I Want To Buy
First things first – if you are buying now, I have one thing to say – Congratulations! You are smart!
Remember the addage Buy Low, Sell High. This is low – it’s time to buy.
Forget lowest – think lowish. Is it the very lowest? Who knows – you can only spot the lowest point about 6 months afterward. Then it’s to late by this measure. Don’t let greed get the best of you. This is low enough to make some good investments.
Here are the 5 things to keep in mind if you are thinking about buying.
1. Know WHY you are buying. Is this your home or is it an investment? One of my mentors away ranted that you should know your exit strategy before you buy. Don’t buy just because its a good deal, what is your plan? I talk to investors about the fact that there are only three strategies: cash, cash-flow and equity. For a personal residence, is this your first, move-up, or retirement home. The WHY determines the strategy. For instance, if you are planning on being in this house for 10 years or more, get in it, enjoy it, write off the interest. The market will right itself in time.
2. Know your lending options. Things have and are changing on the lending front. As of this writing, if you are buying your first investment property many banks require 2 years experience as a landlord before they’ll loan. Investigate your options. There has never been a better time to shop financing. Not long ago, pretty much all lenders you talked you were offering the same financing options. Not any more. Now they can vary wildly. Talk to 2 or 3.
3. Educate yourself concerning the market. I’m a believer in The Marathon, as I call it. I load you in the car and we see as many properties as you can stand in a day. You will be amazed by what you can learn in just one day! You’ll see what kinds of properties are available. You’ll get a good feel for value. You’ll educate me about your likes and dislikes. It’s a fact-finding mission, not a buying trip.
4. Always buy with re-sale in mind. Even if you say you are never moving again. Remember the Location, Location, Location rule. There are lower prices in nasty areas, that doesn’t necessarily make them a good deal. At some point your property will be sold, if not by you, then your heirs. A lousy house in a good area is better than a good house in a lousy area.
5. Look for easy improvements that will increase value. Do you just hate green shag carpet? Does the house stink? Is the yard wrecked? If you can see past some of the things that would turn other buyers away, you might be able to find a diamond in the rough.
At times like this it can be hard to see past the media fear-mongering and mob mentality of doom and gloom. Think for yourself. If you want to buy – do your homework and get out there. If you could use some help, give me a call.
