Think real estate investing is just for old married couples featured in TV infomercials? Wrong! I was about 30 when I bought my first piece of property. It was a two-bedroom house in a quickly appreciating neighborhood in Orlando. It was the cheapest good quality house in the area, and I netted $30,000 by flipping (reselling) it eight months later.
I wish I had started investing sooner. The only reason I didn't invest was because I didn't understand the process. Now, I buy two more homes every time I sell one.
Here are the basic steps for investing in real estate:
1) Determine your strategy early: flip, renovation, or long-term rental. Do you want to hunt for something undervalued, hold it, and then flip it in the coming months? Are you a skilled carpenter, or do you know what's involved in a renovation? Are you willing to deal with a renter? If so, the renter will pay your mortgage and give you some immediate profit.
2) Interview realtors. Don't waste everyone's time looking at property with a realtor until you know you're with someone who is investment-focused. Most realtors will not be able to tell you the basic numbers you'll need on a property. A good place to research these is TheSRE.com, the real estate investor networking community.
3) Interview mortgage brokers. Once you find a realtor, ask for three broker recommendations and check out what your local bank or credit union offers. You'll want to know what each offers in terms of interest rates and closing costs. Bring a copy of your three credit reports to your meetings, along with a sample property (in the same price range), so they can run hard numbers....
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