One of the biggest mistakes that new real estate investors make is not having financing in place or not knowing the cost of repairs or rehab. You should always have a plan for real estate investing and not just buy because it's a good deal.
The real estate market is booming right now. Due to increased layoffs around the country, individuals are not able to keep their homes. While this can be a gravy train for real estate investors, you have to be able to jump on the deal and know in advance how extensive the repairs are and the total amount of out of pocket expenses you will endure.
When you find a property, you must first decide what you want to do with it. Will you flip it for a short-term profit? Will you rent it out, or will you hold on to it until the market picks up for buyers?
If you want to flip the property and you know you can find a buyer quickly, perhaps you should consider an adjustable mortgage with a low rate. This is only if you're 98% positive that you can sell fast ' nothing is guaranteed.
If you plan on renting it out or holding onto it, consider a fixed rate. This allows you to manage your funds better. For example, a renter will cover all or most of the mortgage, but there is no guarantee that you will keep the home rented. With a fixed rate, you will have a fixed mortgage payment in case you have to foot the bill yourself.
Going into real estate investing without a plan, almost always ends up costing you money. If you're new to the game, consider talking with the experts to learn strategies that the top investors use every day. Get on the fast track to real estate investing.
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