A Complete Guide to Investing in Commercial Property

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First things first… Capital!

You can finance your first investment property if you have the credit, but as a general rule, I prefer to pay cash for all my real estate investments. This way I can keep the investment until the right time and guarantee myself the ROI I’m looking for. If you choose to purchase your investment property through financing, you need to be ready to do the work and do it fast. Financing only works in a situation where you can trade the house for at least the cost plus fees to prevent interest payments from eating into your profits. You should also consider that every time you finance, you will have payments. Granted a year’s worth of payments will total much less than if you bought the property in cash, you’ll need to have guaranteed cash flow and an emergency fund that can cover the payments until you can cash in on your investment. Sometime it can take months or even years. we will fix it

The second thing you need is courage.

Know your market and know your product. Fortunately I have a good close friend who is a real estate agent. You can search for comparable homes that recently sold and tell me what features they had, what problems they had, how long it was on the market, and how much it ultimately sold for.

I search realtor.com and keep an eye out for auctions or homes that are “for sale by owner.” When I see one that I think could be trading at a great value (10,000 below market is my minimum to even consider the place), I call my real estate agent, tell him the address, and tell him to find some comparable. First look for homes with similar square footage, lot size, bedrooms, bathrooms, parking, and location. This usually gives me a great idea of ​​what I could get for the house as is.

If the value is still there, I’ll go in and check the place out. I am looking for easy updates and problems. Problems cost money, updates make money. So I like to find a place that doesn’t need a lot of work to keep it in good condition but has things like outdated cabinets, carpet over a good hardwood floor, outdated bathrooms, and minor cosmetic issues. These are the things that give you the opportunity to earn money. If you update the bathrooms and kitchens, and put on some new paint, replace the carpet, or better yet, polish some hardwood floors, you’ll make a tenfold payback on your investment.

If I don’t see anything important, I’ll look at my comparable for things I plan to do around the house. For example, which comparable had hardwood floors, which had updated kitchens or bathrooms? Add all these things together and you get a great idea of ​​why you can sell the house. But remember to be realistic!

I like to think I’m giving a family a good deal. I take a point of sale and turn it into the American Dream! I don’t want to scam anyone, but I want to make a profit.

If I think I can do this job, I’ll make an offer and bring in an inspector. If the inspector finds problems like air conditioning not working, heating not working, electrical problems, mold, plumbing problems, etc., these are all problems that will eat up your time and profits. As such, I make sure the seller covers the cost of these problems or fixes them himself. If they don’t, I walk away, unless the house is worth so much that I can fix the problems myself and still make a ton of cash.

Next up are the updates.

Vanilla is the flavor of choice. You don’t want to do anything that expresses you because, well, you’re not going to live there! Watch the show “Income Ownership” on HGTV. You now have the options here to do your own upgrades or hire someone. DIY has a BIG advantage and many disadvantages. The upside is that it saves $$$, the downside is that it takes a long time to do, you often have to redo things as you’re likely to do them wrong from time to time, and it’s a general pain. in the butt

I have a friend who is a firefighter and has his own general contracting business. He works one day at the station and two days off. He used it for those two days. He knows me and he knows what I’m trying to do. I need things done right the first time, I need it to look good, work right and be as cheap as possible. He already knows me, and honestly, we do a lot of our renovations identical to each other. Same paint color on all walls in the house “eggshell”, same cabinets in bathrooms and kitchens “mocha”, same countertop and sinks if needed, same toilets, tubs, etc. We only make minor changes if, for example, the kitchen has existing tile which is good, we buy matching cabinets, or sometimes we just paint the cabinets and

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