You meet Sam. Sam is a real estate investor, he tells you all about how much money he is making off of his last real estate investment or maybe you just watched some house flipping on TV. So you decide to jump on the bandwagon and become a real estate investor.
What Sam didn’t tell you is first find the right financing. If this is your first buy you are probably not paying cash. Shop around with different banks to find the best loan that works for your budget and investment plan. Pay attention to how much you have to put down and the interest rates.
Don’t think for one-second that you can turn the property around with just a little elbow grease or a few nails. Sure you might be an expert window installer or tile setter. Do you know how to fix the rotten roof or fix the cracked foundation also? If so that is great but keep in mind if it doesn’t pass inspection there will be delays on getting it back on the market or may cost more money in the long run. Don’t be afraid to hire experts when they are needed.
Last but not least do your homework. Research the neighborhood. Find out what schools are there. Is the crime rate low? What are the current rental rates for something similar? Will that be enough to cover your mortgage and then some?