Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Real Estate Professionals
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 03-04-2008, 04:53 PM
 
Location: Portland, OR
125 posts, read 577,213 times
Reputation: 51

Advertisements

I've been toying with the idea of buying an investment property - perhaps a SFH I can rent out in an up and coming area without a glut of new builds - I am clueless about how to research and start the process - any books I should read about investment properties? What are the good areas (currently and for the foreseeable 4-8 years ) to maybe do this in? What about financing - how much of a downpayment would I need for something like this? Thanks!!!!
Reply With Quote Quick reply to this message

 
Old 03-04-2008, 05:30 PM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,829,799 times
Reputation: 958
Quote:
Originally Posted by tangerinepuddle View Post
I've been toying with the idea of buying an investment property - perhaps a SFH I can rent out in an up and coming area without a glut of new builds - I am clueless about how to research and start the process - any books I should read about investment properties? What are the good areas (currently and for the foreseeable 4-8 years ) to maybe do this in? What about financing - how much of a downpayment would I need for something like this? Thanks!!!!
Although I personally can't recommend any books, I hear that "Rich Dad, Poor Dad" is a pretty good read. I would say that any area that is in a pretty bad slump while maintaining the strong fundamentals of growth would be a good area to look into. Expect to put at least 20% down, and possibly more depending on how cash flow positive you would like your investment to be.
Reply With Quote Quick reply to this message
 
Old 03-04-2008, 06:39 PM
 
Location: Columbia, SC
10,907 posts, read 21,870,313 times
Reputation: 10539
Save your time and money on the books. Hire a real estate agent that understands investment properties. Throw out some terms like "creating cash flow" and "10-31 tax exchanges" to make sure they understand investments.
Reply With Quote Quick reply to this message
 
Old 03-04-2008, 10:59 PM
 
Location: Cary, NC
2,407 posts, read 10,658,327 times
Reputation: 1380
You should talk to a loan officer / broker to find out what financing options are available to you (based on your credit score, income, liquid and hard assets). Figure out how much you can borrow and how much of a down payment is required. Figure out approximately what you will need to pay in closing costs. At least in my area here in NC, the loan guys I talked to in the last month have said that there are not a lot of loan options available at higher than 80 LTV (20% down). You will probably get a better interest rate at 75 LTV (25% down). You might have to creatively finance your project if you have less than that available.

Then, find a real estate agent that specializes in income properties to show you what is on the market. A good agent will be able to tell you market rents and past appreciation rates for particular area and work with your particular investment goals.

Good luck.
Reply With Quote Quick reply to this message
 
Old 03-05-2008, 07:04 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,732,975 times
Reputation: 3876
Quote:
Originally Posted by tangerinepuddle View Post
I've been toying with the idea of buying an investment property - perhaps a SFH I can rent out in an up and coming area without a glut of new builds - I am clueless about how to research and start the process - any books I should read about investment properties? What are the good areas (currently and for the foreseeable 4-8 years ) to maybe do this in? What about financing - how much of a downpayment would I need for something like this? Thanks!!!!
What area are you in? For your first time investing I recommend you stay in your city.

Find a realtor that works with investors and work with him/her. They have access to properties that have not hit the mls. You won't find them anywhere else. You should meet with the realtor in his office so he can explain how he works, and discuss your investment objectives.

The realtor should be able to point you to lenders who work with investment financing.

To make the really fast deals, you will need a hard money lender. The top deals go within hours of becoming available. That means you have to be able to make a decision within a few hours, and commit to the deal, and close within 24/48 hours. It takes experience to be able to do this yourself, or to have a good realtor experienced in investing who can work with you very fast to help you make a decision.

Start small first. If you make a mistake your losses will be minimal. Build up to the larger deals on a slow basis.

Don't expect to read a book and become an investor. It takes a lot of study, knowledge and time, in addition to working with a knowledgeable agent.
Reply With Quote Quick reply to this message
 
Old 03-05-2008, 08:03 AM
 
Location: Just south of Denver since 1989
11,815 posts, read 34,298,326 times
Reputation: 8935
The Millionaire Real Estate Investor by Gary Keller
Reply With Quote Quick reply to this message
 
Old 03-05-2008, 09:17 AM
 
27,206 posts, read 46,568,066 times
Reputation: 15661
Quote:
Originally Posted by Brandon Hoffman View Post
Save your time and money on the books. Hire a real estate agent that understands investment properties. Throw out some terms like "creating cash flow" and "10-31 tax exchanges" to make sure they understand investments.
I just want to add, be carefull because in our area many investors are realtors as well and have gone in foreclosure or short sales, so their experience wasn't the best.
Don't start to invest if you don't have enough money to sing it out if you are not able to rent it out as you had hoped for. Look at the negative financial side and if you know you can overcome the negative financial part, you know you can do it as for the financial part. If you think that you will own it and rent it out right away and it doesn't happen you are setting your self up for trouble, also think you might have to pay for repairs, etc. So be wise and think and rethink before you start. Good Luck, there is money to make if you do it the right way.
Reply With Quote Quick reply to this message
 
Old 03-05-2008, 12:24 PM
 
376 posts, read 1,501,977 times
Reputation: 164
I would meet with a couple different Realtors and Lendors together to review how they work with investors. Realtors will certainly know the best deals but without also looking at financing it is useless. Both of these two professionals should understand what your short term goals are and your long term goals are. It also doesn't hurt to talk with a CPA and/or tax advisor to understand all the benefits.

I would also recommend the The Millionaire Real Estate investor as it does provide you with some good questions to ask and discusses different options.

Here are some questions your Realtor and Lender should be asking:
- What kind of investor do you want to be and why?
- Do you understand the basic investing aspects of leverage, tax savings, etc?
- Are you putting cash down and how much, where is the down coming from?
- Are you only looking for positive cash flow properties only?
- Are you willing to do work i.e. fixer up? Do you have access to contractors?
- Are you planning on flipping or holding the property?
- If you are holding are you familiar with tenant/property management requirements?

I would certainly do your homework along with talking to several people who are currently investing.

Best of luck and congrats for taking the step!
Reply With Quote Quick reply to this message
 
Old 03-08-2008, 06:29 PM
 
Location: Norfolk, VA
1,036 posts, read 3,960,951 times
Reputation: 515
Quote:
Originally Posted by jinxor View Post
You should talk to a loan officer / broker to find out what financing options are available to you (based on your credit score, income, liquid and hard assets). Figure out how much you can borrow and how much of a down payment is required. Figure out approximately what you will need to pay in closing costs. At least in my area here in NC, the loan guys I talked to in the last month have said that there are not a lot of loan options available at higher than 80 LTV (20% down). You will probably get a better interest rate at 75 LTV (25% down).

That is the case for investment financing almost everywhere. Some declining markets (South FL, many parts of CA, etc) may require more... but the general rule now is 20-25% down to get good rates and terms. If you have excellent credit, income and assets perhaps you can get by with 10% down but the property will likely not cash flow unless you get it at an amazing price and rents are very high in the area.

Just make sure you have the reserves and income to cary you through 6-12 months if any problems were to arise. Careful investing is far better than trying to make a "sure thing" overnight.
Reply With Quote Quick reply to this message
 
Old 03-09-2008, 05:52 AM
 
27,206 posts, read 46,568,066 times
Reputation: 15661
Don't buy a investment if you haven't got the funds to put at least 20% down which means you can't afford it if you can't get it sold fast or rent it out fast. Be safe rather than sorry.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Real Estate Professionals
Similar Threads

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top