Don’t feel like you are alone. Everyone who is investing in real estate for the first time is a little bit nervous. Don’t give up before you even start, though. There are some tried and true steps you can take that will help you lose those jitters and get yourself into the real estate market.
First you have to ask yourself a few pertinent questions. The first is, “What do I hope to accomplish by making this investment?” In other words, instead of just thinking that it might be a good idea, sit down and decide your end-goal.
- You need the extra cash flow?
- You are beginning to save toward your child’s college education?
- You need extra money to pay your own mortgage, or debts?
After you decide the “why” of this venture, stay focused on that idea, and that idea only. Real estate investments take plenty of focus, time, and hard work.
Secondly, think about what kind of property you want, can afford, the neighborhood you would like to have the house in, how much rent you can charge, and how much money as a return on your investment you want to make. this step takes much research, hours of surfing the internet, and plenty of legwork.
Everything you accomplished in step two is going to be needed to write your investment plan and goals. Yes, writing this down is essential. You will be needing these guidelines to refer to as you begin the next step which is financing, of course.
The best idea is to hold off on looking for your property until you know how you are going to finance it. One of the ways people are getting their investment money in today’s market is Private Loans. A huge plus for using Private Lenders is that the loans can be funded in a very short amount of time. Often, the investor needs money for improvements to the property, repairs, along with money for the purchasing of the house. As long as the amount being loaned is not larger than 70% of the repaired property, money can be borrowed for the improvements, as well.
What makes this type of loan different from conventional loans is the flexibility they provide. At times, a private money loan is the only option an investor has if the investor himself or the property in which he is investing do not meet conventional loan guidelines.
Finding your property is the fun part, but takes time and legwork, too. You can use online sites, realtors, and the newspaper to find properties that are for sale. There are real estate agents who specialize in helping with investment properties. Go back to step two so that you can explain in detail what kind of property you want.
Once you have found what you want make your offer. Be sure that you adhere to your own outline of what the maximum price should be, why you want the property, and how much money you want to make from your property, and stick to it. It’s better to lose the chance of buying than to buy the wrong thing.
The last step is getting your appraisal of the house, a title agreement, and proof of insurance to draw the documents for closing. The closing can sometimes occur in as soon as a week.
After closing, you won’t be a first-timer ever again.