According to a survey conducted by BankRate Financial Security Index on July 19, 2016; consumers of all ages have chosen real estate as their preferred investment strategy for money they will not need for more than 10 years. Real estate is so appealing because it is a tangible investment that you can touch, see, and feel. Although, an investment done wrong could put you in the hole for a long time. Here are a couple steps to take to develop a risk minimization strategy and receive higher profits.
Make money the day you buy it. Buying a turnkey investment property at retail value enables you to generate a small return by just having the potential to rent it out. Instead, search for a real estate opportunity that needs work and has potential to build equity. A rehab or fixer-upper opportunity can range from work as simple as replacing countertops, carpet, and paint all the way to full gut renovation. You can start your investment with 10, 15, 20% equity day one giving you the ability to stomach market swings and cash in bigger profits the day you sell it. Not just that, the capital invested in this deal will also be less because you will not be paying retail for this type of property.
When and how to finance your deal. In metropolitan areas such as DC, the price of real estate is very steep. If your cash does not help cover your cost of acquisition and repair, don’t let that be the reason you delay what could be a great cash flow opportunity. Some banks can help you with renovation financing for a property that will become your primary residence; however, for an investment opportunity their guidelines will not work in your favor. That’s where we can step in and help.
When an opportunity is identified, we can help by financing your project, and in some cases help you pay for repairs. Once your project is completed, then you are ready to go to the bank to get the best rate you can in order to have the long term financing solution you need to help you reach your goals.
Real estate investing can be difficult, but when done right is very rewarding. Let us help you pursue the right project so you can enhance your investment portfolio. Here at Washington Capital Partners we are happy to help our customers succeed one deal at a time.