WHAT DO YOU WANT TO ACHIEVE AS A REAL ESTATE INVESTOR?
The answer to this question really all depends upon where you want to end up in the next 5 or 10 years with your investments. Often, people just starting off in real estate investing haven’t got a clear picture of what they want to accomplish. For some, the idea is to create a retirement income. Others dream of becoming financially independent. Keep in mind that building up a solid rental income takes time and one property probably isn’t always enough.
WHAT IS YOUR INVESTMENT STRATEGY?
There are several strategies that can be implemented for property investments. The first is a buy and hold technique. This means purchasing a property, doing a minimal amount of work on it and then renting it out for a long period of time. Another technique is to purchase a distressed property or a fix and flip. In this case, you must completely renovate it and then sell it for a profit. You must determine which one best suits your skill level and which will help you reach your long-term investment goals.
FUNDING THE INVESTMENT
If you’ve got cash reserves, you may be tempted to put that money into purchasing and remodeling in order to avoid debt. One of the drawbacks to this type of funding method is that you could lose everything. Taking out a mortgage with the idea that you’ll always have a renter in place to cover the payment may not be the best idea either. Another option is a hard money loan, which is much easier and faster to obtain than traditional bank loans. Private lenders who offer hard money loans can often times get you better funding on an investment property without all the paperwork of a conventional loan.