How to Find Funding for Your First Investment Property

How to Find Funding for Your First Investment Property?

If you've never invested in real estate before and you're thinking about buying your first property and you want to know how should you start, where should you begin?  Then,  this video is for you! 

There's a lot to consider when you're getting ready to buy your first investment property and hopefully, you've taken the time to watch some of my other videos that are going to give you some really good ideas of you know things that you might want to think about before buying a rental property.

Really the first thing that you probably should be doing is speaking with a lender and seeing what you might qualify for you hopefully already own your own primary residence if you don't own a primary residence I would start there before investing in real estate the reason why I would start there is because you can buy it with much less money down and buy a house that you could eventually turn into a rental buy a house two years later turn it into a rental we call that house hacking and then you can do that over and over again before you know it you might own five or six properties that just used to be your primary residence so. It's a really great way to begin investing in real estate if you already own your primary residence and you don't want to move and you've got a little bit of extra money put aside and you want to buy an actual you know investment property then what do you do the first step is going to be to speak to a lender find out what amount you might be able to qualify for now when you're buying investment property the amount you qualify for might be irrelevant just because you qualify for a million dollars doesn't mean you're going to spend that it'd be pretty foolish to buy your first investment property at least in Arizona I can't speak for other markets but it probably that might not make sense to spend a million dollars on your first investment property it might make sense to buy multiple investment properties if you can qualify for that much of a loan so figuring out what you can qualify for and figuring out your down payment usually when you're buying a property as an investment you're going to need 20% down.

if you're buying it as a second home you might be able to do 10% down there are also some other loans that have unique programs or you can put as little as 10% or 15% percent down but those programs often have a catch like a balloon payment that might be due in 10 or 15 years or some other strange terms if you want a normal 30-year fixed-rate mortgage on an investment property you're usually going to need 20 down on the property and if you can swing 25 well heck that's just going to improve your cash flow position and it gets you a slight break in the interest rate so I know on my first couple of investment properties I did put 25% down on them so that's something to consider talk to the lender about and figure out what situation is right for you.

Next, speak to a real estate professional hopefully me, about where you're thinking about buying and let's talk about what is the market doing in that area how much can we expect to see in equity returns and what are cash flows going to look like in that area there's a lot of places where you can buy a really really great home that's probably going to go up a lot in value but it's probably not going to produce a ton of cash flow especially when you consider vacancy maintenance and management so it might make sense to buy in that area if you're only interested in equity gains but it also might make sense to invest somewhere else where you can buy a house you get the gain in equity and you get the positive cash flow and i study that in the markets all the time i'm personally interested in investing in areas that i think produce good cash flow and are going to be going up a lot in value over the next year and i'd be happy to have a deeper conversation with you about what areas those are,  what areas i'm investing in and see if it's something that you're interested in as well.

What does this mean to you? If you're even a little bit interested in learning more about participating in the Phoenix housing market as a seller, buyer, or investor... you NEED to know this stuff! Or at least work with someone who is obsessed with the market stats. Reach out to me today so we can start working on making your real estate dreams a reality!

 

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