In this article we will focus on two types of investments: rentals and flipping. Getting into real estate investing is that it is a get rich slow process, not get rich quick. Follow the following steps to ensure a successful investment experience.
- Decide what type of investor you want to be, one that gets in and gets out or one that invests over the long term.
- Determine how much house you qualify for. This means checking your credit score and getting pre-qualified for a mortgage with a qualified mortgage broker.
- If you are investing in a rental property then you must think about positive cash flow; what number is going to be realistic for your market but will pay down your mortgage AND net you a profit each month?
- You’ll need to factor in potential repairs and vacancy carrying costs (when your property is vacant) when you calculate this number.
- If you’re into the flipping business (buying and reselling quickly, often after remodeling) then you need to determine how much return on your investment you want to receive.
- This number will determine how much you pay for a house, how much you invest in repairs, how long you can carry the mortgage cost during the renovation and selling period and what price you sell the house for.
- With the help of an experienced real estate agent, determine the best area with homes within your price range.
- Find homes (preferably priced below market value) and make an offer.
- Get a good lawyer that specializes in real estate.
- Be sure to have all inspections done and be present for them.
If you follow these tips then you will be on your way to making a solid investment.