If you are planning to enter the real estate industry, to purchase or build property as your long-term investment, there are different ways you can achieve this. The simplest technique is to purchase and fix method. That means purchasing properties that require some work and fixing them to improve their value. The following are tips to help you in your real estate investment journey.
Do Your Research
You need to start doing your research in advance. Find an area where you want to buy a home and then look at properties that are underpriced relative to the neighborhood but require a lot of work. This technique is known as “handyman’s special,” and you can find it advertised that way in the paper.
Pay Lowest Down payment Possible
As soon as you find a home that is underpriced relative to the neighborhood and has the adequate potential for a fix-up, you buy the house with the lowest possible cash down payment. Usually, the seller will allow you to purchase the property with “no money down” if you want to move somewhere and do away with mortgage payments. Also, you can get the seller to accept a second mortgage or trust deed on the property.
Move In and Get Busy
In this case, you take your possessions to your new home and start working hard evenings and weekends to renovate and refurbish your investment. If you have time, you can take some courses on home construction and carpentry, purchase your own tools, and seek advice from people who have adequate experience in home renovations.
Minimize Your Investment
When you have transformed and renovated both the yard and house to make it look good, then you have the freedom to sell it, rent it, or refinance it. If you want to sell it, ensure you do so for a price that is higher than what you paid. In this way, you can get a good profit from the house and purchase another to renovate and refurbish. Secondly, you can rent out the house to get monthly payments that offer you extra cash flow and mortgage payments. Thirdly, you can rent out you’re renovated out and seek a loan from a back to refinance it. With monthly rental income, the bank can give you a new mortgage or lend you money to purchase another property.
Repeat the Process
Once the first investment is successful, you can repeat the process. In this case, you can get a bigger property, fix it up, and get it ready for selling, renting, or refinancing.