7 Ways to Buy Your First Home with an Investor’s Mindset


  • (1) Pick your real estate investor’s strategy and aim to stay local

  • (2) Take all emotion out of the home-buying process

  • (3) Buy cosmetically ugly fixer-uppers only

  • (4) Know how to properly estimate renovation cost and have a large gap for profit + emergencies

  • (5) Update to rental-grade only and DO NOT over-renovate

  • (6) Be prepared, quick, decisive when it comes to deals

  • (7) Have a team of professionals to support you

In March 2021, my fiance and I made the largest purchase of our lives, we bought our first home in the Bay Area CA, specifically in the East Bay Area.  No, this article isn’t about us celebrating the idea of having our “forever” house, but more about the vital decisions and mindset that we had to enforce to start building our RE Investing portfolio. Here are 7 strategies on how to buy your first home with an investor's mindset. 

(1) Pick your real estate investor’s strategy and aim to stay local

This is the most important step. While there are many strategies toward RE Investing (REI) such as cash flow, appreciation, long-term rentals, out of state investing, BRRRR, house-flip, whole-sale, etc; - you must first decide on what type of RE investor you want to be and what strategies you want to use to build your portfolio. Certain areas, especially in the Midwest, can cash-flow quite well; while some areas like CA can appreciate more.

  • My 6 REI goals are simple:

  • (1) Buy local “GAP DEALS” aka cosmetically ugly fixer-uppers within desirable locations (aka not a warzone), within 30-45 mins of where I live.

  • (2) Deal must be significantly below market value comparables, have a large “gap” of profit where I can renovate to a safe, high-quality rental grade with the goal to rent out long term.

  • (3) While every market is different, my specific local market is the Bay Area, CA which doesn't cash flow very well, but has ridiculous appreciation. So each month while the property might even have negative cash flow, over time it will increase in value and increase my overall net worth.

  • (5) Aim for fewer numbers of properties but higher value, basically less tenants to manage.

  • (6) Repeat every 2-3 years using cash-out refi if needed, with a goal of 10 rental properties or a total $10 million RE portfolio by age 65.

With this growth and long term mindset, we set out to hunt for our first deal. It took us an average of 1.5 months after close to 20+ showings and bids but we were able to find one that fit all of the requirements. 

Asking Price: 22+ Bid, highest offer was $1.15M
Purchase Price
Estimated Renovation Cost: Interior Only
After Repair Value (ARV): $1,250,000 to $1,360,000
Total Profit “Net Worth”

(2) Take all emotion out of the home-buying process

What happens when you try to compete with emotional 1st time non-investor home buyers? You are always going to lose in price!  Why? Because the moment someone starts to imagine their little future kids running around in the backyard, emotional homebuyers will always irrationally overpay. 

So what did we do? We literally went into each house and analyzed it straight from a strict requirement checklist: 

  • Is it in a good, safe, well-desirable location where we can easily rent it out? 
  • Are all major systems like structural, electrical, plumbing, roofing intact? 
  • What is the estimated renovation cost? 
  • What is the estimated after-repair value (ARV) compared to neighborhood comparables? 
  • What is the best competitive offer that we can put forward without going out of budget? 

There was literally no “I really like the color of this countertop” or this house “feels homely”. It kept the whole buying process very strict and kept us from overbidding.

Financial Pearl

The moment I see ugly carpets and hideous paint with popcorn ceilings, some cat urine and even mildew or mold, my financial side  gets super excited! Why? Because all of these cosmetic issues are the cheapest and easiest to fix, and provide the most “bang for your buck!”

(3) Buy cosmetically ugly fixer-uppers only

We didn’t even look at fully renovated, turnkey houses because when you buy a full-renovated house, you are basically:

  • (1) Paying the full fair market price and it is difficult for you to add value to the house via renovation
  • (2) Again, competing  with emotional 1st time home buyers who will always outbid you.

So what did we aim for? Cosmetically ugly houses that have outdated paint, carpets, flooring, cabinets, lighting, basically things that are the cheapest to fix up. The smellier and uglier the flooring, the more potential it had.

Financial Pearl

Avoid the 4 major issues: Structural damage, outdated electrical, older cast-iron or galvanized plumbing, and lastly older roof. All of these 4 components were the MOST expensive to fix up ranging from $15,000 to $200,000+. Not worth the risk or stress level, especially for a newer RE Investor like me.

(4) Know how to properly estimate renovation cost and have a large gap for profit + emergencies

Estimating renovation costs can feel daunting at first but it does get easier with each house bid.  Each area can range vastly different in price, like a full kitchen remodel in the Bay Area can cost up to $30,000 while that same $30,000 can fix up the whole interior of a house in the Midwest. 

