What do I need to know about buying an investment property?

Hello Margaret, I would suggest that you attend local real estate investor groups and read as much material as possible regarding investing. One of my favorite books to have my investors read before they really get started is BRRRR by David Green. It breaks down how you can accelerate your buy and hold strategy in real estate investing. Additionally, I would suggest that you find out what type of real estate investing is comfortable for you. For example, I like flipping and the Brrrr strategy best, but I am not a fan of looking into notes or hard money.

Hi Margaret, congrats on making this step in investing! It can sometimes take people several years from the time a decision to invest is made to the time the investment purchase actually happens, be patient with yourself. FIrst step is to discuss this with a lender, if you are thinking a single family or condo or a building under 4 units, a mortgage broker you normally have worked with may help you. If you are thinking more than 5 units or properties with a retail element to them, you will need a more specialized lender. As in most things, when you develop a niche you will have more success as you have more knowledge within your niche, you may find yours by accident or you can choose to have it by design. A nitch can be by location, by building style, by clientele, by price-point and any combination of that and likely a few more. I find that a location niche is easier to manage when you have multiple properties.

First, you have to look at an investment property as a business. If you simply take money from the business and never put any back in with maintenance etc. the business will fail. I work with investors often and buying the right property means many different things in the Myrtle Beach area. We have seasonal rentals, daily rentals, and yearly rentals. We have single family homes, condos, condotels, townhomes etc. Finding the right agent that understands HOA fees, location, and what mortgage companies to use can be tricky. The best advice I can give is, read, read, read.

Margaret, This guys left you a lot to think about in a short note. They are all correct and give good points but it could be overwhelming. Look for someone with experience in your circle and have a conversation.

You must have the following Pre-approval if seeking a loan. Term of investment time horizon less than 1 year or long term 1 yr or more. Active or passive involvement as an owner. What rate of return is your expectation? Cap rate, ROI (Return on Investment), ROC (Return on Cash), Debt Paydown percentage, Appreciation percentage. What sector, Single Family, multi-family, commercial, land, Short term rental, condos, professional medical Condos), RV parks, storage, industrial, Land speculation or Land leasing, joint ventures, retail, office etc.

First off speak with a lender and find out your comfortable buying power. Research the area and find out where has the highest ROI and/or growth potential. For example in Albany NY there are certain areas where you have multiple options with tenants. There is an Airbnb market, Student rentals, Travel Medical professionals and more. Plus it is an area that is expected to continue rising in prices due to man factors. One of them is the expansions of certain big companies. The main thing is to make sure you can recieve enough rent to cover your mortgage and some. Many mention a Cap rate of 5-10% is a good investment. I recommend following Bigger Pockets. There are different investment strategies and it depends on which route you want to take. We would have to have a conversation to dive deeper into it. Feel free to reach out.

Buying an investment property is a big decision and can be a great way to increase your financial portfolio. From an ownership perspective, it’s important to research the area thoroughly before buying as prices and rental demand can vary greatly by location. You’ll also need to consider the cost of ongoing maintenance, insurance and repairs. On the financial side, you’ll want to make sure you have the necessary capital or financing in place before embarking on an investment property purchase. It’s also wise to speak with a qualified financial advisor who can help you determine whether or not an investment property is right for you and plan out strategies for making your purchase as profitable as possible.

Many many things. From a financial perspective it is very much about generating passive income. You will want to develop a strategy to incorporate equity growth, cash flow, and tax savings. The financial strategy will be custom to your income goals and situation whereas the ownership and management of the property will be specific to your geographic situation and education. When you are starting out with investment homes it is important to get advise from someone who is personally doing what you want to do. My wife and I own several in state and out of state rental properties. Our goals are to generate enough passive income to retire and use key points in our ownership to do 1031 tax exchanges to increase the amount of rental homes and cash flow. If you are interested in acquiring rental homes I suggest a phone strategy session to layout a personalized game plan before moving on anything with lenders or real estate agents. Feel free to give us a call if you would like us to show you what we are personally doing.

Hi Margaret, What kind of investment property? A home rental, Assisted Living Facility, a commercial property? When it comes to building a rental portfolio or investing in a business there are different aspects to consider. You may want to do a DSCR loan where the current income on the property is used to qualify you for the loan. Or a SBA loan if you are considering running a business. Some folks want to keep their property separate in an LLC for liability you would want to talk to a tax professional about that.