With an off plan investment, you do have to be sure to research every aspect of the property and location. You also want to be sure you are dealing with a reputable seller. If you are not familiar with architectural plans, be sure to have the plan analyzed by someone who can explain what everything means. Of course, the developer will do this to some extent, but you should also go over the plan with a disinterested party.
The best way to achieve objectivity is to collect as much information as possible. Every investor needs a systematic and disciplined approach to the investment process and must act in keeping with a grand plan of events.
Another important thing to remember in real estate investing is to keep your risks proportionate to your ability to absorb these risks. Make an investment only when you are financially capable of it. For instance, a person who is accumulating assets can take higher risks than, say, a retiree.
The seller asks for more money in exchange of flexing the terms. A Florida estate seller agreed to extend the payment schedule by 1o years in return of a higher sales price of ,000.
Leverage. Leverage, with regards to real estate invesment, is the use of borrowed funds in order to purchase realty. This is done with anticipation that the purchased realty will boost the profit.
Option 2 – Private Property Sales. As stated above, you’re saving a lot of money and have complete freedom with regarding to marketing, showing the property, picking your offers and closing on your own terms. You’ll put in the hours and effort, but for the right seller it’s the way to go.
At the end of the 10 years, you sell the building for ,000,000. That may not seem like a great deal to some, but if you’ve already recovered your 0,000 in cash flow and paid down your mortgage by 0,000, you’re walking away from the closing with a check for 0,000 plus the 0,000 you already got back. My simple math may be wrong, but you more than doubled your money.
Using an investment-locator company will provide you with the benefit of having experts on your side. They can check out hundreds of properties and choose the best ones. “We do the appraisals, get opinions; you get a couple inches of research to review,” says Rice.