Real Estate Investing Bundle: Rental Property Guide, No Money Down & Long-Distance Investing, How to Flip & Rehab Houses, Property Wholesaling for Beginners, and Commercial Real Estate & Apartments

By Spencer Williams

Maximize your passive earnings with this powerful real estate investment bundle.

 

Do you want to make money using the lucrative real estate market? Not sure where to begin? Then this is the book for you!

 

Written with the beginner in mind, this incredible bundle has everything you need to succeed in the real estate market! Whether you've tried investing before or you've never even thought of it, now you can begin making money with real estate regardless of experience – and even if you have no money to invest!

 

This bundle contains a whopping five separate books, from Real Estate Investing 101 to guides on successfully investing in commercial and long-distance properties. With house-flipping, financial advice, investing strategies and more, it's never been easier to make money using real estate!

 

Inside this comprehensive investing bundle, you'll discover:

 

• Why You Should Be Investing in Real Estate NOW
• How to Finance Your Investment Property
• Strategies For The Best Real Estate Investments
• The Taxes, Deductions, and Finances You Should Know
• How to Fix and Flip a Property (And Make Money Doing It)
• Investing With No Money Down
• How to Master Long Distance Investing
• Common Investing Mistakes To Avoid!
• How to Succeed With Commercial Investing
• And So Much More!

 

Containing vital, must-read advice about everything real estate, this bundle is your ticket to breaking into the investing market and generating passive income today! From understanding how to select, buy, and flip properties, to the best investment strategies and maximizing your finances, now you can harness the power of real estate investment while avoiding costly mistakes.

 

Buy now to join the countless people benefitting from this lucrative market today!

• Language: English
• Publisher: Spencer Williams
• Release date: Jun 12, 2020
• ISBN: 9781393175667

Book preview

Real Estate Investing Bundle

Rental Property Guide, No Money Down & Long-Distance Investing, How to Flip & Rehab Houses, Property Wholesaling for Beginners, and Commercial Real Estate & Apartments

By Spencer Williams

© Copyright 2019 - All rights reserved.

The content contained within this book may not be reproduced, duplicated or transmitted without direct written permission from the author or the publisher.

Under no circumstances will any blame or legal responsibility be held against the publisher, or author, for any damages, reparation, or monetary loss due to the information contained within this book. Either directly or indirectly.

Legal Notice:

This book is copyright protected. This book is only for personal use. You cannot amend, distribute, sell, use, quote or paraphrase any part, or the content within this book, without the consent of the author or publisher.

Disclaimer Notice:

Please note the information contained within this document is for educational and entertainment purposes only. All effort has been executed to present accurate, up to date, and reliable, complete information. No warranties of any kind are declared or implied. Readers acknowledge that the author is not engaging in the rendering of legal, financial, medical or professional advice. The content within this book has been derived from various sources. Please consult a licensed professional before attempting any techniques outlined in this book.

By reading this document, the reader agrees that under no circumstances is the author responsible for any losses, direct or indirect, which are incurred as a result of the use of information contained within this document, including, but not limited to, — errors, omissions, or inaccuracies.

Rental Property Investing Step-by-Step Guide

Table Of Contents

Introduction

Chapter 1: Why Invest in Rental Properties?

