Investor – Is The Right Time, Now?
Investor, Is now the time to find the best Real Estate deals? Flippers, are you able to buy, with selling in mind? With some stability in the market place after a busy summer season it may just be the right time to look for that investment property. The summer season saw homes under contract on the day they launched, with the Sellers getting multiple offers and quick uncomplicated sales. Now we are seeing the “cooling off ” period with left over homes from summer sitting on the market. Could this be the time to buy right?
There are many factors to consider and each person’s individual long and short term goals, as well as their risk tolerance differ. As a real estate agent, it’s my job to go over all the factors and help the investor make the best decision to suit their needs.
Considering Your Investment
Whether you are a seasoned investor or not, these are some of the items that need to be clarified and considered before you go buy.
- First you have to evaluate your buying power.
- How much cash do you have to put down?
- Lenders may want to see at least a 20% downpayment for a non-owner occupied property.
- Get pre-approved and find out exactly how much you can buy for.
- Is there equity in your existing mortgage that you could use to purchase an investment?
Building Your Portfolio
If you are a new investor and you have never owned before, buy something affordable, live in it for two years and then turn it into a rental and buy something else. Keep doing that and grow your portfolio and your wealth. The answer to a great investment is in the buying – if you buy right, you can sell right.
- How much of a risk are you prepared to take?
- Is your down payment all your liquid cash?
- Are you going to stress over investing all your not knowing how long it may be before you can liquidate the asset and possibly move on to the next?
- How close are you to retirement?
- How does investing fit into your personal budget and lifestyle?
Investor, Are You Ready?
The new Investor may get excited about buying and when a market cools down and the seasons change it can be the perfect opportunity to purchase that bargain. Investor, If you purchase that property and you aren’t ready financially, you could be stretching your finances, even your retirement to the max. How would that affect your lifestyle? What happens if your tenant should skip on the rent and you need to pay the mortgage – would you be comfortable with that for a month, or two or three?
It Takes Patience
Not every home that has been on the market for a long time will be a good investment. Not every foreclosure, short sale or FSBO is a great deal. It takes a lot of patience to find the right property. Skill and market knowledge are high on the list to find the right investment.
Do The Numbers Work?
Investor, do your homework. Once your monthly mortgage and property expenses are paid, are you going to break even? No? If not, how many years before you will break even? Can you carry the investment financially or not? Is it the right investment for you? If the rental income can grow in a short period of time, it could be worth the risk.
Of course there are other factors to consider. If there are good schools, great neighborhoods, up and coming demand for the area, and few properties available, then it could be a great investment.
Understand The Real Estate Market
Before jumping into a purchase, take the time to understand the market. Don’t rely on random information to make big financial decisions. Sign up with an experienced agent to find out about property trends in the areas you are considering. Get setup on a listing alert, so that you know when new properties that meet your criteria come onto the market. This will help you understand the market really well and help you find the right investment property.
Monitor the Rental Market
Create a spreadsheet of the rental properties for various areas that could be your target market. Its good to become accustomed to the rental values – they are important when doing your numbers. Remember the neighborhoods that are in high demand. Note what features the homes that rent for the highest figures have. For the investor, these factors may influence your property purchase.
Flipping a Property
Flipping a property is a whole different ball game. It takes great skill and wide range of knowledge as well as a higher tolerance for risk and capital outlay. If you plan to rehab the property yourself, be sure of your costs and repairs. You need to have vision and then a plan going forward. Whatever your time period allocated, add more time. The same goes for the budget. It is easy to blow the budget – keep the end in sight. You really have to know your numbers and understand the market. Flipping is not for the faint hearted.
As an investor considering a real estate investment – this may just be the right time.
It does not matter whether you are an investor or a flipper. I look forward to working with you and to discuss your goals. Give me a call 704-975-4651 or email Michael@MGaddy.com I have the experience and the eye for a great deal. Let me help you with the knowledge and expertise.
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