New to Real Estate Investing? Read This First!
If you’re a new real estate investor, you’re probably looking for tips and tricks anywhere you can find them – and this guide is here to help.
New to Real Estate Investing? Check Out This Guide
As a new investor, the first thing you should do is decide what real estate investing strategy works best for you. These are the most common:
- Long-term buy and hold. In this strategy, you purchase a house, make repairs (if necessary), find a tenant and rent out the property for five or more years. You can hang on to the house as long as you’d like (most people hold on to it as long as it’s profitable) and sell it when you’re ready. You may set aside a percentage of your monthly income to invest in the property itself or toward a new investment down the road.
- Short-term buy and hold. In this strategy, you buy a house, make repairs, find a tenant and rent out the property for a shorter period of time – usually less than five years. You then sell the property for a profit and use the proceeds (plus whatever you’ve saved from your rental income) to invest in another real estate property.
- Flipping. In this strategy, you buy a home that needs a little TLC, fix it up, and sell it for a price that’s greater than your original purchase price. This strategy is usually best for people who have the funding to make repairs on a home and who can tolerate the risk of it not selling for as much as they’ve put into it.
After you’ve chosen your investment strategy, these are the steps you need to follow:
- Identify the property type you want
- Brush up your credit
- Find a talented REALTOR®
Here’s a closer look at each.
Real Estate Investing Tip #1: Identify the Property Type You Want
Some people choose to buy a single-family home, while others buy a duplex or triplex so that they can live in one unit and rent out the remaining unit (or units). The type of investment strategy you choose will help you decide what type of property will be best for you. For example, you may want to buy a single-family house in a developing area if you’re trying to flip it.
Real Estate Investing Tip #2: Brush Up Your Credit
If you’re using conventional lending (rather than savings or a different form of financing, such as a hard money lender), you’ll want to brush up your credit as best you can. Conventional lenders want to see at least semi-decent credit scores before they’ll give you the cash to buy a home. (On the other hand, hard money lenders are more likely to be concerned with a property’s value after it’s repaired than they would be with your credit score.)
Real Estate Investing Tip #3: Find a Talented REALTOR
Ideally, you’ll find a Lakewood real estate agent who’s familiar with investment properties and helping you get the best possible deal, whether you’re looking for a single-family home or condo, duplex or triplex. Your REALTOR will be there as you search for properties and when you choose to make an offer. Your REALTOR will also help you negotiate with sellers and stick with you through the closing process and beyond.
Are You Buying or Selling a Home in Lakewood?
If you’re not already living in Lakewood, or if you are but you’re looking for a new home, we’re here to help. Call us right now at 562-882-1581 or start browsing our Lakewood real estate listings to find your dream home today!
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