donlide question : What is the first step to invest in real estate ?
I have read many books and now a little lost where to start. Should I try or financing first home an investment property? Mobile home, single family or multi? ? I have to build a team / network, to work with me Best Answer:
Reply from
go_lc_bears
Seek first property. I would recommend a multi-device <5 units. 5 years and more than Clasification commercial and is more difficult to finance. 2-4 provide more income than a house. Once a property that interests you, then figure how much are you willing to pay, and then to work on the financing options. With suppliers in the financing! Most of the buildings of two to four units are held by investors and they may be willing to help you pay part or all of the money Good luck Go_LC_Bears@yahoo.comEdit.! The reason I recommend finding a first place is if you are a seller, how much to tell you afford to, they can try to sell you something as close as possible to receive the higher commission. If they do not want to waste their time, they will work with you to the real estate financing.
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The first step is to look at the relationship between prices, rents, and interest rates. Take the rent and multiply it times 12; this will give you your annual rental income. Then take this income and divide it by purchase price; this will be your property’s annual yield. Now compare this yield to the interest rate that you are likely to get on financing; the yield should be SUBSTANTIALLY higher than the interest rate (your simple yield calculation ignores vacancy, maintenance, and fluctuation of rent over time).
Make sure you buy 2-4 units to start with. It will be easier to get a loan if they know you will have income coming in.
1. Decide what exactly do you want financially – positive cash flow / positive gearing / negative gearing / capital gain.
2. Decide what you budget is. Get loam pre-approval from the bank or broker.
3. Decide on the area / state where you can potentially get your targeted property for your approved price. Look for population, developments in the area, employment, schools (I’m sure one of your book will have a checklist)
4. Search for property – internet, papers, visit realtor’s offices, inspect properties. See as many properties as you can. Collect the figures on rent, rates
5. Shortcut to few properties that can fit your requirements. Make written offer (cut the asking price down), then negotiate the price.
6. If you don’t have much experience – go see your accountant for check the numbers and whether the property will really perform as well as you think (eg. will it really be a [positive cash flow and how much will you earn)
7. If the unswear yes – go back the real estate agent, get the contact, go se you solicitor, banker and do all paper work… This is usually the easy part as you just sign the papers and they do the rest. Use independent solicitors / brokers, not those advised by the real estate
8. Woala! You got your investment property! Not go get the rental agent and rent it out.
Good luck!
I disagree with all the post above . The first thing to do is find out what you can afford . There no use waisting anyone time if you have no money or credit . The easiest way ( financing ) to buy a house and move in it . Move out when you can afford your next house and rent the first house out . Most traditional bank require a min of 10 % down and most of the time 20% down . You can get financing with a higher rate with less money down . I bought most of my houses when va foreclosure where around . Anyway good luck with it
And I disagree with the above two post!
The first thing is to define what your investing goals are. Long term? Short term? What are you trying to accomplish? etc.
Then you assemble a team of people or a network of people who can help you achieve your goals.
Trust me, if you find a good deal in whatever you’re doing, the money will be easy to find. I personally have access to a lot of private money I can tap into to finance my deals if need be. I didn’t have to run my credit, apply for a loan or use my own money.
Regards