Becoming A Real Estate Investor Taking Advantage Of The Hot Market Now

Becoming A Real Estate Investor Taking Advantage Of The Hot Market Now

With the current Denver real estate market being so seller driven, some are shying away from buying right now, while other buyers are flocking to the market looking for value.  While multiple offer situations are very common these days, someone that comes into the market looking at properties as an investment can find themselves with the opportunity to make big money!  

Becoming a real estate investor, looking to flip properties, or becoming a landlord requires a special mindset that is slightly different than the homebuyer looking for their primary residence.  An individual looking to invest needs to be patient, open minded, analytical and creative.  Investors are investing in their future; and while real estate can be terrific vehicle for financial gain; it needs to be done with an understanding of the risks.    

Investing in real estate requires a high level of ability to learn on the go, and quickly learn from mistakes.  Essential steps for an individual to understand about investing in real estate are:
1. The significance of time commitment.  While successful investors in the stock market may only spend a few hours a week studying their investments, a real estate investor will live their investment.   From finding and screening tenants as a landlord to working with contractors to upgrade fixtures and other personal property, an investors investment will become more of their home than their current home; especially as they learn the in and outs of what it takes to turn a profit.

The importance of having a great team around you.  When you are need of a contractor for painting, HVAC, plumbing, or landscaping you want to make sure you have someone who you can trust.  These people will become an extension of you and will directly affect how future tenants and other buyers perceive your brand.  A lot of investors go into the investment with the mindset that they will learn to fix things as they go wrong.  While learning the ins and outs of your investment and how to save on the bottom line is important, as you look to grow your investment portfolio that you can limit yourself if you try to do everything.

Research, Research, Research.   The last thing an investor wants to do is just buy to buy, because it was, what they thought, was a good price.  Using a realtor can help an investor in understanding the comps in the neighborhood, future commercial impact of the community, costs of necessary renovations, and resale value.  All of these are tremendously important when it comes to considering estimated profit in an investment.

Mortgage Rates and Credit.  While always important when working with lenders, the credit for an investor is crucial.  The home buying process for a family is an emotional experience, while the home buying process for an investor is all about numbers.  When it comes to numbers the higher the credit score, the better the interest rate and loan the investor can obtain.  Even more so important, especially to the first time investor, every dollar is crucial so cleaning up the credit to reflect a maximum of 30% debt to credit ratio and a credit score of over 740 can save thousands of dollars at the end of a transaction.  

All in all the Denver real estate market is one that can turn profit for investors.  Many people say that if it were easy, everyone would do it.  Keep that in mind because investing in real estate is not easy, but can provide tremendous financial stability for the future when done right.

  Michael Kane is a Broker Associate at Keller Williams. He is a member of the Carr Peck & Associates team that is recognized locally and nationally as in expert in real estate. Locally he is a member of the Denver Metro Association of Realtors.  Nothing brings him more joy than making his client’s dreams become a reality!  For more information feel free to 
contact him or call 303-717-9284.

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Phone: 720-446-6301
Dated: July 7th 2014
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