But if you break down your overall scope of work into subsections and keep it simple (basically cosmetic), then you can break it up by hiring each subcontractors such as:

  • Paint (interior/exterior) 
  • Flooring 
  • Electrical 
  • Plumbing (for bathroom and kitchen install) 
  • Roofing 
  • Landscaping/Demolition 
  • Handyman/general contractor: for everything else

If you are tearing down load-bearing walls, moving plumbing around or adding on units (basically anything that requires permits which can add a 3-6 month approval process) - then you are over-renovating and this is going to be extremely costly and time-consuming. But if you keep your scope of work low-maintenance,  there is usually no need for a general contractor (who usually up-charges a 20% premium). 

For our 4 bedroom/2 Bath 1,544 SF house, we estimated that since there was no major system damage, a basic RENTAL-GRADE cosmetic renovation would be less than $50,000, with a $10,000 cushion (~20% extra) for unexpected emergencies.  This means since we bought our fixer upper below market value at $1,000,950 with ARV around greater than $1,250,000, our profit GAP would be close to $250,000.  Even if the foundation was entirely broken (worst case scenario) and requires a $200,000 additional budget to repair, we would still be okay because this was such a good deal to start with. 

Financial Pearl

Talk to multiple local subcontractors within each scope of work and ask them via Yelp, Homeadvisor, ThumbTack for a quick online quote with your attached photos/measurement. They are usually quite responsive and can give you a rough estimate of the online cost within 24 hours, without you wasting their time in person for a bid.

(5) Update to rental-grade only and DO NOT over-renovate

Do you know why a lot of RE investors and especially 1st time home buyers lose money? It is because they over-renovate and blow their budget. Hey don’t get me wrong, I like nice luxurious things and if this was my forever home, I would build a pool, get marble countertops and maybe add on some engineered hardwood floors. But this isn’t my forever house, it is going to be a future rental.  

For every dollar you spend, ask yourself if the tenant will pay more 2-3 dollars in rent? If no, then focus on the renovation that will matter the most and get the best quality material at an affordable price.

Things that we did “splurge” on were things like new matte-black kitchen/bathroom cabinet knobs and handles, matte black door knobs, luxury vinyl plank flooring, new LED lighting, high-quality fans, new standard size bathroom vanity, new interior/exterior paint, reglazing of shower tubs, etc. 

Why? Basically all of the things were not that expensive, but all things that the tenant can touch & feel and see when they first enter the room.  This will bring in the most value as a rental and should be prioritized first, most are relatively cheap compared to the big ticket items.

Will  tenants pay significantly extra rent if I replaced my kitchen granite countertop with marble? If I had hardwood floors? Dual pane windows? Custom crown molding trimming? Beautiful landscaping with a water foundation? NOPE! Not at all, so definitely not worth the investment. 

With that being said, I am not going to be some slum landlord who opts for the cheapest material and doesn't do any repairs. My goal with any rental is to UPDATE all systems to be safe (like plumbing and electrical), UPDATE the interior to be cosmetically clean and beautiful but avoid costly UPGRADES.

Financial Pearl

Keep it basic and go with the trend that 90% of buyers will want. This will keep your rental appealing to 90% of renters out there. If you go too custom because it is your own personal taste, that might drive away a lot of potential renters (avoid that accent red wall!). What we did was walk through all the newest construction houses and literally just copy their style.  Remember basic and normal is good when it comes to rentals and will attract the majority of renters/buyers.

While every decade will have a fad that eventually fades, you will want to stick with the trend that will be somewhat “timeless”. For example, gray beige wall color with swiss-coffee white window trim with simple bathroom subway tiles are “modern/timeless” and should last for a while, which avoids costly updates.

(6) Be prepared, quick, decisive when it comes to deals

 Real estate moves surprisingly quite fast! At the beginning of my home search, I would see a listing go live on a Multiple Listing Service (MLS) like Redfin, then wait a few days to initiate any action since in my mind, the offer due day wasn’t for another 7 days. This was a HUGE mistake!

Listing agents get flooded with messages and calls from numerous buyer’s agents the moment a house hits the market, so usually the buyer’s that form a relationship within the first 1-2 hours often will have the most impact when it comes to the final decision.

Most listing agents already have a general idea who they want to sell to within the first 1-2 days simply because they remember the first few buyers that contact them first. After 1-2 days, they tend to passively screen all other inquiries or simply won’t have any time to get back to them. 

So for me personally, since I went dual agency (basically used the same listing agent to represent me, a strategy not for the faint of heart), once a listing went live, I would contact the seller’s agent directly, introduce myself and have them email me all the home disclosures/inspection reports. If it was a house that met my criteria, then I would send the listing of all my financial documents (preapproval letter, proof of funds, offer letters with terms, and review of all inspection report), with the intent to ask them if they want to represent me as a dual agent, basically doubling their commission to 6%, all within 3 hours. 