A Lifetime Investment

The Advantage of Leveraging Your Money

Monthly Cash Flows to Enjoy

Growing Demand for Housing

Ability to Hustle for Higher Returns

Tax Benefits

Mortgage Payments Done for You

Rental Property Appreciation

Low Startup Costs

A Cushion Against Inflation

Chapter 2: Financing Your Rental Property Investment Idea

Using Leverage

Mortgage Loan

Conventional Bank Loans

Fix and Flip Loans

Home Equity Loans

Private Lenders

Real Estate Partnership

Seller Financing

Chapter 3: Tips to Successfully Finance Your Property Investment Idea

Pay Your Debts

Save Money for Future Downpayment

Outline Your Plan

Rely on Local Financing

Seek Seller Financing

Chapter 4: Beginners Checklist When Investing in Rental Properties

Invest Your Time in Research

Know Your Budget

Choosing the Best Location

Choosing an Ideal Realtor

Find a Working Management Strategy

Think Over Your Financing Strategy

Chapter 5: Rental Property Analysis

Location

Rental Strategy

Type of Rental Property

Type of Tenants to Target

Cash Flow and Rental Income

Vacancy and Occupancy Rates

Cap Rate

Comparative Market Analysis

Chapter 6: Building Your Team

Tax Advisor

Mentor

Certified Public Accountant

Real Estate Lawyer

Lender

Insurance Agent

Contractor Handyman

Appraiser

Property Manager

Family and Friends

Chapter 7: Strategies for Finding Good Rental Property Deals

Begin Your Search on Online Property Finders

Market Research

Communicate With Other People

Buy Foreclosed Properties

Be The First Buyer

Browse Through Many Deals

Real Estate Auctions

Rely on Experts

Unique Attributes

Listings

Chapter 8: Guide to Maximizing Cash Flows in Rental Property Investing

What is Cash Flow

Increasing Rent

Reduce Rental Expenses

Income from Other Sources

Choose Good Tenants

Be Proactive

Limit the Vacancy Rate

Take Advantage of Tax Deductions

Choosing the Right Neighborhood

Chapter 9: Benefiting From Foreclosures

Understanding the Foreclosure Process

Study the Neighborhood

Stay Away From Abandoned Houses

Go For HUD Houses

Budget Carefully

Expect Complications

Consider Paying for Inspection

Chapter 10: Maximizing Returns from Fix and Flip

Flipping Properties Defined

Why Flip Properties?

Tips to Successfully Flip Properties

Mistakes to Avoid When Flipping Properties

Rental Property Vs Flipping Houses

Chapter 11: Rental Property Management

Rental Property Preparation

Determining the Rent

Advertising Your Rental Properties

Choosing Your Tenants

Transparency With Charges

Dealing With Pets in Your Property

Communication With Tenants

Collecting Rent

Dealing With Naughty Tenants

Maintaining Your Rental Properties

Protecting Your Investment

Chapter 12: Guide To Finding The Right Property Manager

Begin By Asking for Referrals

Do Research

Do Expand Your Search

Confirm Licenses and Certifications

Set Clear Expectations

Communication is Key

How Much Do They Charge?

Are They Landlords?

Ability to Conduct Routine Checks

Chapter 13: Common Challenges Faced in Rental Property Investing

Lack of Experience

Qualifying For Financing

Finding Properties

Blending With a Realtor

Managing the Rental Properties

Vacancy

Time Constraint

Estimating Required Repairs

Collecting Rent

Dealing With Problematic Tenants

Market Fluctuations

Chapter 14: Negotiating Real Estate Deals

Research

Never Walk Alone

Negotiate Properties with High Demand

Have Several Leads

Negotiate in Person

Don’t Be Emotional

Stick to Your Budget

End on A Good Note

Chapter 15: Closing a Real Estate Deal

Start By Opening an Escrow

Carry Out A Title Search

Work With A Real Estate Lawyer

Bargain Junk Fees

Home Inspection

Further Negotiations

Final Walkthrough

Finally, Sign the Papers

Chapter 16: More Secrets on Profitable Investing

Invest in Low Priced Areas

Emerging Growth Locations

Entice Tenants With Amazing Offers

Understand Your Competition

Get Good Tenants

Final Thoughts

Bibliography

Introduction

People have always been on the move trying to increase their net worth with everything that they can leverage. Holding liquid assets has never been ideal security; cash can easily be spent and therefore, it leaves one without possibility for future profit. In most cases, people strive to attain their financial goals. Those that work for wages try their best to save for retirement. However, the main goal that most people seek in their lives is long-term investments which turnover greater profits. With recent harsh economic times, it has become part of the nature of the workingman to consider the future of our families. An investment might not benefit you directly or immediately but if there is a guarantee that it will benefit your family in the future, it is worth the investment. Simply stated, real estate investing is the best way to invest your money for both immediate and in long-term profit.

