Before you look at a single property, define your buy box: target price range, required cash-on-cash return, acceptable neighborhoods, property types, and distance from your home. Investors without defined criteria buy emotionally and wonder why the numbers do not work. Your criteria are your filter — and they will eliminate 90% of properties before you ever visit them.
Investment property conventional loans require 20–25% down and carry rates 0.5–1% above primary residence rates. FHA loans are available for owner-occupants buying 2–4 unit properties — if you are willing to house-hack, this is the most powerful financing tool available. DSCR loans require no income verification but typically need 20–25% down and base qualification on rent income vs payment.
Every property you consider needs a full financial analysis before you make an offer. Calculate gross rent, subtract vacancy (5–10%), subtract operating expenses (30–40% of gross rent as a rule of thumb), and subtract mortgage payment. The result is monthly cash flow. Divide annual net income by total cash invested — that is your cash-on-cash return. Most investors target 6–10% CoC on first rentals.
Once you have found a property that meets your criteria, move quickly. Your inspection focuses on major systems — HVAC, roof, electrical, plumbing — and potential deal-killers. Negotiate repair credits rather than seller repairs when possible — you want control of the scope.
Year one is the hardest. You will have unexpected maintenance, potential vacancy, and the learning curve of being a landlord. Budget a 10% operating expense buffer above your model. Most landlords are cash-flow positive by month 12 once the property is stabilized and initial deferred maintenance is addressed.
Dan White is a licensed Virginia real estate agent at Pearson Smith Realty and founder of FreeDealCalc.com. He has been investing in Northern Virginia real estate for 20+ years.