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Last Updated: May 14th, 2012 - 22:24:01 |
The question: is buying investment properties something that can benefit you? The answer: Do you want to net $40,000 to $100,000 in a few months, with minimal work?
Investment real estate is quickly appreciating in most neighborhoods throughout the US and even worldwide. So, what are the basic steps that you need to know to make a success at buying your real estate investment. Florida mortgage and investment real estate expert Donald Gomez has the answers for you.
1) Choose your real estate investment strategy early: renovation, flip, or long-term investment rental. Does your budget permit you to shop for an undervalued investment home, hold on to it, and then turn around and flip it in a few months? Do you know the steps needed for effectively remodeling homes? Will you be dealing with renters? If so, make sure that the rent pays your home mortgage to give an immediate profit.
2) Next, execute your real estate investment strategy. To do flipping: Just buy and wait until your local market offers your target price. Or, to do home remodeling: Make sure that you are working with an experienced crew to complete your project on time. Once your project is done, do the comps again on investment property in that neighborhood per square foot. These comparables will give you your new suggested sales price.
On the other hand, your real estate investment strategy may be to keep the investment property as a rental. Quickly hang your “For Rent” sign. Include your mobile phone number boldly on the sign. Ask your real estate lawyer for the lease agreement contracts, or your realtor. Finally, have potential renters fill out a basic application.
3) When buying for flipping, interview each real estate franchise. Never waste time looking at an investment home chosen by a realtor who is not investment-focused. The typical realtor will not know the basic numbers that you will need on each investment property. You might quickly learn these numbers, by researching in an investment real estate forum online such as at www.onlinerealtysales.com/p/forums.
4) Interview each mortgage broker. After finding a realtor, you might ask for three mortgage brokers that the realtor recommends. Then, check out if the mortgage brokerage is more qualified than your local credit union or bank. Find out each ones offer on mortgage rates and closing costs. Also, bring your three credit agency reports, along with any sample investment home in your price range to run the numbers.
5) Next, put contract offers on the cheapest investment home in your best neighborhood. For example, say the cheapest three-bedroom investment home in your best neighborhood in the Texas mortgage market costs $150,000 and your next cheapest, comparable investment home goes for $190,000. You might wisely buy the investment home at $150,000 and raise the price to $180,000 the next day to make a nice profit.
6) Immediately, contract to close. After your investment home inspections and appraisal, you will know the cost to renovate the house. Next, a Purchase and Renovate home loan might help you wrap the cost of remodeling a home in the home improvement financing so that you have few costs paid from your cash. Always get a home improvement contracts’ estimate from your general contractor and get exterior and interior remodeling plans from your architect. Upon final approval of your mortgage loan, you should then close the deal on the house in about 30 days.
The six steps are the basics, but they display that buying and selling investment properties is easy. Remember that with good credit, you might get the best mortgage rate on a home loan offering 100% of your home costs.
Thus, once you understand the investment real estate business and its steps, and once you are motivated with resources; then you can start wheeling and dealing in money.
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