Most people are rushing to invest in real estate because of the staying power that it holds. Assuming that you invest in a peaceful environment, your money will be preserved for a long time to come. There are countless other investment opportunities out there to be taken advantage of. Whether you choose to invest in stocks, mutual funds, and commodities or simply in a savings account, you will, in one form or another, be setting aside your money for future use. However, there is a certain slaying power in choosing to invest real estate over other alternatives.

Consider the booming population globally. What does this mean for real estate investment? Demand is already high and has nowhere to go but up; residential demand will be meeting and surpassing supply for decades to come. If you deliver the right product to them, rest assured that you will succeed in the real estate business. Of course, this does not mean that there are no challenges with rental property investment. There are other economic factors that will affect how you invest in the market beyond just supply and demand. This requires that you first study the ins and outs of rental property investing before jumping into the moving wagon.

The key to emerging successful in rental property investing is the right knowledge of the business. This is, of course, what most entrepreneurs invest in. You cannot begin any business without first understanding what the business is all about. The knowledge that you acquire about rental property investing warrants that you easily take advantage of opportunities in the market. Equally, it also aids in making sure that you circumvent possible challenges in the real estate market. In the end, you will enjoy the experience gained as much as your profits once your investments fall into place.

Just to be sure that you are convinced about the journey that you are about to take in rental property investing, let’s walk through a few benefits that will come your way. Of course, one of the main motivating reasons behind rental property investing is the idea of becoming your own boss. Whether you choose to work part time or full time, all decisions will be reliant on you. You have full autonomy over your work schedule. Secondly, with the constantly growing demand for rental properties, you can be sure that your properties will appreciate annually. If you have been in real estate business in the past, you can attest to the fact that your property is worth more than what you initially bought. Further, with rental property investing, you can also force appreciation on your assets through renovations and flipping the property for further profit. A property that was once undervalued could be highly valued once renovated.

When we consider the financial challenge sthat most business people face, investing in rental real estate could be the ultimate solution to establishing a full-fledged business. A significant hindrance to most business startups is that they lack sufficient capital. Rental property investing is quite the opposite. You can begin investing without any money. Whether or not you have money saved somewhere, you can still invest in real estates. More on the financing options that you have at your disposal will be discussed in this material. The point here is that startup capital will not hinder you from investing in rental properties.

A peek into rental property investing shows that this is a business option that will make your financial dreams come true. Don’t just accept the hype that is roaming around in the market as proof, go ahead and get your feet wet by learning more about how lucrative rental real estate can be. If you invest in learning, you will realize that you have more potential than you once thought. The only regret you will have after learning more about this business will be that you didn’t invest sooner. We’re always told that it’s never too late, so without further ado, let’s dive into the world of real estate.

This manual will take you through what you need to know about investing in rental properties. You will understand how to find good deals in the market, evaluate properties, secure your capital, and manage your tenants. If you have been planning to put your money in real estate business, then this is the eBook that will guide you throughout this journey. There is a lot that you need to know, but with this manual, you will experience the excitementof knowing that you can invest your money in a promising business.

Chapter 1: Why Invest in Rental Properties?

Before investing in any type of business, a businessperson will want to consider the benefits that they gain from the business that they would be entering into. This comparison of risk and profit is a crucial step that should not be overlooked. By knowing what you are about to invest in, you are better presented to make the right decisions about the particular business. In line with investing in rental properties, you must have questioned yourself, what’s in it for me? Certainly, there are different investment options in the market. But why should you invest in rental properties at all? What makes rental properties an ideal choice for your investment?

The new investor in real estate business wants to know whether they are making all the right decisions with investments. It is for this reason that this chapter will get into detail about the main reasons why investing in rental properties is a good move. From the information discussed herein, you will be motivated to purchase rental properties with the right attitude in mind.

A Lifetime Investment

Investors that have been in business for a long time would argue that property investment is one of the wisest investments. The main benefit gained in property investment is the longevity of profits. With the right management, you can be sure that you will be earning money from your asset for years to come. Renters will always flock to a property that is appropriately situated and well maintained.

