THAIFLOWERS

Archive for the ‘Investing’ Category

Traditionally, the big, long-term wealth increase available to real estate investors is to heavily leverage the purchase of property that is in turn rented out to cover the mortgage payments. As the principal debt is paid down by your renters and the property market value rises up, you accrue equity wealth. Once the debt is paid off, you both have full equity in the property and profit from the rental payments as they come in, minus only upkeep, management, and tax expenses on the property.

Real estate investing has many different facets. There is investing for the long term, the short term and our secret real estate niche.

By long term, we normally think of holding an investment and then renting it out. Most purchases for the long term are made using leverage, a small down payment and the balance covered with a mortgage. The monthly rent should cover the mortgage payments, taxes, insurance and repairs and eventually pay down or off the balance. A disadvantage is you have the ownership problems of dealing with tenants and toilets.

It may cost you a little up-front money to do so, but I recommend getting an appraisal for your property. You have to verify the value of the properties you are purchasing. Appraising your residential real estate purchases is one way to do that.

One of things I do in my California market is, every time I get an offer accepted, I spend money on a full BPO (Broker’s Price Opinion). I want to make sure that I have correctly figured the value of the property. If I have offered too much money for the property, I want to know this sooner rather than later. Even though that appraisal is going to cost me a couple hundred dollars today, it’s better than making that wrong decision that will cost me a couple thousand dollars tomorrow.

Being in real estate investment business for quiet a long time, I have heard a lot questions about how to get a hard money loan and what the basic criteria are.

These people always talk about their personal background and they basically believe that like other loans, hard money loans are also based upon the individual.

But let me clear this once and for all, that hard money loans are based upon the asset or property you are trying to get a loan for. If you have found a good property, which has all the factors going in its favor, then you will get a hard money loan. No matter what your credit or job history is.