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| Your First Real Estate Investments |
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A self-proclaimed investor was bragging at a party about being a real estate investor. He spoke with much enthusiasm about his cash flow on the one property he owned with a partner. After some interesting discussions about investment strategies, he revealed that he didn’t own the home where he lived and it quickly became obvious this guy was no true investor. True real estate investors start their careers by owning their own home.
The goals you set for investments will determine how and what you do. "I want to get rich" or "I want to be an investor" are not true goals and aren't very good motivators when times get tough. An investment goal should be definite and do-able. Once you've set your realistic goal, you must define how you plan to reach your goal. Your strategy should be guided by a realistic picture of your life, skills, and risk tolerance. You should also consider, as in any other business venture, who you want to target as customers. Obviously fair housing laws prevent you from discriminating on age, sex, national origin etc…but you will want to think about the availability of customers (tenants) and how you plan to reach them.
Your current financial situation will impact a large portion of the strategy execution. If your goal is to purchase multiple properties, your home should allow you to cover your bills and save money every month. 100% investor loans are non-existent these days. However, you can get 100% financing on your home through some regional banks like BB&T. Once you own your home, a minimum of 20% down payment is needed to purchase a property as an investor. When buying an investment property, make sure you have the financial capability to purchase property and carry the extra mortgages for at least 6 months without renting the property out. Once you know what you want to do and how you want to do it, you must decide where you are going to do it. You must learn where and why things are happening. You also need to know rental rates, available properties, sales histories, and neighborhood dynamics. You might want to look at the police crime map in your research as well to get an idea of the area you’re exploring. Finally, you should know the plans, if any, for changes to the areas you are considering to invest. The research you conduct is central to the execution of a well planned strategy. Lastly, it is important in any new endeavor to talk to people who have done what you want to do. Having someone who is experienced that you can bounce ideas off of will give you a better picture of what you are getting yourself into. It is important that the person you seek counsel from to be experienced in getting starting in real estate. For more info about getting started in real estate investing, contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it or call 704-965-2535. |