The Advantage of Leveraging Your Money

Most individuals will want to invest in real estates because of the numerous financing options that they can utilize. When investing in rental properties, you can easily take advantage of the leverage financing option. This means that with little capital, you can proceed with your goal of purchasing properties in the market. Leverage takes into consideration the property’s worth and the amount of money you can borrow. You don’t have to obtain the full amount of capital required to purchase a rental property. With leverage, you only need to raise a fraction of the entire amount up front (How Rental Property Financing Gives You Investment Leverage, n.d.).

A new investor in this type of business should take advantage of leverage in order to maximize their investment potential in the market. Say you have $40,000 cash. There are three things that you can do with this money: all three will yeild considerable profit, but one option will significantly more profitable than the other two.

First, you can choose to purchase a property worth $40,000. With this alternative, you will be utilizing 0% leverage on your investment. Alternatively, you can use the $40,000 cash to purchase property worth $80,000. This option will work like a mortgage loan, and you will be utilizing 50% leverage. The third option is to invest in a rental property worth $160,000 with the same amount of cash money you have. Here, you will have borrowed $120,000 to finance your project, utiilizing 75% leverage.

Considering this comparison, which of the three options would you pursue? Undeniably, either the second or third option is the favorable investment as you maximize your future profits by maximizing leverage. It is important to note that utilizing leverage works best when property values in the market are rising (How Rental Property Financing Gives You Investment Leverage, n.d.). Consequently, depending on the appreciation rate, you will earn higher returns if you settle for one of the two high-leverage options.

Monthly Cash Flows to Enjoy

Entrepreneurs are primarily motivated by the goal of earning future profits from the businesses that they establish. Consistently high ROI, or return on investment, gained through property investment appeals to most investors in the market and is a good indicator that the real estate business is thriving.

One of the most beneficial advantages about consistent cash flows in property investments is that the profits can be invested back into the property, generating more future cash flows. Compounding the cash flows with rental income on your property should be more than enough to cover any existing mortgage and taxes on the property with a handsome profit on top for your own pocket.

It is important to note that an entrepreneur will be enjoying the monthly cash flows only if they invest in desirable properties that consistently generate positive cash flows. A huge part of this decision comes down to the location for profitable assets, a factor that is always changing due to inconsistent market conditions. More on this will be discussed in detail in subsequent chapters.

Growing Demand for Housing

It is an obvious fact that the population is growing at an alarming rate. A real estate investor taps into this and turns it to his or her advantage. With increasing population, demand for housing will rise steadily for years to come. The higher the demand, the higher the rental rates that you will be earning from your tenants. Considering this, there is minimal chance of failure when one invests in the right rental properties.

Ability to Hustle for Higher Returns

With rental properties you also have the ability to choose to increase your returns anytime you wish. How is this possible? Flipping property. If your property can be renovated, you can easily get higher returns by doing so.

Tax Benefits

Many entrepreneurs choose to invest in the real estate business because of the tax benefits they enjoy in the form of exemptions (Daibes, 2017). The rental income that an investor receives, for example, is not taxed as self-employment tax. Other payments that can be written off include:

Mortgage interest

Insurance

Maintenance repairs

Travel expenses

There is a lot to learn with regards to the tax benefits that a real estate investor should be aware of. A breakdown of the tax benefits they are likely to be important in your journey of rental real estate investment is reviewed in the following sections.

Deductions

The main tax benefits that you will enjoy as an investor is in the form of deductions. As previously mentioned, costs that will be subject to deductions include property tax, mortgage interest, operating expenses, repairs and several others.

It may be hard to believe that even repairs are considered eligible for tax write-off but because they help in ensuring that a property remains in the best condition, they are considered deductible costs. Considering the number of regular repairs a property may need such as replacing broken parts, fixing leaks, painting, etc, you, as the owner, can save a great deal from tax benefits.

Capital Gains

Real estate investors also enjoy tax deductions from the profits they gain when selling their properties. Capital gains refer to the proceeds that homeowners acquire after selling their assets (Esajian, n.d.). This could include commercial asset, rental, industrial, or residential asset. It is important to note that capital gains could be taxed in two ways. It could be taxed either through short-term capital gains or through long-term capital gains. Long-term capital gains are what investors should take advantage of. Here, an investor can be taxed a lower amount than they expected.

