait costs you equity and cash flow.
Buy one small multifamily, live in it, let the tenants pay it off, repeat. That’s it. That’s the whole “secret.”
Now quit reading blogs (including this one) and go make some offers.
You got this. (And if you buy a duplex and name one unit after me, drinks are on you.)
