In the real estate investment world, there are many paths you can take. Luck is the intersection of action and opportunity, and you need to be prepared to take action when a great opportunity comes along — and to recognize that opportunity. Interest rates are at an all time low at the time of this writing, and markets are changing rapidly. See below for my best strategies that new investors need to take in order to seize the moment.
Educate yourself. Read everything: books, articles, blog posts 😉 and interview people with investment experience. Hire an expert, tour properties, drive around neighborhoods. Most importantly, study and learn your market.
Decide whether you want to move into your property or buy it solely as an investment. If you plan to live in your first investment, then you can put down as low as 3% on a conventional loan. If you don’t plan to move in, then you’ll need a whopping 20%. I moved into my first investment property, so I could save my liquid funds for renovation costs.
Define your investment goals. This step is very important because there are lots of options as a first time real investor. Capital was a defining factor in my investment strategy.
Connect with a lender to find out what is possible financially. Meeting with a lender may show you that you need to save more or do your taxes differently. As a 1099 independent contractor, the lender will take an average of your income over two years! Planning and strategizing now can be helpful in reaching your long term goals.
Open a high yield savings account and label it investment property. That’s what I call motivation baby! Know what you can save every month and treat that money like it doesn’t exist. If you’re ready to rock financially, go to step 6.
Hire an experienced agent who thinks outside the box to help you locate and negotiate your investment property. Did you know hiring a buyers agent is free to the buyer? The seller pays both the buyers agent and seller agents commission.
Know your numbers and what type of investment is right for you. Spreadsheets will become your best friend! The way you evaluate a property is going to be completely different depending on whether your investment is a quick flip, a rental, a 2-5 year flip, or a long term investment. A clear direction on your investment goals is absolutely essential to this process.
Happy investing my friends!