Depreciation

With time, rental properties will suffer wear and tear. Fortunately for rental property investors, they can benefit from the depreciation that their assets will be facing. In essence, the tax benefits here would be that they would deduct the depreciation of their properties annually. You should understand that your properties would depreciate regardless of the positive cash flow that you might get. Therefore, it doesn’t matter whether you get higher returns from your property or not. The long-term benefit gained through depreciation is that an investor could easily save money annually.

As an entrepreneur planning to invest in real estate, it is imperative that you equip yourself with knowledge concerning tax benefits in owning a rental property. There are numerous benefits for you to enjoy. You only need to understand those that are at your disposal and how to exploit them. Remember, owning a rental property is a long-term investment. As such, it makes sense if you researched on innovative ways of saving money annually.

Mortgage Payments Done for You

Besides feeling confident that you will own properties for a long time to come, you should also consider your tenants as a blessing in disguise. Assuming that you sought out financial help to invest in your rental properties, you will need to pay your loan interest monthly. The rental income that you get from them will be more than enough to cover for this expense. Essentially, you will not be digging back to your pockets to pay your mortgage. This is a setup that works in your favor and as such, you should be mindful of the importance of making sure that your tenants are happy and comfortable. More on managing your tenants will be discussed in detail later in this material.

Rental Property Appreciation

In line with the advantage of leveraging your rental property investment, you can also benefit from the fact that the assets will appreciate annually. High market demand for houses will certainly impact the appreciation rate. As the real estate market grows, it also means that your properties will appreciate in value. To clearly understand how this is possible, consider an individual that purchases a home 10 years ago. Clearly, this property will not be of the same value in 10 years time due to appreciation. Year after year, you can be certain that you will be receiving a small fraction of appreciation from your asset. Forced appreciation is also applicable here. You can get the best price for your asset through renovations. Generally, you will be giving your rental properties the market face that will make it appealing in the market. Consequently, there is a high probability of gaining considerable profits from it.

Low Startup Costs

The beauty of investing in rental properties is that you can start from anywhere. There are prudent investors in the market who enter the business with no capital of their own. What they do is that they make good use of the financial options that they have at their disposal. There are numerous investors who have money but they don’t know where to put it. In fact, most fear losing so much that they rob themselves of the opportunity of significant profit. Therefore, they are often afraid to invest in real estate. You could also seek finances from people around you. It won’t break a bone to ask them whether they are interested in investing in this type of business. If you take your time to research, you will be surprised at the many financing options that you can utilize to break into the real estate business.

A Cushion Against Inflation

If you are running any business, you will be well aware that inflation has significant negative impact on your business. Rising prices due to inflation push people away from brands. Consequently, inflation could highly likely affect the revenues for a business. With rental properties, inflation will be your friend more so in terms of the rental prices you will charge. Inflation will force the real estate market to increase its prices for houses. Being a landlord, you will also benefit from this. Your real estate business will not suffer from inflation effects that could hinder the successful running of businesses.

With these benefits, you should be motivated that you will be benefiting in a great way by investing in rental properties. You might be thinking that the business is flooded with investors. Well, you’re wrong. In fact, there is a constant growing demand for housing that investors in the market have not yet met. As such, you can be sure that you will not go wrong if you choose to invest in rental properties. What’s more, from the information discussed, there are tax benefits, property appreciation and other advantages for you to enjoy. Simply put, there is chest full of treasure for you to boost your wealth from real estate business.

Chapter 2: Financing Your Rental Property:

An Investment Idea

So, you’ve thought hard about the idea of investing in rental properties but the main issue that lies unsolved is where you will get the finances necessary to begin the investment. Most investors give up on their dreams just because they lack capital to initiate their real estate business. To make matters worse, they believe the myth that real estate investing requires a lot of capital. The previous chapter looked into the advantage of low startup costs. You can start investing in real estate without capital of your own. In other words, you can begin investing in this business without any money. To do this, you need to have mastered the financing options that you can turn to in the market. This section will dive in to find answers into the question, what are the different financing options of purchasing a rental property?

