Winning Ideas For Real Estate Investing

While investing in real estate can seem difficult, it can be made much easier as you figure out the best strategies. If you’re someone that’s new to this or if you have experience, this article will teach you what you need to know. After all, there’s always more to learn when it comes to real estate.

Stick to your budget

Be careful not to overextend in terms of buying property. Real estate investing is very exciting, and sometimes it can get the better of you. You may bite off more than you can fiscally chew. Know your numbers and your budgets and stick with them. Even if it seems like an easy flip, don’t go past your budget!

Consider management

Be sure to taking into account the amount of time you can realistically devote to managing property. The issues tenants have can become time consuming. Between late rent, property damage, and maintenance requests, you may be left with less time than you expected. If you don’t have ample time to manage, consider hiring a property manager to do it for you. If you are curious about the benefits of hiring a property manager, check out our guide on why property management might be worth the money.

Location, location, location

Location is paramount when considering a real estate purchase. The proximity to great areas will increase the value more than you might expect. Be sure to consider the location and if there is adequate work in the area you wish to purchase a house. After all, jobs are one of the biggest drives in renting/purchasing real estate.

Your image matters

Reputation is immensely important in the investing world. Therefore, always tell the truth and try not to make any enemies. Most importantly, follow through on what you say you are going to do. If you are not sure if you can do something, do not make the claim in the first place. Your reputation could suffer and affect your business as a result.

Be Patient

Know that it will probably take some time before you start seeing any gains. You must ensure you’ve got some money. You must be gainfully employed to start. It is very common for unforeseen expenses to come up at any time throughout the purchasing process and future managing process. If your income is not sufficient, it is likely you will go under.

Get organized

Have a business account, and stick to using it. If you invest too much of your personal money in a property, you could lose money. This might leave you short on funds to pay your bills or take care of personal needs. Treat this like a business so you don’t risk losing it all.

Compare

To make sure you buy a good piece of real estate, find out what similar properties have sold for. This will give you a good idea of whether a property you’re considering is worth the price you’re about to pay for it. There are public databases about recent sales, or you can ask a real estate agent to help.

Partner up carefully

If you are bringing in a real estate partner to invest with, think about what a non resource loan would cost. These loans offer good protection in case the other party becomes irresponsible, or if problems in the partnership make it untenable. This will give you greater freedom to profit with less risk than traditional partnerships and loans.

Learn from your mistakes

If you’ve lost money on an investment, take the time afterwards to understand why it happened. Look at your books and see where you went over-budget. Think about the things that you could have done differently to keep the numbers in check. Since big money is involved here, you need to learn as much as you can from your own mistakes.

There are people that gain a lot of money in real estate. Now that you have the basics down, you will surely be successful at it. Don’t get too scared of this and be held back by that fear. Just learn what you can and you’ll see the money come in. Be sure to let your friends and relations know about the great information presented here.

Read More

What Is an FHA Loan?

The advent of the FHA loan has converted visions of home ownership into reality for those who never thought it was possible. While the FHA loan isn’t a one-size-fits-all solution for everybody, there are some things about it that make it great and unique. FHA loans allow a buyer to make a down payment of as low as 3.5% with less-than-great-credit. With the FHA 203k program, buyers can also receive extra funding for repairs and renovations. Lastly, the down payment for an FHA loan can be a gift. All of these factors make the FHA loan a truly unique opportunity for first-time homebuyers to make their dreams a reality.

History

FHA loans can be issued by approved private lenders like banks and credit unions. The FHA (Federal Housing Administration) backs the loan, giving lenders the confidence to approve some otherwise unfit loan applications. The Federal Housing Administration is a government agency founded in 1934 in the middle of the Great Depression, when housing markets were at an all-time low. Since its creation, the FHA has backed millions of loans, making it the largest mortgage insurer in the world. Contrary to popular belief, FHA loans aren’t just for first-time homebuyers. However, you can only have one outstanding FHA loan at a time.

Do I qualify?

FHA loans are a great fit for some individuals. With very little money down, the option of paying the down payment with a gift, help with improvements, and no prepayment penalty, this loan seems like a little too good to be true. However, FHA loans are even easier to qualify for than conventional loans. With government backing, lenders are more willing to approve potential homeowners of all income levels.

FHA loans do not have an income limit. However, you do need a reasonable debt-to-income ratio to qualify. Usually, you should aim for a rate lower than 31/43. For example, if you make $3,500 a month, your house payment needs to be below $1,225. Online tools can help you calculate your average house payment so you can see if you’d qualify.

First Steps

First, consider some of the downsides to using an FHA loan. You will have to pay mortgage insurance at 1.75%, along with a monthly fee that depends on your personal loan risk. You can expect this to be an additional 1% a month. Also prepare to pay a higher interest rate than you would with a conventional loan, or the same. In addition, consider that FHA loans have limits, and if you’re looking to buy a more expensive property, you may not be able to swing it with an FHA loan. If you are still on board, it’s time to jump in!

The best way to start your journey into the world of FHA loans is to talk with a FHA-approved loan officer. These professionals will be able to lead you in the right direction and discuss different options with you if you don’t qualify for an FHA loan for any reason. They will give you a list of everything you need to get started.

It’s worth a shot

Talk to an FHA-approved lender to see if you might qualify for an FHA loan. You may be surprised! Experts encourage that buyers shop around and compare offers from several different sources, FHA and conventional. After approval (or before), talk to our experts here at CDA Real Estate Investment and Property Management to discuss exactly what type of home you want. We have access to the latest and greatest FHA-approved properties. We can help assist you every step of the way. Your dreams of owning a home may be much closer than you think!

Read More