Are you a full-time, hard-working, punch the clock or earn a salary employee of a company? Do you think this money that you earn is enough to build your own equity and secure your future financially? No? Do you wish to generate a new way of earning revenue that doesn’t care if you get up to go to work today? If yes, then you might want to consider investing in real estate.
Buy a foreclosed, short-sale or entry level home in the area at fair market value, because let’s be real, there is NO SUCH THING as stealing a home any longer! Good deals are meant to be had, it just depends upon how much money or sweat equity that you want to throw into it. This, however, is a topic for a future blog! Getting back to the subject, buy that home and rent it out at the going rental rate as the properties in the surrounding area are renting for and start growing your equity and working towards that early retirement!
Investment in rental properties is rewarding, but to earn this reward you will have to put up a fight! You must prepare yourself for the home bidding war since the rental market is so strong, many investors bid for it.
So, today I’ll be sharing with you some great strategies to gear up and increase your chances of winning the home bidding war.
A: Cash is King
According to a report presented by RealtyTrac (www.realtytrac.com), in the first few months of 2014, ‘all cash’ deals on home sales hit a record 43% showing a 19% increase in real estate cash deals! It is a no brainer that in today’s real estate market, cash buyers have the upper hand. Therefore, when bidding for a house that you think will earn you great rental rate, make a cash offer. Furthermore, home sellers also prefer cash buyers more because cash offers are more attractive and such deals are closed in a timely manner.
B: Non-Cash Buyers
All of those that want to get into the investment field can’t pay cash. That’s fine! You have to start somewhere! Here’s a tip: ~Get A Mortgage Pre-Approval~
A strong, non-cash mortgage pre-approval is important to have in order to battle it out with potential cash bidders and have equal chances of winning that potential bidding war. Here’s a tip: Work with a mortgage loan officer that is with a broker, and not with one of the “Big Banks”. “Big Banks” are notorious for not closing on time and these Pre-Approval letters sometimes hurt you more than help. I know, I know, I have every loan officer with National chains wanting to make mincemeat out of me, but trust me on this one and save yourself some headaches. Make sure you have a copy of your proof of funds along with a strong mortgage approval. To get a pre-approval, you might have to take a head start to make sure that you have “all of your ducks in a row”.
Wondering why pre-approval is important? Your mortgage pre-approval is a proof that you can buy. It shows to the seller that the lender has verified your income, your debts, your assets, your credit score and it determines that you have the financial power to afford mortgage payments. In addition, not one seller will even give you the time of day without a pre-approval letter. In fact, on my listings, I verify the validity of each and every one!
C: Don’t Delay
Take Fast Action and Make Your Offer! Don’t wait for the right time to make your offer, for the stars to align, to talk it over with your family first. Once the home goes live (or for sale), hire a professional Realtor to evaluate the property for you and accordingly make your offer. I will tell you that the first time investors feel as if they need to ‘low-ball’ their offer, because they are Investors (dramatic background music plays while you stand with your hands on your hips). Uh-uh. Make sure that when you hire your Realtor; that you get a straight shooter! Invariably, I will do what my clients ultimately want me to do; however, I don’t feel that it is in our best interest to practice making offers! At the end of the day, sit down with your Realtor and make sure that you go over comps, what the house needs, and what kind of offer that you realistically want to make. Be flexible when making your offer, meaning that you should personalize your offer according to the seller to make it more attractive to him/her. These are some things that your Realtor should do for you in the course of making your offer. Quick actions and flexibility can act as game-changers and help you increase your chances of winning that home bidding war.
Good luck, and should you need assistance, contact me at (214) 609-7123 or firstname.lastname@example.org