Through this analysis, you will know the different ways in which you can purchase a rental property, more so when you don’t have the full amount of capital required. Before getting into detail, you should get it clear that settling for the best financing option is what you should strive to do. The mere fact that you can ask for a loan from banks doesn’t mean that it is the best alternative for you. Consider its viability in the long run. Don’t go for a financing option that will weaken your financial muscles in the future.

Using Leverage

Experienced real estate investors will choose to invest in real estate business because of the advantage of utilizing leverage (Hemani, 2018). Even if you only have a small amount of money available for investment, it can be utilized to purchase a large asset. The importance of having this information at your fingertips is that you will be better placed to make the right investment decision. You can do so by maximizing leverage with a mortgage instead of paying for your property in cash. With leverage, you will purchase a larger asset that is worth more than what you would have bought in cash. The power of leverage goes hand in hand with the notion of property appreciation. As such, before deciding to use leverage to finance your investment, it is vital to find out whether the market growth favors the idea of leveraging.

If you were investing in a market where the rental rates are declining, pursuing maximization of leverage would not be the best idea. The same case applies for stagnating markets. It is for this very reason that you are strongly advised to research about your preferred market before fully investing in it.

Your investment strategy will also be a determinant factor when choosing whether or not to use leverage. Take time to contemplate on whether you are investing for short or long-term benefits. If you are doing this for the short-term gains, you should be aware of the factors that will signal you it’s time to exit. Those who choose to invest for long-term gains should develop strategies that will help counter possible challenges that could arise.

When utilizing leverage, keep the following pointers in mind:

Be Conservative

Your market research might have signaled you that property values have been on a steady rise for the past two years. A sage real estate investor should know that this could easily change in the following years. Therefore, you should not rush to leverage your investment because the previous years have been lucrative. Real estate market trends change. Consequently, you should not set high expectations that things will favor you. Embrace the idea of lowering your expectations, as this will give you a reason to be happy when good returns come your way.

Settle For A Reasonable Plan

At times, the idea of being a landlord can be overwhelming for newbies in the real estate business. At some point, you might lose track of the mundane issues that you need to attend to. Also, there is the possibility of overlooking things that are important. When choosing how much to leverage, you should settle for a reasonable plan that you are comfortable with. Don’t choose a plan that will strain you down the road. The last thing you need when you are a landlord is to incur expenses that you cannot comfortably manage.

Using leverage to finance your investment idea is one of the best ways of increasing your net worth. Fortunately, this is also something that you don’t need to decide on your own. There are tons of real estate experts that could help you make wise choices on how you should leverage your investment. Thus, it is crucial that you seek professional assistance where necessary.

Mortgage Loan

Getting a mortgage loan is a financing option that most investors are well aware of. Simply stated, this is a bank loan that requires the investor to set aside some amount as down payment (Hamed, 2018). Depending on your lender, they will require a certain percentage of the cost of the property as down payment. Therefore, it is important that you talk to your local lender before considering this financing option.

Is getting a mortgage the best way of financing your real estate business? Well, the answer to this question is a big YES. However, before making any hasty decisions, you should know that there are numerous benefits of paying for your property in cash. Clearly, when you choose to pay in cash, you will not worry about loan repayments. Moreover, you will save the money that you would have paid as interest. The idea of paying in cash is also advantageous to a buyer seeking to invest in a competitive market. A seller would consider a buyer willing to pay in cash as compared to one that would pay using bank loans. Besides, paying in cash frees one from the headache they would have gone through if they opted to rely on banks and other financing institutions.

In spite of the benefits that you get when paying for your property in cash, it is always difficult to get the right amount of capital in cash. Therefore, applying for a mortgage could be the best option for you. There are several benefits of using mortgage to finance your investment, including the following:

Affordable Property Investment

When your credit score ratings are good, you will always find it easy to acquire a mortgage loan. This is not the best thing about this investment option. Essentially, getting a mortgage loan makes the entire investment affordable. When relying on this type of loan, you simply need to pay a small percentage of the property value instead of the entire capital amount.

