The truth of real estate investing

by MARK HUMES

There is more to real estate investing than the late night infomercials,books and programs tell you.I can see how people get sucked in they have a great sales pitch and tell you every thing you need to know is in their book or course but after reviewing many of these I have to tell that's just not the truth.So if you were Thinking about buying a book or course don,t because I am going to tell you every thing you need to know In this article.

First off real estate investing is a business just any other business,This mean you will have to do your research to find out what you need to get started. I am going to save you a lot of time and tell you what those thing are. The first thing you need is money, contrary to the books out the no money down just dose not happen. You will also need money for expenses because first and for most you will need a real estate attorney before you ever think of buying a property.In many states all real estate transaction's have to go through an attorney and in many other states you need to have an attorney to close any real estate transaction.However I do have to say having an attorney is the best investment you can make because you have protection he can tell you what is legal or not as well as handling your contracts,an attorney will also be able to help you with any disputes that come up and if you invest in real estate for any amount of time you will see they will.

The next thing you will need is a financial & estate planner this is also very important because there is a level of risk in real estate investing and you will want you assets protected and you will need someone to advise you about taxes and other matters.Like I said before real estate investing is a business like any other business.You can not have all of your money wrapped up in real estate all of the time so you will need a financial planer to tell you how to diversify your money and give you that all important plan so you can reach your goals.

Lets say you get all of that done and you think you are ready to go buy your first property.The question now is where to start? Well unless you have a huge amount of money to buy in cash the first thing you should do is find is good financing. This is where the rubber meets the road. First you will have to decide how much you are willing to spend on a property then you will need to have your down payment and closing cost this can be anywhere between 5% to 20% of the purchase price when its all said and done at the closing table.You may ask why such a big spread well that is because a down payment can be from 5% to 15% and you don,t know how much you are going to be charged for the loan. most mortgage brokers charge from 3% to 5% of the loan amount.Somethings to keep in mind you will need a credit score of at least 620 to buy investment property and you will have to have enough income to show you have the ability to pay back the loan. You will also have to be able to show 2 or more years on the job.

OK lets say for the sake of this article you can get a loan you have your down payment and you are ready to buy a house what next? Well lets look at what you know so far. You know what your long term financial goals are,You know what your monthly payments are.So now you have to find a property that you can rent for more than than your mortgage payment is as well as finding a property that will have a resale value high enough to keep up with your financial goals. You can go out and look for your self which is a lot of time and effort.you can search the web,You can even try a real estate agent.The list goes on and on and can be a big job the most important thing to remember is once you find a property you want, Do you home work. Make sure the property will sell for what you want. this means you have to find out the percentage of appreciation is on that property and don,t for get to add you taxes.insurance,maintenance and management fees to your payment, In some cases the rent will not cover all of your expenses and you will have to pay them out of pocket tell it time to sell the property. I do know that is not an ideal situation but is often a reality this dose not mean you got a bad deal you will make you money in the end,but I want you to be aware it could happen and it is better to know going in.

So now you have bought your first property. Are you going to manage it your self or hire a property manager. Well you can only manage it your self if the property is a reasonable distance away and if you want to deal with you tenets which has its challenges.Doing it your self takes up a lot of time you can use to find more deals so just trust me on this one find a good property manager.

OK time to sell. After a year of dealing with your renters and looking to see how much money you made or lost its time to make your real money and sell. You can do it your self and save a lot of money or find a Realtor to sell it for you. If you opt to sell your self its all up to you and how quick it sells is on your shoulders or you can have a Realtor sell it for you. some things to keep in mind if you use a Realtor. They will charge you 5% to 6% of the sales price In some cases if you shop around you can find cheaper but that is the standard also when you agree to let them sell it you are under contact with them for up to a year. This means no matter what happens if you sell your property in that time frame you have to pay them. This is where your at attorney pays dividends by making sure you don,t get roped into a contract that is an unreasonable amount of time.

Now That you truly know what your up against if you truly want to proceed with becoming a real estate investor. I do offer a service that provides everything you need and we do all of this work for you at a fraction of what it will cost you doing it all your self just click on my link The real deal in real estate investing