Ways to Invest Real in Estate

Ways to Invest in Real Estate

Real Estate can be a wonderful Investment.  I know many people that have made a career out of it. Here are a few ways many people have profited from Real Estate Ownership.

Rental Properties – Your Real Estate Agent or an Appraiser should be able to help you set your lease amount.  If you price it too high your tenants will be moving out frequently.  A fair rent could land you a long time tenant.

Nothing is better than a good Tenant. Be diligent and  check past rental  references, the Sex Offender Site and conduct a criminal back ground check before you sign the lease.

Spend time finding a lease that protects you and know the State Laws and your obligation as a Landlord.  Believe me, the Tenant will know theirs.

Resale – Buying a property at the right price, some properties require repairs or/and remodeling, then reselling the property for a profit. Of Course, these Investments can also turn into a not so good Investment.  It is  important that you take your time when purchasing a property.  Hire a Professional Home Inspection before you purchase a Property.  Buying AS IS is nice for the Seller but can be a nightmare for the Buyer.  Do the math and make sure you allow for hidden defects. If the numbers don’t add up its best to move to the next venture.

Contract Sale – Some Sellers like to be the bank for the Buyer. This is great for the Buyer if they are unable to obtain a loan right away.  Profitable for the Seller because of the Rate of Return on their money is favorable.  Qualify your Buyer like a Bank Underwriter would before they close the loan.  Be thorough.  Pull their credit report, check credit  references, check the Sex Offender Site and conduct a criminal back ground check.  You might still wish to proceed but know your Buyer before you become the Bank.   Allow the Buyer time to conduct a Home Inspection.  Know that they can afford the house. An Attorney is a must and should prepare all the legal documents accordingly.

Before you Buy an Investment Property…!

Investing in Real Estate is a great way to create income.  Of course, you can make plenty of money but you can also loose money if you are not very careful.   When considering a purchase, consider all the costs associated with that purchase and owning that property.   And always add a buffer.  Guess low on profit and high on costs.

  1. Cost of the property
  2. Cost of financing
  3. Reoccurring expenses  (Mortgage, Utilities, Insurance, Association Fees, Assessments and Property Taxes)
  4. Repairs, Maintenance and Remodeling expense (Interior and Exterior).
  5. Advertising for Tenants
  6. Accounting (Capital Gains, Bookkeeping)
  7. Expenses to resale if that is what you plan to do.

Financial Planning is the key to a successful Investment.

Opinion of Value. Have an  experienced Agent or Appraiser provide you with an Opinion of Value or Appraisal.  Be pro-active!  Review any information that they provide you and do get  a second or third opinion.   Don’t worry about hurting anyones feelings.  This is your investment only if you do this right.

Complete a Home Inspection.  Know what you are Buying Inside and Out.  A thorough home inspection should be completed.  Obtain a total cost to make any and all repairs and improvements.

Accounting.  Create a spreadsheet with all of your estimated costs.  Create a duplicate to include your actual costs so your can compare.  The first investment is usually not a profitable one for most.  Most chalk it up as a good learning experience.

It pays to have an Experienced Real Estate Agent as a part of your team.  He/She can help you find the right properties to purchase and can provide you with a wealth of information being a very valuable part of your transactions.  I have helped many people become Investors and I would love to assist you also.

Be a smart investor and follow the rules.  Do not Buy based on emotion.  If the numbers do not work.  Don’t walk away….RUN!

Investing in real estate can be very rewarding. Every piece of real estate including your home is a part of your portfolio.

If you think you would like to become an investor you need to start interviewing.  Yes, that is right!  You need to have a team of professionals that can help you make decisions.  The right decisions.   A good Team Member will be a great asset and will save you a lot of time and money.  The wrong Team Member will not be on your Team but will still have cost you.   I think you got the picture.   Be careful in the selection of your team.  Choose Members based on Knowledge, Experience and Proven Results (Honest Reviews).  Referrals are Nice.

Who do you need on your team you ask?

Let’s start with choosing a Lender.  Unless you have cash to purchase and remodel you will need to borrow.  Even if you have cash, sometimes it is cheaper to spend someone else money.  Do the math before you make your decision.    A good Lender  will explain financial options and should have recommendations to assist you.  Ask lots of questions.  Remember when you are budgeting a project to include financing costs.   Interview several Lenders before you choose.

You will need a Real Estate Agent also.  If you find a good Agent… this could be your Golden Nugget.  An eager Agent will work aggressively to find you properties to purchase.  They can also assist you in valuing real estate providing you with a current value and a remodeled value to assist you in your decision on whether a property is a wise purchase or not.   Your Agent should be able to offer valuable recommendations, be verse in real estate offer and document preparation and  have excellent negotiation and closing skills.  A good Agent can save you thousands and open doors of investment opportunities.

A Title Company / Attorney will complete the title work and assist with the closing of your transactions.  If you stick with one company then they typically provide you with a discount.  Building relationships is very important.  Call around and talk with several asking them about title and closing costs.  You will need all of these fees when you Budget your project anyway.  If you are using a Lender then they will have a list of Title Companies they use and the fees are a part of your closing costs.  Again, building relationships can save money.

Remodeling can take a lot of different professionals to make it all come together.  So start making a list of Electricians, plumbers, roofers…and more.  Your list will start to grow and always be on the look out for another team member.

I hope this gets you started in the right direction.  I am always available to answer questions so don’t hesitate to reach out to me or one of my team members.  We would love to be your Agent.

Remember,  Buy Low…Sell High.

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