Cost Effectiveness

When you choose to pay for your investment in cash, there is likelihood that you will be depleting your life’s savings. There’s no need for you to strain yourself. A cost-effective option for you would be to pay the downpayment and secure your savings.

Tax Benefits Associated with Rental Properties

Earlier on, we had mentioned the tax benefits you receive when investing in rental properties. The associated tax deductions should motivate you to rely on mortgage financing. You could take advantage of writing off the interests charged on your loan. This means that you will be saving a great deal when you finance your investment with mortgage loans.

Mortgage Payments covered by Tenants’ Rent

Don’t underestimate the benefit of your tenants’ ongoing rent as it will be there to offset the property’s  mortgage. The only thing that you need to do is to make sure that the renters are always happy. The monthly payments you get from your tenants will be enough to pay for monthly interests and still be left with change. This is the most exciting thing about relying on mortgage as your ideal financing option.

So, do you still think that taking on a mortgage is a burden for you? Probably not! Taking advantage of this financing option will help you avoid using all your savings to invest in real estate.

Conventional Bank Loans

Conventional bank loans are the normal loans that you acquire from your local banks. Banks consider your credit score before offering you loans. Hence, you should mull over paying off your debts months before you visit the bank requesting for financial help. There are other considerations that the bank will have to reflect on before giving you the loan you require. The bank will query about your occupation. There are certain occupations that a bank will prefer over others. For instance, it would prefer to lend to those who are employed by the government over private firms.

Equally, don’t be surprised when the bank disqualifies your loan application due to your age. Age is an essential consideration as it proves to the bank that you are financially stable. The best age group that would be highly considered is 30 to 50 years old (Business Today, 2017). If you are married, your eligibility will increase as the bank assumes that you will work together to pay off the prospective loan.

The repayment period will also have an impact on the decision that the bank will take. If you are confident in your monthly income, you will more likely be prepared to settle for a shorter repayment period. This will not only save you some money but it will also increase the chances of getting your loan application approved.

Of course, the purpose of the loan will also be an important thing that the bank will want to know. Your answer should convince them that your reasons for taking the loan are viable. Certainly, you cannot just apply for a loan without knowing why you want it. Be prepared to convince the bank that you have done your research on real estate business and that you know what you are doing. Without this, there is a probability that the bank will hesitate to offer you the loan.

Fix and Flip Loans

Owning a rental property is indeed a dream come true to most entrepreneurs. However, this does not mean that there are no challenges associated with such ownership. Most landlords will attest to the fact that property management is not an easy task. Due to the challenges associated with buying and holding properties for a long period, some investors could opt for fixing and flipping of properties. You will be investing in rental properties, but your main focus will be on fixing the properties and selling them for profit. It is an ideal alternative for investors looking to make quick cash in the real estate business. If this is the investment path that you have been considering, then fix and flip loans will be an ideal choice for you.

Fix and flip loans are short-term loans offered by lenders to entrepreneurs who buy properties with the intentions of fixing and reselling them for quick profit. These are the type of loans that hard moneylenders would majorly specialize in as they are paid back within a short period (Hamed, 2018).

The advantage of using fix and flip loans is that they are easy to acquire. As mentioned, these loans are similar to hard money loans. Therefore, lenders will not require much from the investors for them to qualify. For instance, your credit score will not even affect your eligibility.

Home Equity Loans

Did you know that you could also get some extra cash with the home that you already own? Most homeowners are unaware of this. At times, when you lack other financing options, you can turn to the property that you already own. With the growing market of real estates, the prices for homes continue to rise. This means that you could easily turn your property into a reliable source of capital. However, it is worth noting that this is an investment decision that should be done cautiously. Any mistakes here will risk you losing your home.

Here is a look at the pros of using your home as a source of capital:

Fixed Rates

One of the main reasons why most people would go for home equity loans is because of their fixed interest rates (Home Equity Loans, n.d.). The interest rate is usually fixed for the number of years that you will be paying off the loan. To an investor, they get to plan for a flexible way of paying the loan monthly without worrying about any inconveniences that could arise. A fixed interest rate is admirable because one is not affected by changing economic trends. Therefore, budgeting for monthly payments becomes relatively easy and straightforward.

