By William Bronchick, Real Estate Investing Mentor
One thing you don’t want to do is to get in an investment deal that doesn’t turn outright, or at least the way you thought. After all of that work, sweat, and tears of finding a place, the last thing you need is a potential real estate nightmare. Also, having a trusted advisor such as a real estate coach can be invaluable. Here are some things you can do to help yourself steer clear of that:
- Make sure that you have the correct information regarding the property. Don’t rely on the seller or his real estate agent for the accuracy of information. Double-check the square footage with the county website, and make sure the number of bedrooms and baths are consistent with the listing (otherwise there could be an “illegal” bedroom or bath, that is, one built without a permit).
- Do a walkthrough at the property to make sure that it is what you’re looking for. Don’t settle for less than what you want. You will only end up disappointed. It’s ok to have a property with small repairs or upgrades to make for your first time. Further, hire a property inspector to thoroughly inspect the property. He may find things you don’t even know to look for.
- Stay away from the properties that require extensive, unusual repairs (e.g., substantial foundation issues). That can mean you will be paying out lots of money to have stuff repaired and upgraded, or either get a loan for the repair work.
- If you have to get a mortgage loan for the property, make sure that it is one that you can afford to pay back every month. The financing should be acceptable in terms that will fit you. A fixed-rate loan is not always necessary, you can get an adjustable-rate mortgage (“ARM”) but opt for one that has a fixed period (e.g. 5 years) if you plan on reselling it before the fixed period is up.
- Don’t sign paperwork that you don’t understand so you can rush and get your first piece of real estate property. Ask questions so you will know how this will affect you financially down the road. Pay a real estate attorney if necessary to review the documents. If you don’t, you can end up paying more money than you would like to.
In regard to real estate investing, go over everything about the prospective property, the taxes, the loan, and whatever else needs to be included. You want your first piece of real estate property to be something that you can be proud of. You also want to be able to be comfortable in paying the mortgage on it every month until it is paid off.
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