|Buying Property Tips#1: Choose the Right Location|
|Before you choose a location, it is of utmost importance that you consider the development prospect of the area. Other factors to consider here is crime record of the area, availability and nearness of public facilities and utilities.|
|Buying Property Tips#2: Study the Local Market Dynamics|
|It is important to get well familiar with the local realty market. Learn the variation in property prices by street. Don’t shy away from asking a few realty investment agents questions to get better insight on the matter.|
The dipping economy, unemployment and lay-offs have all resulted in unpaid loans and foreclosed properties. Foreclosed property investment has become a “hot” investment option for many real estate investors. And, flipping is a popular exit strategy for these investors. The strategy of buy/fix/sell and earn quick money is a hot favorite among investors. Statistics state that investors flipped almost 100,000 homes in the year 2012 and earned about $30,000 per flip. Furthermore, flipping foreclosed properties has seen a 25% rise in 2013 as compared to 2012.
You must have heard of these innumerable glamorous stories. But, we tend to forget that every success story also comes with a disastrous one too. Similarly, you do not know about investors who have ended up with blocked capital in the form of unsold properties. Is flipping indeed a good option for foreclosed property investment?
Flipping properties is fraught with risks. However, if you just take care of a few things, you can also boast of a glamorous story and not a disappointing one.
When you set out to flip a Texas Wholesale Investment Property, you first need to have a clear budget. Foreclosed properties mostly come with a cash-on-sale clause. You must have your finances ready. Some foreclosure sellers expect the buyer to submit their “proof of funds”. Its a good idea to carry proof of the funds with you and that you have it ready before making the offer.
|Buying Property Tips#3: Choose the Right Property|
|Getting the right property right away is quite unlikely. First, you need to be clear on why you want to buy an investment property. After that, you will be able to make right decision based on factors like remoteness or accessibility of the property.|
|Buying Property Tips#4: Do the Math Properly|
|Get a precise idea on the value of assets you have available. If you are investing in rental property, make sure you can easily cover the mortgage payment through rents. Additionally, get a clear idea on the appraisal value of the property beforehand.|
|Buying Property Tips#5: Consider Additional Expenses|
|When purchasing an investment property, it is not only the selling price that investors need to consider. There are various additional expenses such as property tax, home owner’s insurance, repair & maintenance that must be considered.|
Your budget must also include the unexpected costs. There may be many. You may find a broken pipe for instance, even after a thorough inspection of the property and an estimate of the repair cost.
Flippers who underestimate their rehab costs end up with reduced profits. You must have a clear picture of the construction costs as well as labor costs in that area. It is better to employ a professional real estate wholesaler, who can chalk out a clear estimate of the repairs and rehab charges. In this way, you can avoid any unlikely surprises. Also, hand over the repairs to a seasoned contractor. He will not only ensure a smooth rehab, but also take care that you are not crossing the allocated budget.
If you wish to have a success story with your Texas Investment Real Estate, you also need to conduct a thorough market research of the area in which your prospective property is located. Understand the style and type of houses in the neighborhood and the buyer's preferences. You can rehab the property in sync with the same number of rooms and layout for instance.
Next, find out the selling price in the neighborhood. You can have a clear estimate of the expected profits. Experts suggest that a flip is worth the time and energy spent for 3-4 months, only, if it promises a minimum 15% profit margin.
If you take care of these points and work hand in hand with seasoned contractors and real estate wholesalers, your Texas Investment Real Estate is bound to reap healthy returns. Finally, time is a big factor. So, add a clause for penalty charges if the contractor does not finish his work in time. You can thus, safeguard your interests and avoid delay.
|Buying Property Tips#6: Inspect the Property|
|To ensure that you are getting everything you are paying for, a thorough inspection of the property is essential. Besides ensuring that you are not overpaying, a rigorous property inspection also gives you a good estimation on what the additional expenses might be.|
|Buying Property Tips#7: Pick the Right Financing Option|
|While interests on investment property loans are tax free, some borrowing costs aren’t immediately tax deductible. Knowing that, and structuring your financing in accordance is crucial. Don’t hesitate to ask for help from a financial advisor.|
|Buying Property Tips#8: Invest through Equity|
|One of the best ways to purchase an investment property is to leverage the equity of another property (including your primary home). This is a preferable way among regular investors, especially due to added tax deduction advantages.|