You are running your investment ideas past your financial advisor, and you have done the usual stuff. You have registered to vote, you have three to six months of very good looking bank statements, you have proof of deposit, and you have kept your job because buying your first investment property isn’t something you should do if you are self-employed (because it is more difficult), and now you are thinking about moving forwards. Here are a few tips to help you along.
Get a Good Lawyer
If you are going to become a property investor over the long term, you need to start building a relationship with a good lawyer. You want one that suits your investing style. Are you the sort of person who wants everything checked and double-checked, or are you the sort of person who wants results quickly? Things like settling the mortgage and the purchase becomes far easier if you have a lawyer you can trust and with whom you can easily work.
Work Out Your Payments In Advance
There are tools like the What’s My Payment mortgage calculator that allow you to plan your payments well in advance. It is highly suggested that you use these tools to figure out how much you will have to pay in the future. It is always more than you think, especially if you add in fees, property taxes, payment insurance and home insurance. If you are looking to invest and make a profit, you also need to stress test your mortgage payments, along with planning for them to go up more than you expected.
Digitally Driven Application Processes
One day, all mortgages will be digitally driven. Suffice it to say that digitally driven applications are far easier to run through than the traditional method. This is handy if you are looking to invest several times within the space of a few years. You quickly learn the process, and so can often act more quickly and snap up a few bargain properties when the time is right. Also, as a side note, when you are searching for property, strongly consider going offline to do it. Try to find properties that are not yet on the Internet, or that are difficult to find on the internet. Also, strongly consider looking at properties that have been on the market forever because people start to panic and start taking lower offers.
Don’t Believe The Hype
“You are going to read about several supposedly awesome investing strategies, but none of them are truly home-run hitters”
You are going to read about several supposedly awesome investing strategies, but none of them are truly home-run hitters. You are probably going to be sold on the BRRRR deal because it is the most common mistake of property investors. BRRRR stands for buy, rehab, rent, refinance and repeat, and despite sounding like a great way to invest, it is a late-game method, not a starting method. If you were truly starting out, you would be buying small garage structures and renting them out or flipping them for a profit.
You Need a Framework and Network to Flip Houses
If you are looking to buy houses, renovate them and sell them for a profit, then you are setting yourself up for a very common failure. The only people who are able to pull off this type of investing method are people who already have a network of builders, decorators, roofers, landscapers and so forth. Trying to do it all yourself is both overly time-consuming and very unprofitable. You push the price up by a few grand and then it spends months/years on the market while you slowly lower the price in a desperate attempt to rinse and repeat your process.
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