|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.|
Foreclosed property investment has become a hot favourite among real estate investors. The purchase price is deeply discounted and the ROI is very promising. Indeed, every Southern CA investor is eager to invest in “Los Angeles Investment Houses”.
The buy/fix/sell or buy/fix/rent is indeed an attractive formula. Buying ” Los Angeles wholesale properties” at a 10-40% discount; undertake the repairs, rehab in three to four months and then re-sell it at the market price. A short term profit indeed!
But, when you begin, your profits are mere estimates. Apart from your purchase price, nothing else is definite. You estimate the repairs cost based on the property inspection. You estimate the sale returns based on the prevailing prices of similar properties in the vicinity. Based on these, you determine your “estimated” profit. If any one of the these fails to match with your estimates, you are bound to witness a decline in your expected profit margin. And, the once glittering investment may soon lose its appeal.
Let's say you acquire a property and assess the repair work. You need a new wash basin, replacement of some broken window panes and the house needs a fresh coat of paint. However, you might fail to notice the broken pipeline or cracked shingles on the roof or a dilapidated wall; as these are all structural faults. You discover the problem after acquiring the property. The cost of mending the pipeline, replacing the roof, or constructing a new wall will unfortunately eat into your profit.
|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.|
In yet another senario , you may estimate the selling price with similar properties in the vicinity, but fail to consider that the distressed property has been lying vacant from quite some time and may not demand the same price. You acquire the property in a bid to make “X” profit, but fail to make the same if the selling price is lower than what you expected.
Therefore, appropriate estimates are essential while investing in “Los Angeles Investment houses”. While, seasoned real estate investors may fail to do so efficiently, experienced real estate wholesalers can take you through these estimations. Real estate wholesalers work with the motto of providing knowledge, resources and opportunities to real estate investors. With their unsurpassed knowledge, expertise and experience, they can estimate the repair costs and ARV (After repair value) efficiently.
For instance, a broker would be able to point out that the roofs of houses in Denver should not be flat preferably, because they get a lot of snow. Each area has its own construction must haves for the property to remain in good condition and avoid costly repairs or upgrades. While you may not notice this while rehabilitating the property, it cannot miss the eye of an expert and well-trained real estate agent. Even while assessing the ARV, the real estate agent considers all the factors governing the sale price, apart from the market price in the vicinity.
Appropriate estimates can save you from unexpected and unhappy surprises during your investment journey. Therefore, a smart solution while investing in Los Angeles Wholesale properties is to hire a reliable and experienced real estate wholesaler.
|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.|