The 1st Step To Buying MN Investment Property
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Anytime someone wants to begin investing in real estate, the first and most important thing to do is find out how much you can buy. Just like on a map, one needs to know where they are coming from before they can map where they are going. Once, you know how much property you can purchase you can choose what property or properties to purchase. |
The best way to do this is to find a good lender. You can literally walk into any bank and find a lender. However, that bank will only have its own mortgage products. If you walk into Wells Fargo, you will end up with a Wells Fargo loan if you walk into US Bank you'll end up with a US Bank loan. For a wider selection of mortgage products (i.e. loans) consider a mortgage broker. This is someone who shops all lenders and banks and will select the best mortgage product for you. If you'd like a recommendation of some local lenders. Simply contact me and I'll send you some names.
Once you choose the lender you prefer, you can start the process on the phone online or in person. The lender will need to know your Social Security number as well as other personal information. You should not give out your social security number too many lenders as each one will pull your credit report and every time you pull your credit report you will get a small ding to your credit score. If you happen to be at a crucial credit score that small ding could affect your interest rate and mortgage product that you qualify for.
This lender will then enter your information into his or her software program and tell you exactly what you qualify for, and when. Once you know this information, you can begin to look at properties in your price range. If you qualify for a large amount you can look at multiple properties or larger properties - perhaps even commercial if you have enough money for the larger down payment amount.
This is the time when you'll need a good realtor by your side. As you start looking at properties you may want their opinion as an investment. This is the reason is best to select a realtor who is also an investor and can analyze a good investment from a bad one. The same rule applies with lenders. Prefer lenders who were either investors themselves or work primarily with investors. They will be most familiar with the inns and outs of the investing game.
Keep in mind there is no one great to investment property. If your realtor is a good one, he or she will ask you about your own personal scenario as well as your goals, as everyone has a different timeline and set of goals. Some Minnesota real estate investors are merely preparing for retirement, some investors are setting up college funds for kids, and some investors are simply complementing their portfolio of stocks and bonds with real estate. There are many benefits to investing in real estate, so it is important to know why you are investing in real estate. You may be investing for monthly cash flow, tax benefits, or just long-term appreciation. Whatever your motivation your realtor should be able to find properties that fit your own needs and goals.
If you choose me as your realtor, I give you my word that that's exactly what I will work to do. Keep in mind different areas and different investments have different strengths and weaknesses. The areas that cash flow may not appreciate as well. The areas that appreciate strongly may not cash flow or even have high negative cash flow. Often there are areas of town that have strong monthly cash flow, but are balanced with other issues such as tenants in vagrancy issues.
Whatever your property choice just know that the first one is always the most difficult. Once you get that under your belt it's smooth sailing.