I worked with close to 3+ dual agents and all of them complimented me on how quick, transparent and prepared I was as their client, even if I didn’t get a deal.

The saying that “The early bird (also the most prepared) will often get the worm” couldn’t be more true in real estate. 

Financial Pearl

Be quick and decisive when it comes to real estate! When hunting for your first home, track the MLS daily (almost hourly) for new listings to pop up. Then CALL the listing agent immediately (or have your agent do it immediately) within 1-2 hours to establish relationship and introduce yourself.  This will allow you to get the best insider's information and form that vital relationship. Keep constant communication with the listing agent.

Remember if there is no communication, then the deal is already dead. 

(7) Have a team of professionals to support you

  • The three core members of your local real estate team as a first time home buyer should be:

  • (1) Your real estate agent who is also an RE Investor themselves

  • (2) Your loan officer

  • (3) Your contractor + team of subcontractors

I cannot emphasize the importance of a good real estate agent (there are a lot of awful agents out there since the barrier to entry is so low), so aim to find one that is a RE investor themselves since they will be able to help you quickly estimate renovation costs and neighborhood comps.

But with that being said, I started with a great RE agent who was a fellow investor himself. Nice dude, but he was simply not aggressive in telling me what I needed to do to be competitive, especially in this seller’s market. All of our offers (over 10+ bids) were not even in the top 3, which resulted in wasted days off (as an optometrist, it was extremely difficult to take time off of clinic). I finally got frustrated and decided to go to a dual agency. 

While I don’t recommend this for the typical home buyer, since you have to do your own due diligence (I basically double-check everything the agent told me) - the benefits often outweigh the risks, such as obtaining invaluable insider knowledge about the house and the seller’s motivation.  Lastly, a dual agent is more motivated to get your offer accepted to get that sweet sweet double 6% commission (we can debate the ethical ramifications about this another day).

Secondly, your loan officer should be another vital part of your team. Keep them constantly in the loop and cc-them on every single email thread. If you need to adjust your overall loan amount/offer, make sure your loan and financials still make sense. Make sure you constantly communicate with them and drop everything to give them the financial documents they need to get your loan approved.

Special Shout-out to Lee Raykovicz  during the whole loan process and helped me get the lowest fixed rate with the fastest closing escrow!  VIP service for sure! 

Lastly, your general contractor is another vital part of your team. Contractors often get a really bad reputation for screwing over investors, but honestly some RE investors think they are above paid labor and are often quite demanding. A great contractor who is affordable and responsive is like a diamond in the rough, so make sure you respect their profession and pay them accordingly.

Reach out to a few recommended contractors either online or through your RE agent/network, and pay them for their time. If I need a 2nd opinion, I usually like to offer $100-200 for my contractors to do a walk-through with me when I am about to close on a house, or a simple $50-75 for them to review an inspection report online and give me a rough bid. Most contractors will do the first 2-3 free of charge, but if you are constantly using their services, then please pay them accordingly.

Financial Pearl

While not for the faint of heart or an inexperienced home buyer,  having the listing agent represent you as well via dual agency is a great RE strategy to get insider information on what seller actually want beyond price and terms, increasing the likelihood of you getting the deal at a significant better price . The dual is more motivated to get your offer accepted to get that double 6% commission (we can debate the ethical ramifications about this another day). Of course, it is is not without risk as you have no one on your side, so do your own due diligence and take everything the dual agent said with a grain of salt. 


Buying your first house (or any piece of real estate)  is often the first step and vital step toward massive wealth building (even over stocks!), but avoid the pitfalls of being “house-poor” and regretting the largest financial purchase of your life by NOT being the typical emotional home buyer mindset. Think like a RE investor, run the numbers correctly and have the proper negotiation tactics to close your deal.  Learn when to say NEXT and move on.

Now that our house is fully renovated to rental-grade, it is almost time to do a post-6 months cash-out refi (expected amount ~$175K) leaving 25% behind and start hunting for the next rental within 1-2 years.



BEFORE Kitchen

AFTER Kitchen

BEFORE Living Room

AFTER Living Room

BEFORE Bathroom

AFTER Bathroom

BEFORE Bedroom

AFTER Bedroom

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About DatBuiOD

Dr. Bui is an optometrist at the Apple Wellness Center in the heart of Silicon Valley. He has a deep passion for ocular disease and healthcare technology. He started his career with $220,000 of student debt and was able to finish this massive debt in 5 years using budgeting and personal finance strategies, along with aggressive investing. He is a big advocate for passive index funding with a small portfolio toward individual technology stocks. Lastly, he wants to help all new doctors and high-earning professionals navigate toward wealth and financial independence.

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