I get a lot of calls from people looking for non owner occupied investment properties. They often have some idea of what makes a good investment property, but many times they don't. So, I will highlight what you should look for and some other important facts that the investor needs to know.
I thank Charlton Sheets for most of the phone calls I get inquiring about investment properties but I also blame him for alot of misunderstandings that go along with these calls.
Important factors to buying investment property.
1) Down payments. Almost any non owner occupied property purchased will require down payment. I do not know of any lenders willing to fund 100% of the purchase price unless it is also going to be the buyers Primary Residence. Typically 10% down is required.
2) Buyers who call me most often are looking for a property that can support it's own costs and have money left over. This of course is ideal, yet most are only willing to purchase property in areas saturated by investors and contractors who snatch these up quickly. These areas also seem to be where the markets are strongest and generate higher property values and higher sales prices, thus making your investment cash flow becomes difficult.
3) Look for areas close to high demand cities. If you can find a property within 15-30 minutes from major areas this is worth looking at closely. As the cost of renting goes up in the bigger cities there will inevitably be some portion of the population who choose to live in more affordable areas nearby, saving money on rental costs. The areas near a bigger city may have much lower priced property, and may get almost as much in rent. This is Ideal, because as the push gets bigger and bigger in these areas, the market value of your investment has a great chance of unusual and rapid growth in equity.
4) Get approved, know what you can afford. Looking at $500,000 multi-family complexes, may not be the best place to start. Remember, the first one is probably the toughest, but as you add to your experience and your net worth you can create a great real estate investment portfolio.
5) Put a Realtor to work for you. If you don't know one, get to know one. There is no better source for property and property info than a good Real Estate Agent. I suggest stopping in to see them initially, as most get plenty of calls from wanna-bee investors, then never hear back from them again. Personally visiting them does two things, it shows sincerity and helps you decide wether or not the agent is right for you. I also suggest you pick an agent who is a full time Realtor, as good deals may not wait untill they return to work next tuesday.
We have some very good investment properties, some that have huge cash flows in comparison to the purchase price. Call me at 608-524-1117 or log on to www.1stopwi.com and look under real estate marketplace.
Comments(2)