Zillow Advice: Investing - would like to purchase my first piece of real estate property as an investment how do I get started

Know your local market and ...

Fri, 17 Jul 2009 23:38:00 GMT

Know your local market and rental rates. In my market 4 bedroom single families can be had for about same price as three bedrooms and rent for more. Some investors I work with started with small condos and worked their way up to larger properties. It helps to be connected with contractors and realtors who can assist you. You cash position is vitally important for many reasons. Leverage, cash flow, and ability to handle repairs and vacancies. My first question to myself would be do I want to go all in(like a fourplex) or tiptoe in(like a cheap condo or townhouse). Best of luck to you!

Don't be afraid of being ...

Fri, 17 Jul 2009 22:59:00 GMT

Don't be afraid of being an "out of state" investor. The best deals are often located outside of your local market. As an investor myself, 95% of all my properties are located out-of-state.

Be sure to purchase investment property in well located growth markets where the local economy is strong and the neighborhood is desirable.

Also be sure to purchase properties that make sense the day you buy them, with solid financials and good property managers in place.

Start by educating yourself on real estate investing in order to help assure your success. Here are some real estate articles to help get you started.

Good luck!
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I would also add the following ...

Sun, 05 Jul 2009 05:11:00 GMT

I would also add the following terms to know, in addition Reba's list:

NOI (Net operating income)
Cash-on-cash return
Total return
and NPV (net present value), when evaluating future cash flows.

Find a good agent with a financial background to help you with your investment.

Good luck!

If you're over 62...Considering ...

Sat, 04 Jul 2009 12:15:00 GMT

If you're over 62...Considering Something Like This May Do

What type of property are ...

Sat, 04 Jul 2009 12:11:00 GMT

What type of property are you interested in acquiring? Duplex, Triplex, Fourplex? Are you planning on living in the building or just renting all of them out to have them pay for your investment property?

Don't just get yourself concerned ...

Fri, 03 Jul 2009 20:12:00 GMT

Don't just get yourself concerned with the down payment amount. Learn how to truly evaluate whether or not a property will cash flow. You should also talk to your CPA about what this will do to your taxable position and make sure investing of this type will be to your benefit. Think also about your investment timeline horizon and what your long term goals in investing in real estate mean to you. Are you hoping to buy and hold, relying only on appreciation? That's like buying a stock and hoping it goes up in value. If you buy and hold, with cash flow as a consideration then it is similar to buying stocks that provide dividends and potentially are worth more when you go to sell them.

We are huge advocates of "cash is king" so be sure to find cash flowing properties. You'll hate it if you buy a place hoping to only gain on the eventual sale then find out the hard way that it costs a lot of money to upkeep a property and deal with tenants and/or vacancies. We've talked to people who bought with the appreciation idea only 1-5 years ago who have been losing money every month since their purchase and now will lose in the sale because of where values have gone. NOT a pretty picture.

Be sure whichever agent you choose to work with can calculate, or at least understand terms like ROI, Cap Rate, GRM, IRR and more. Not all agents are created equal when it comes to evaluating investment property but the ALL would love to sell you one, regardless of its true potential to meet your financial needs. I'm spoiled since my business partner is a former financial analyst type with an accounting background. Together we form a great team for our investment clients and I'm proud to say none of our clients are in the position I described earlier.

Find, join, and communicate ...

Fri, 03 Jul 2009 09:47:00 GMT

Find, join, and communicate with your local real estate investor's group. Learn about how to evaluate condition, neighborhood, and price from an investor's point of view. Be amazed at how many seemingly good opportunities get passed by. While you are learning, save-save-save more than the 30% down payment. You are about to enter the exciting world of unexpected costs. And, while you are learning and saving, get pre-approved. Position yourself with care then dive in and enjoy the waters!

The first thing to do is ...

Thu, 02 Jul 2009 22:44:00 GMT

The first thing to do is to save up the 30% down payment required for investment properties.

Getting Pre-Approved is the ...

Thu, 02 Jul 2009 22:15:00 GMT

Getting Pre-Approved is the first step. Once completed you will also know where you stand as to price range also realtors and sellers will know your serious about buying. Any offers made to purchase will have a better chance of acceptance with a approval letter.
Please call me if you need further assistance.
Good Luck