Buying Investment Property should never be an emotional decision. That’s why we’ve shown you the investment property calculator. If after plugging the information into the calculator, the ROIs look favorable, then, you should consider purchasing the property. You should work with a seasoned real estate agent who understands all that is necessary to purchase an Investment Property such as current market conditions, current market rents, etc. He or She will help you through the process of obtaining the perspective property by helping with the following:
It’s important to pay the right price for the property–and that doesn’t always mean the market price with an investment property. Your best bet will be to buy wholesale instead of retail. An investment real estate agent can birdog wholesale properties for you such that you are buying smart from the begining. In real estate investing, your money is always made when you PURCHASE the property!
In today’s market, conventional loans will require 20-25% down. So it would be prudent to find several mortgage companies to get Good Faith Estimates (GFEs) for investment property mortgages. Scrutinize all the fees and look at the closing costs for the loans to find the one with best terms and lowest costs.
Creative loans are ones that may use retirement monies for purchasing investment properties held as a retirement account asset. Or they may be hard money-short term loans from private lenders that could be used for down payment assistance, etc.
Inspections are a must and you should use reputable inspectors that will go over every square inch of the property. You don’t want any surprises after closing.
Appraisals are necessary for securing conventional mortgages and for possible refinancing in the future.
There are other types of real estate investments like REITS (Real Estate Investment Trusts) that are traded on the stock exchanges. These are large groups of similar properties held by a managing or investment company that you purchase shares in. These can yield a nice return on investment through appreciation and dividends.
And to tie all this together you may consider some type of asset protection plan as a way to limit liability exposure. For example, Limited Liability Corporations or LLCs can offer a layer of protection from unforeseen problems.
Buying Investment Property starts with negotiating a purchase price.
