3 Questions to Ask Before Investing in Real Estate

By
Mortgage and Lending with EstaR Mortgage NMLS #241125

 

 

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  1. How can I increase my rate of return?
    The cornerstone of any smart investment strategy is to calculate your rate of return.  With real estate this is done by running the numbers using an internal rate of return (IRR) formula that takes into account:
    • Present Value (PV) - what am I paying out of pocket to get into this investment?
    • Term (N) - what's my timeline and how long am I going to hold this investment?
    • Periodic Cash Flow (PMT) - what's my monthly cash flow?
    • Future Value (FV) - what are my net proceeds (after expenses) when I sell the investment?

  2. How does my rate of return with real estate compare with other investment opportunities?  
    When calculating your rate of return, make sure to account for:
    • Carrying costs (mortgage, taxes, insurance, maintenance, etc.)
    • Your time spent managing the property
    • Vacancy loss if you don't find a tenant


  3. How can I reduce my risk?  You may want to consider these strategies to reduce your investment risk:
    • Increase your liability insurance in case something goes wrong
    • Consider a rent-to-own strategy where you find a tenant before you find a property
    • Consider mortgage strategies that result in more cash flow and/or better liquidity 


Contact me so we can get started on helping you answer these questions!

 

 

Chris Freck MBA CMPS
Chris Freck MBA CMPS
Broker
NMLS: 241125
EstaR Mortgage
MyLender@EstarM.info

(510) 463-1003

2413 Webb Avenue, Suite E,
Alameda, California 94501
Corporate NMLS: 1547521
Mutzig Management, Inc dba EstaR mortgage is California Bureau of Real Estate license #2020370. Christopher A. Freck, California BRE license #1454795 with an MLO Endorsement. This material is not from HUD or FHA and has not been approved by HUD or a government agency.

Comments (1)

Chris Freck
EstaR Mortgage - Alameda, CA
EstaR Mortgage, A Bilingual Brokerage

For more information we can be reached at 510-463-1003, MyLender@EstaRm.info or https://EstaRmortgage.com

Jul 23, 2018 10:41 AM

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