Getting started in real estate is less about genius and more about method. This guide walks you through the essential concepts, practical steps, and early mistakes to avoid so you build a strong foundation.

Core concepts you must know

• Cash flow — monthly rent minus all expenses (mortgage, taxes, insurance, maintenance, vacancy allowance). Positive cash flow means the property pays you each month.

• Appreciation — long-term rise in property value driven by demand, improvements, and macro factors.

• NOI (Net Operating Income) — rental income minus operating expenses (not including mortgage). Used to value properties.

• Cap rate & cash-on-cash return — quick ways to compare investments: cap rate = NOI / purchase price; cash-on-cash = annual pre-tax cash flow / actual cash invested.

  
  

Types of entry (choose one)

• Buy-and-hold rentals — steady income, long-term appreciation.

• House flipping — shorter cycle, higher risk/reward.

• REITs & funds — passive exposure with little hands-on work.

• Wholesaling/subject-to deals — more creative, requires networking and contract knowledge.

  
  

How to pick your first market & property

1. Decide your goal: cash flow vs. growth vs. tax benefits.

2. Market research: population/job growth, rental demand, vacancy rates.

3. Neighborhood checklist: transit, schools, crime, amenities, comps (recent sale prices).

4. Property checklist: condition, layout, roof/electrical/plumbing, repair estimate.

   
   

Financing basics

• Get pre-approved — shows sellers you’re serious.

• Compare lenders: conventional vs. FHA vs. portfolio vs. hard-money (short-term).

• Factor in down payment, closing costs, and reserves.

  
  

Due diligence & inspection

Hire a licensed inspector and budget 10–20% of purchase price for unforeseen repairs (or build a contingency).

First 90-day plan after purchase

• Fix urgent maintenance.

• Prepare property for rent (safety/compliance).

• Market aggressively and screen tenants thoroughly.

• Set up accounting and emergency fund.

  
  

Final tips

Start small, document every step, and treat the first property like a learning lab. Over time scale by reinvesting equity or leveraging conservative debt.