Real Estate Investing: A place to start

Must Have A Real Estate Investing Objective

First thing first. Do you want a Vacation home, 2nd Home or Investment Property?

The first thing you want to figure out is your motivation and objective. Is it a Vacation home that it would be nice to rent out? Here we would look for the best appreciation in combination with areas that allow short term rentals. Or is it purely investment and you need to make a profit each month? This is a totally separate category of properties.

Must Have An Investment Lender

The second part you need to figure out is how best to finance it. Did you know you can a better rate for a 2nd home then an investment property? Did you know that you can get a better rate for putting more money down? You need to talk to a lender who specializes in investment lending.

What You Need to Tell Your Realtor About the Real Estate Investment You Want

Now that you know these items you can them meet with you Realtor. Remember you realtor is going to be narrowing down the properties that will work for you situation.

If you are looking for a monthly income then you must tell your realtor
1. How much of a down payment you are planning on making?
2. What interest rate you lender gave you? Is it an interest-only loan?
3. What price range your lender pre-qualified you to be in?

Your realtors needs to know this because on each property they present to you they would have run a rental analysis and compared it against your mortgage payment to see if you are making a monthly profit. But if you don't provide them with the above information; then it is impossible to do so. Please be aware that this analysis is very time consuming for your Realtor so they will usually require you to sign a Exclusive Buyer Brokerage agreement to ensure they are not wasting their time.

Please understand that it is difficult in today´s appreciating market to find a property in the "hot areas" to rent out and make a monthly profit on unless you either put a significant amount of money down and/or do a low rate mortgage option such as an arm or interest only. So, it is important to decide on financing before even looking at homes unless they are willing to take a monthly hit and wish to focus only on the appreciation.