Real Estate Investment: 10 Tips

Learn some very important real estate investment tips and learn how to become profitable in your new venture with minimal risks involved. This article will give you exactly what is necessary to become successful in purchasing and investing in rental properties.

1. Hire a Mentor to Learn Real Estate Investing. A mentor is a person who will guide you to become independent and wealthy slowly. Infomercials promising you hundreds of thousands on your first two deals are not to be watched twice. It is imperative to hire a professional in the field of investing, such as a broker with a track record of closing top investment transactions or by joining an investment club.
2. Learn No Money Deals in Real Estate Investment. In order to take advantage of no money deals, you must know how to use them. How can you the investor approach a seller with a no money deal when you do not know how to construct the deal. Here are a few examples: lease options, seller financing, creative financing, 80/20 loans.
3. Devour Financing Guidelines and Rates for Real Estate Investment Properties. Sit down with as many banks, mortgage companies and financial corporations as possible and study all the new programs and find out the exact requirements.  Many programs might include: interest only loans, loans with home equity, FHA insured loans, fixed rate loans, variable rate loans and fixed rate loans for five years.
4. Learn All About Creative Financing. Investing in real estate can entail many facets and knowing how to properly put a seller financing package together is imperative. Seller financing is when the seller is the bank and therefore there is no need for major closing cost. Closing cost are very expensive including points required by the seller. Seller financing may require no money down or a small down payment in exchange for a larger interest rate, usually one-quarter to one-half percent.
5. Using Other People's Money in Investing in Real Estate. Money in the bank is like gold in Fort Knox. If the investment should fail, you have funds in the bank to recover and purchase again or bail out the failed investment. Using other people's money in investment transactions could be as simple as allowing the seller to pay all closing cost in exchange that you will pay a higher price for the home.  In other words, financing closing cost.  Look also at putting less down on homes and looking for programs where no PMI (private mortgage insurance) is ever required.
6. Due Diligence is Required. When investing in real estate due diligence or complete investigation is required. This means to completely search every single loop hole available everywhere and everyplace.  This could be a complete net sheet, title report, closing cost, building inspections and loud neighbor problems.
7. Contingencies a Must in all Investment Contracts. Know your rights when it comes to writing contracts such as: buyer has the right to a complete physical inspection; buyer to be provided with a full home warrant plan on all units; buyer has the right to cancel the escrow if financing is not approved to his liking; seller to give full disclosure of all defaults with said property; buyer has a right to receive all deposits, keys to the apartments and leases in escrow.
8. Follow the 10 Percent Rule in Real Estate Investment Properties. Do not buy any property where you can not have at least a ten percent profit yearly. Take into consideration all cost including mortgage, taxes, insurance, gardening, repairs and possible loss of rent due to tenants vacating the property.
9. Manage the Real Estate Investment Properties Yourself. Save yourself tons of money by becoming the property manager and avoid complications with companies who "may" charge too much.
10. Hire Your Own Maintenance Crews. Following tip the previous tip, save lots of money by hiring your own individual crew to do your repairs and lawn maintenance.  Sometimes a local fix-it man can save you tons of money compared to a large company.

Resource:
Real Estate