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:
There are many metrics and indicators that real estate investors can look at while evaluating a property; however, not all are created equally.
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 [...]
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 [...]