I bought my first home at age 20! The process hasn’t changed all that much since then. Honestly, Real Estate Investing is something many people can do and SHOULD do!
Especially if you know what you are looking for, how much you can spend and being able to make a profit from it.Whether you resell it by “Flipping a home” (remodeling it) or renting it out. Here are some tips to help you with buying your first investment home:
1. Create a list of must-haves, wants, and would-likes. If a specific location is a must, make sure that is right at the top of your list. Make sure you carefully consider wants and needs.
2. Be prepared to compromise. You may have to let go of something you wanted. That is not the end of the world. Talk through your options and keep communication open during the entire process.
3. Know your credit score. This can be a huge factor in getting approved for a mortgage. In some cases a better credit score will be a factor in your interest rate and the down payment required. Get Pre-Qualified for a mortgage!!! ALWAYS!! This tells you what you CAN afford. You can make an offer if the right investment property comes up.
4. Factor in closing & Real State Agency fees. Closing costs can hit souring amounts. It can get expensive! Very expensive. Talk to the bank you are working with and get a soft quote on the expenses. A lot of the cost will depend on the type of loan you are going with.
5. Talk to others in your area that have been through the home investing/buying process. Find a connected investors review! Often times word of mouth is the best way to find a really good realtor. Once you find one you feel comfortable with, and let them know everything you are looking for and what your price range is. They will be able to help you find contenders and set up showings. You want someone who will work for you and with you!
6. Once you decided on a house, made an offer and the offer was accepted; having a home inspection done is a great idea. Make sure you include it when you make an offer; simply stating that it is contingent on the home passing an inspection. This will cost you approx. 300-600 dollars, but is well worth it. This professional home inspector will look for any major problems in the home. Often times if something is found, for example the home needs a new roof, the home owners can be asked to make the repair before the sale goes through, or you can use it to lower the selling price and have the work done yourself. If worse comes to worse, it gives you the option to walk away from the deal.