Tax Deduction

You will also be eligible for tax deductions if the loan you acquired was mainly used for renovations. It is always advisable to work with a tax professional to ensure that you don’t miss out on such deductions.

Lump Sum

Home equity loans are also desirable because the investor would be given the borrowed amount in a lump sum. This implies that one can easily cover large expenses in their real estate business.

Regardless of the associated benefits of home equity loans, it is not all so simple. There are risks associated with relying on this financial option. First, the loan would simply be an additional loan that you will need to pay. If you are not careful with how you budget the lump sum that you receive, you might end up using the money for other miscellaneous expenses. Moreover, the biggest risk that you will be facing is that of losing a house that you use as your home. To be safe, always make sure that you pay your monthly repayments on time.

Private Lenders

Private lenders are the people that you consider friends or relatives. They can also be your co-workers. Bearing in mind that these people are close to you, there are minimal formalities involved when getting financial help from them. The interest rates are also contingent on the relationship that you share with the lenders. There are those friends who would lend you money without charging you any interest. Unfortunately, such friends are rare these days. The loan repayment terms are also negotiable. Charity begins at home. As such, you might want to ask your friends and relatives for financial support before going out to ask banks and other lending bodies.

Real Estate Partnership

The process of financing your investment could also be made easier if you found a partner to work with. Maybe you are thinking that this would be an easy process because you have friends that you can work with. Well, in some cases, it is imperative to be cautious when choosing your real estate investment partner. You should be careful to find out whether your partner has similar investment objectives as you. Perhaps they are looking for a quick fix to their financial problems. Be sure to get into the real estate business with an individual that will not leave you hanging. If you are looking to benefit from your investment over the long haul, consider working with someone with the same goals. You should also confirm that the individual you choose to work with has an admirable personality. Most importantly, work with someone that will challenge you to work harder.

Seller Financing

As the name suggests, this is a financing option where the seller of the property gives you the financial help that you require. The owner of the property will act like a financial institution. Therefore, they will offer you the mortgage loan to finance your investment. This form of financing is also termed as owner financing (Kagan, 2019). Often, this type of financing is best used when you have a poor credit score rating. The advantage of relying on this financing option is that it is more flexible as compared to getting a loan from the bank. The seller of the property might accept the little amount that you have as down payment. Both the seller and the buyer benefit from seller financing. From the seller’s perspective, they find it easy to sell their properties when they finance the buyers. The main issue with seller financing is the high interest rates that they might impose on a buyer. Thus, you should be careful to compare options before working with any homeowner.

The different financing options discussed herein reveal the fact that investing in rental properties is an idea worth investigating. With the right financial plan, it is a straightforward process that will significantly increase your wealth. The exciting aspect of this form of investment is that with little capital you can leverage and invest in an asset that is worth more. Accordingly, you end up increasing the likelihood of getting higher returns from the real estate business. Remember the fact that you can always turn to friends and relatives for financial assistance. Before visiting your local bank with your loan application, consider talking to friends and relatives about your investment proposal. Still, it is always advisable to consult with financial experts before making any decision to cushion you from possible dire financial mistakes.

Chapter 3: Tips to Successfully Finance Your Property Investment

Successfully investing in rental properties will largely depend on how you balance the finances that you have. Most investors have the money to invest in this type of business. However, they end up making mistakes when trying to balance how they manage their finances. A motivational factor that would convince one to invest in real estate is the fact that with little capital, anyone can work towards achieving the financial stability that they have always dreamt of. But all this is not possible if you make financial mistakes along the way. For example, say you apply for a loan that will affect you in the long-run, this means that you might not succeed in the real estate business as you could give up following your financial dilemmas.

This chapter will consider some of the mundane financial factors that are often overlooked by real estate investors. An in-depth understanding of these factors will make certain that you make sound decisions from the start. Ultimately, you will enjoy the experience of investing in properties with confidence in