Talking today with one of my investor buyers. I decided to write this article and share with you the best Tips for Real Estate Investors to all those who want to start in this lucrative business.
How to start your investment in Real Estate?
If you already own a property, then you have already taken the first and most important step. By becoming an owner, you will be showing to the bank you have Real Estate experience, which will help you a lot when requesting an investment loan. An excellent option is to buy a multi-family property as a first home, while you live in one unit, you can rent the other units, this is an excellent option for beginners.
In addition, once you have your first home, after 12 months you can request a new loan to buy another property as your main residence, leaving the previous home as an investment property, in this way you will become a Real Estate investor.
What type of loan do Investors use?
For real estate investors in Florida, there are a wide variety of mortgage loans that give you the ability to buy or refinance. Explore your options below, then you can contact me and I’ll help you find the program that best suits your needs.
For Investors who are just taking their first steps, my personal recommendations are:
- Conventional Government Loans for Investments, minimum downpayment 15%* at 30 years fixed interest.
- Loans for Rental Income, NO Income and/or Employment Verification, minimum downpayment 20%*, 30 years fixed.
- Loans for Foreigners, minimum downpayment 20%* fixed for 30 years.
(*)Note: Condominium type properties, with Home Owner Associations, the minimum downpayment is 30%.
For investors with more experience my recommendations are:
- Hard Money Loans (such as Fix & Flip), minimum downpayment 20%, 1- or 2-years terms.
- Variable Loans (ARM), with fixed periods of 3, 5, 7 or 10 years, depending on the investor’s needs, minimum downpayment 20%.
- Commercial Loans, minimum downpayment 30%.
Find out about the characteristics and opportunities of real estate investment in the area that you would like to invest.
Is it difficult to obtain an investor loan?
The short answer is NO, once you are ready to request your loan from the bank and pre-qualify you will only have to have these documents on hand:
- Driver’s license.
- Social Security card.
- Last 2 months bank statements.
What is the best strategy you can use when investing in Real Estate in Florida?
As you can see there are many ways to invest in real estate: House Flipping, long-term rentals, short-term rentals like Airbnb. If you are a beginner in this business, my recommendation is that you start with a low-risk strategy that you may find more attractive and convenient for you.
The most recommended strategy is: Buy, Renew and Sell (Fix & Flip). Why? There are many homes that go on the market with a reduced price because they need a comprehensive reform. After reconditioning it you can sell it at market value and recover the investment in the short term and make a good profit after the sale.
Why choose a Conventional loan?
Conventional loans are an excellent option for investors with excellent income, since two consecutive years of tax returns are required.
Tips for making a good investment in real estate
Research the market:
This investment, like many others, when we are going to make the purchase of real estate, it will be very important that we carry out an exhaustive investigation of the real estate market. With the frequent world fluctuations, there are variations in the prices and supply of the sector in the medium term, for which we must pay more attention to the new opportunities in assets. As well as the parameters related to financing, such as interest rates.
Choose a location:
Location is one of the most important variables when it comes to analyzing the opportunities that can be found in the real estate market. It is vital that we get the location of the chosen property right, even more so if the purchase is made as an investment.
Seek the advice of a professional Loan Officer, I will qualify you correctly and approve the loan that best fits your needs.
Determine the use of your investment:
In real estate you can obtain profits, on one hand through the valuation of the property, and on the other hand, through the annual net income. In the case of buying a property, calmly reflect on the use of it, will it be to live in it part of the year or will it be to rent it?
There are several real estate options. The first is residential, but there are also commercial and industrial properties. Investment in commercial real estate is often the most profitable option, in terms of amounts and because the client is generally a company.
Get Your Pre-Approval Today!
As a Mortgage Loan Officer, I can advise you throughout the process of buying your property. If you are thinking of buying or refinancing a property in Miami, Florida, send me a message or click here, and I will be ready to provide you with a totally FREE Financial Advice.