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Last Updated: May 14th, 2012 - 22:24:01 |
When dashing out to buy Investment Property do not be in such a rush that you invest in “FOOL’S GOLD.” Fool’s Gold has had many enthusiastic prospectors unearth these nuggets of the right color and luster only to find it to discover that they have wasted tons of money and time digging up pyrite, or fool’s gold. This same malady befalls many inexperienced, and occasionally experienced, investors.
A new potential buyer of investment real estate wants so badly to “get started.” One may work hard to find that deal, and often is under demands from friends and family. He might not recognize how to differentiate the appearance of each land investment, just like that treasured metal. Like buying land for gold prospecting, a simple test can be made of investment property to determine if you should buy or not. But the test costs.
First, when considering buying investment properties you must establish your goals. When you cannot pay some bills and lack reserves, should never buy a mortgage investment simply for tax shelter, especially if it does not generate a substantial monthly income. Just as the location of the gold has to be determined, either by the surface or further underground, so too a mortgage brokerage can help you examine your financial resources. But don not let them mortgage your future.
Educate yourself. In today’s current broker mortgage market with the low mortgage rates, it is achievable to take advantage using secured loans and so many borrow more money than is prudent thus indebting their personal residence . If you want to draw cash out of the home in a refinance home mortgage to purchase that first income property, make certain that your deal makes sense by having sufficient funds to make payments on your property in case unanticipated vacancy or unforeseen home remodeling is needed. Be wary of people that want to use your credit. Your goal as an investor is to become debt free. If offered a joint venture or partnership, check out those people and their deal.
Okay, your home financing is good. Next, before you find that real estate investment, you must know how to do the “Fool’s Gold” test. By scratching the nugget on the back of a white ceramic tile, “Fool’s Gold” will leave a greenish-black streak; a golden-yellow streak reveals the glitter of real gold. The test to perform for investment properties is called the “COMPS,” or comparables.
Suppose, while searching real estate leads, someone brings you a purchase sent from that seller who wants, next to retail price. When “Testing” real estate leads, learn to pull your own comps. Make friends at a local commercial real estate brokerage who will help teach you to accomplish your own homework for yourself. After pulling those comps yourself, establish your own home improvement design list and set your own prices for home improvement contracts for say remodeling a home.
If you have inappropriate office ordering skills and s cannot be taught by a mortgage broker, do not involve yourself in a major home remodeling job for a first project. If other people do provide the comps, always check them out. Recently I analyzed a deal, where the comps seemed too good to believe. We rode through the neighborhood; and we found the sales in the actual neighborhood to be much lower than those comps. When we looked at the sales closer; low and behold, we found that those sales were for vacant, boarded up, and foreclosures. Not all that glitters is gold.
Once again, you must keep your vision of the home improvement cost clear and do your own legwork, probing Comps, not getting your eye clouded by golden dreams, which become fool’s gold. There are viable financing home improvement deals out there.
If you investigate the amount of local commercial mortgage leads and the investors, including part-timers, who make their living investing in remodeling homes, we see that they are steadily accumulating for their retirement. This proves that the home improvement industry or any investment home business is a viable opportunity.
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