You will have more debt service. This is the natural course of 100% financing for an income property. The result could be a large loan payment that will eat away at your cash flow like a gorilla and require you to feed the property. That is, you could wind up digging into your pocket every month to make up the difference between cash you receive and cash you pay out.
The last idea is real estate day trading. This is the idea of buying and holding on to a property for only a few months. The goal here is to sell the property for a profit. Note that when doing this method you will make little or if any repairs to the property before reselling it! Most investors will purchase homes that are very attractive in the market and have the best potential for reselling it. The key to this process is to negotiate the deal well below market value to insure that the deal is unbearable to the savvy investor!. Lastly, keeping tabs on the housing market is important. With this being said be sure to have a positive and well-respected mentor who is actually doing deals in today’s market to help guide you to your goals.
First and foremost, you must find a lender. Start by asking friends, work mates, family, or other reliable sources for referrals. You can even speak with some real estate agents in your neighborhood and search on Google.
Fortunately, we have found someone through our local real estate invesment club that knows who we are and knows we are a very good financial risk. He is willing to finance this home for us so we can record a loan and get some “traditional seasoning” on a mortgage. The “signing party” will be the standard mortgage and promissory note – checks transferred. Mortgage filed in the city-county building, then it is off to lunch. Then more searching for the next housing deal.But, with some big lessons learned.
Real estate is not the stock market. You cannot expect to play it for short term profits. In the past, people have invested in property and flipped it for handsome profits. But that bubble has popped and it is anybody’s guess when things will be as they were before. So, play in real estate only if you are in it for the long run.
Become a member of a real estate club. A real estate club will teach you a little something valuable in the industry and get you into contact with some very important people. A virtual real estate club which could be joined online can be a solution to time constraint in joining a physical real estate club.
Then one day, I had the idea that I should probably invite the Burger king guy, too. He was also in Atlanta, and he covered exactly the same territories–the same seven states. Burger king accepted the invitation, and their organization came down for the special purpose of giving their side of the story, knowing full well that the McDonald’s guy was doing the class, too. So, I had McDonald’s guy come on Tuesday, while Burger King came on Wednesday.
Buy the best land you can afford. Cheap land will get you nowhere. By the time you’re able to sell the land to an investor, or if you have enough money to develop the land on your own, you need prime property. Choose land that is accessible to roads, commercial establishments, and other places that make it a convenient, prime choice. It also helps to buy land with a good view of the surrounding environment.