Real Estate Investing Facts

Real Estate Investing

Who You Need On Your Team

If you are going to be Investing in Real Estate, you will need to have a team of professionals by your side. This team will include a Real Estate Agent, Mortgage Broker, Title Company, Attorney, Tax Accountant and a good home inspector. If you have already accumulated a lot of debt consider seeking debt loans help before investing any of your own money.

You’re going to need access to the multiple listing service (MLS) which is a computer database of properties for sale. This is where your realtor comes in to play, as all realtors have access to the service. A Realtor will have knowledge of what investment properties are available in the area that you are looking in. They will also negotiate the price with the seller at the seller’s expense not yours.

A Mortgage Broker has access in most cases to over forty different lenders and their products which will include investor loans, sub-prime loans and commercial loans.

When you go to a traditional bank or credit union you are limited to the products that they offer. If you don’t fit their tight lending criteria, don’t let the door hit you on the way out. You’re headed down the street looking for another lender and another hit on your credit rating. Every time you fill out an application with a different lender your credit score is lowered. The fact that interest rates are credit score driven this prospect does not hold well for the consumer. A Mortgage Broker will only have to check your credit rating once and be able to summit the application to as many lenders as necessary.

A Title officer works for a title company and is a very important member of your team. A property can have a lot of clouds and liens against it, the owner may not even be aware of some of them. If you plan to gain control of a property without actually owning it like in a lease purchase on a property you will need to record a notice (or notice of interest) so the owner can’t refinance and over-encumber the property without you knowing. You don’t want them to try to sell it out from under you. Clouds and liens must be removed from the title before it can be passed onto a buyer. The title company will prepare a preliminary report for you free of charge in hope of the full reports that they will prepare at a later time. Title companies will also provide a list of Notices of Default of homeowners who are behind by three payments or more. Also a list of properties of non-occupied properties, which means the tax notice, is being sent to a different address. Properties like these are usually rentals or vacant.

Any time you are involved with legal paper work a Lawyer is mandatory. Don’t even think about not having a Lawyer on your team, enough said.

Make sure your Tax Accountant specializes in real estate. He/She will guide you with the various tax benefits that are available to you from being an owner of investment properties.

A good Home Inspector will be able to tell you what is wrong if anything, with the property. The fee that you pay is small in comparison if you find major problems after you purchase the property.

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