One of the biggest attractions to real estate as an investment is the opportunity for positive leverage. ”Leverage” meaning that you are borrowing money from somewhere else to control the property, and “positive” meaning that you’re making more money than the “leverage” is costing you. With this in mind, what are an investor’s options? At SPARRproperties, one of our first choices for investor loans is JVM Lending, a Walnut Creek based mortgage brokerage. Here they are explaining some of the most common options and requirements for investor financing:
Calculating Your Net Proceeds
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Regardless of what your situation is, if you’re thinking about selling your home, it’s important to know the financial outcome … you need to calculate your bottom line and figure out what the net proceeds are going to be from the sale.
Should I Manage My Own Investment Property?
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As you analyze different properties, you will come across some that only make sense on paper if you handle the tenant placement and management yourself. That’s ok, you just need to decide whether an investment that requires your time is equal to an investment that requires your money.
Everything You Ever Wanted to Know About Property Taxes (and then some)
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Nobody likes to pay taxes, but they’re a necessary evil. So, it doesn’t do us any good to bury our heads in the sand and try to ignore them. We might as well understand them and be properly prepared when it comes time to pay.
When Will My Loan Get Funded?
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If you’re buying a house today and can’t pay for all of it with cash (as is the case for most of us), you’ll be needing to get a loan. So, you’ll be adding a loan contingency to your contract and factoring in the lender’s timeframe to your overall closing date. What does this really mean, though? Well, considering that many lenders are frantically hiring more underwriters and support people to handle the influx of loan requests for both purchases and refi’s, it implies that it will take them longer to fund each loan. They simply cannot find enough trained talent to handle the volume. As a result, “turn-times” are slower than usual. Because of this, it is essential that a home buyer understand [...]
Analyzing Your Investment Opportunity
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There are many metrics and indicators that real estate investors can look at while evaluating a property; however, not all are created equally.
Should I Do It Myself? Or Call In A Pro?
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The first piece of property I bought was a condo in Walnut Creek and I completely remodeled it myself. We’re talking everything – kitchen, bathroom, floors, recessed lighting, crown molding, baseboard – everything. Now, this probably wouldn’t be a big deal for the contractor and handymen out there, but for me, a guy that barely passed 7th grade wood shop class, it was a pretty big undertaking. I had no experience going into it. That Christmas, nearly every one of my presents was either a tool or a how-to book. And, not knowing any better, I just dove into it. I would read a couple chapters, grab the closest tools I had for what was recommended and then I started remodeling! Looking back on [...]
Understanding the Impact of Opportunity Cost
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What does opportunity cost mean? Well, as it’s defined by Investopedia: 1. The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action. Putting it into real estate terms, it helps in our understanding and analysis of whether you are better off putting 30% down versus 20%. Or, locking into a 5/1 ARM starting at 3.5% or a 30 yr fixed at 4.25%. When you start to think through and analyze these different scenarios, you quickly see the obvious – one costs more today than the other. So, the question you are trying to answer is whether this more expensive option today will prove to [...]
Risk Tolerance
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Understanding your personal risk tolerance levels is key to being a successful real estate investor and working well together with a real estate agent.
