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Four questions you should be asking when buying investment property

by John Saunders
3rd Sep 18 10:08 am

There is money to be made in real estate, but you need a plan if you want to be successful. Take your strategy beyond your daydreams and start by asking yourself the following four difficult questions. When you’re ready, we’ll help you find the best hard money loans Los Angeles has to offer for savvy entrepreneurs such as yourself.

What exactly are my preferences?

You want to make money of course, but your personal tastes may not always coincide with every investment strategy. Do you want to simply store your savings in a secure investment portfolio, or do you want to be actively involved in managing your property?

There are two basic types of real estate investments:

Passive – Crowdfunding, REITs, Private Lending Clubs

Active – Rental Property Ownership and Property Flipping

Not everyone has the tolerance or the desire to manage a property actively, but these sorts of strategies typically produce greater returns.

Do I know the markets well enough?

The money in real estate is made on the buy side. That means you earn your profits when you first purchase a property based on the discount you receive.

Everyone knows this fact. Competing investors are also trying to cut into the seller’s margins, and experienced sellers fight back. If you haven’t done your homework, it’s easy to make an error and get stuck with a losing deal.

Can I secure suitable financing for my plan?

Do you have your financial structure in place to move when the perfect deal beckons to you? Most investors learn early on that bank loans are too limited. Hard money lenders and private money lenders might charge excessive rates, but the speed and convenience offered by the alternatives make them attractive.

What Is my exit strategy?

Things are going to go wrong at some point. Some home flippers will accept a loss early to avoid throwing good money after bad. Others attempt to salvage a bad investment by turning it into a rental. A hard money cash out refinance could save you if you get into trouble.

We want to help you succeed. Contact us to discuss the best investment property loans California has to offer.

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