Before you jump into real estate investing, it's important to set up your real estate foundation development. This means studying the real estate market in your area and finding people you will need to work with (real estate agents, mortgage brokers, loan officers, repairmen, and so on). Set a firm foundation so when you see a great real estate opportunity, you can jump on it right away. These following seven steps can get you started on your real estate investing career:
(1) Fix your credit rating score. Your credit rating score can directly affect your ability to borrow money, so it literally pays to have good credit. If you have a poor credit rating, you can still invest in real estate. You just will have a tougher time getting a loan than someone with a better credit rating. The first step to fixing your credit rating is to pay off your credit card debts as much as possible because when banks see that you're making regular payments, they'll gradually boost your credit rating.
(2) Decide where to invest. You know your neighborhood better than any outsider, so that's the best place to start investing. If your neighborhood is getting worse, choose a nearby area where you believe the opportunities are better. Just make sure you start with the most promising area with real estate prices that you can comfortably afford.
(3) Build your investment team. You will need help from other people. You'll need and escrow officer or mortgage broker to help you apply for and process a loan. You'll need a real estate agent, who can often give you background information about a piece of property. You'll need an appraiser to tell you the value of the property. A home inspector can help you spot problems. An accountant to help with your taxes. An insurance agent to insure any properties you buy. An attorney who can advise you on legal matters and you will need a home improvement contractor.
(4) Get prequalified for a loan. Nothing is more frustrating than finding the perfect real estate opportunity but not having the money available to take advantage of it. That's why you should get prequalified for a loan so you know the maximum amount of money you could borrow from a bank.
(5) Apply for a home equity line of credit. If you own your own home, apply for a home quity line of credit. This will determine how much extra money you may have available. If you don't own a home, find someone who does and who would be willing to come together with you in real estate investing. Then find how much money they could borrow on their home equity.
(6) Find other sources of money. After you've identified how much money you can borrow through traditional sources, it's time to discover how much money you can borrow through nontraditional sources, such as friends or relatives. The more money you can access right away, the faster you can move when you spot a real estate bargain.
(7) Study how promissory notes work. Promissory notes are legal documents that let you borrow from other people. A promissory note is no different than a traditional bank loan. You will need a lawyer to help you write a promissory note. It's a valuable tool that can help you borrow money quickly from sources other than banks. The more you understand how promissory notes work, the more they can work to your benefit.
About the Author:
Colon Bolden is a full time internet marketer with a 2 x 2 Prosperity Formula. If you're still searching to create prosperity in your life, read more of 2 x 2 Prosperity Formula
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