Making a Home Purchase Your Best Investment
Buying a home might be the biggest investment you will ever make. Whether buying your own home, or one for you and your family, it is important to understand what makes a good investment property and have a plan before you buy.
A home buyer will have a far more likely chance of making a successful investment if they go into the deal having a plan and knowing a few basics about real estate. In this article I want to give you a few basic fundamentals of real estate to get you on the right track for your next home purchase.
A few things you’ll want to do:
• Look for “don’t wanters”: This is a Seller who wants to get rid of the property as soon as possible and will be very flexible when it comes time to negotiate price and terms.
This person might be going through a divorce, experiencing a job transfer, or they might be settling an estate. Whatever the reason might be they are motivated to sell quickly and they are usually willing to give you a good deal.
How does one find a “don’t wanter?” The answer is look long and hard. Be patient. You may have to talk with dozens of sellers before you find one “don’t wanter”. Get the word out you are eager to buy and you will find those who are eager to sell.
• Find appreciating neighborhoods: Don’t buy homes in run down neighborhoods. Shell out a little more money to buy in neighborhoods with good schools and other neighbors who take pride in their home. You’ll be glad you did when it comes time to sell and you cash in on all that appreciation.
A Few things you will want to be careful of:
• For Sale By Owners: Otherwise known as “fizbos”. These can be the best deals and the worst deals. First time home buyers beware! Only people experienced in real estate should attempt to buy a fizbo with out the help of a real estate agent.
A novice can get burnt badly paying too much for a home or just having to deal with a mountain of paperwork not knowing how to do it. If you’re a novice and you find a fizbo that you think you want to buy, negotiate a commission with a real estate agent you trust to help you handle the purchase. Most real estate agents will come down in their normal fee structure to have a deal simply handed to them.
• No trailers, manufactured homes, or fancy fixing up: Trailers are a bad investment. They will always depreciate and not appreciate in value. Manufactured homes are better but still not a good investment.
• Another mistake young investors or first time homebuyers make buying a home, fixing it up and then selling it is that they will often times make “improvements” to the home that most buyers don’t want.
If you plan on selling a house within the next couple of years, do not paint the inside rich lavish colors. In fact all walls should be white or off white to make the best sale. Fancy landscaping is also a no-no especially if you plan on turning your home into a rental, at some point in the future. Tenants generally do not maintain landscape very well at all.
Here is a good tip…
 The duplex plan: A great way for a novice to get a foot into real estate is to buy a duplex and live in one side while renting out the other side. This way you will get the best loan possible (owner occupied) and you can effectively have a tenant help you pay down your mortgage quickly. After you have been in their a sufficient amount of time you can move out lease the side you were in and buy another duplex or home and continue the process.
There are literally dozens of ways to creatively finance a home. I’m not going to mention all the ways you can creatively work a house deal but I will say it is well worth your time reading a Nothing Down by Robert Allen or any of the hundreds of books out there specifically designed to teach about creative financing in real estate.
A wise investor once said that in real estate, your money is made when you BUY the investment not when you sell. Real estate investing and home buying is a huge world.
There is a ton to learn and just when you think you’ve learned it all, you get burnt and you learn something new. If you want to make your home purchase a real estate investment I highly recommend you read as many books as you can get and then jump in with both feet. Don’t wait. If you consider your real estate a long term investment then you’ll always be reasonably assured you’ll come out on top. Many times way on top.
If you wait for the timing to be right, you might be waiting a long time. The advantage you will have over other investors is you are serving dual purposes simultaneously; a roof over your head and a killer investment.
About the Author: Dan Ostler is the owner of http://www.LeaseOptionHomeBuying.com. Dan is an author, speaker, business owner, investor, and one of the nations leading Lease Option Consultants. He has been offering housing solutions and consulting advice to families with credit issues in all parts of the country for the past 8 years, and welcomes all visitors to his website for tons of **FREE** Information.