james d kuhn - tips for new real estate investors

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Tips for New Real Estate Investors James D Kuhn

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Page 1: James D Kuhn - Tips for New Real Estate Investors

Tips for New Real Estate InvestorsJames D Kuhn

Page 2: James D Kuhn - Tips for New Real Estate Investors

Real Estate Beautiful Home

Page 3: James D Kuhn - Tips for New Real Estate Investors

Real estate investing is a businessYou should treat it as such. Start by developing a good business plan, detailing the nuances of starting and running your business, with realistic goals over time frames of one, three, five and 10 years.  If you don’t know how to write a business plan, you can find help at the Small Business Administration’s website. But real estate investing doesn’t have to be difficult or scary. When I teach people how to invest in real estate, my philosophy is to maximize return while minimizing the risks.  

Page 4: James D Kuhn - Tips for New Real Estate Investors

Find A Good Bank Or Mortgage BrokerYour area if you’re financing your investments. Realtors (real estate agents who belong to the National Association of Realtors and must adhere to a code of ethics) are good sources for recommendations, or you can ask other investors whom they’ve used. You might want to do this even before you start your property search. If you’re paying cash, you’ll need to prove you have the funds by submitting a recent bank or brokerage statement when you make an offer.

Page 5: James D Kuhn - Tips for New Real Estate Investors

 Check your credit reportdetermine your ability to finance investment property. Most lenders today require 700 or better FICO (Fair Isaac Co.) scores from borrowers who want to buy investment property. Also, make sure that your total debt-to-monthly-income ratio is low. Often it makes sense to pay down outstanding credit card debt or car loans in order to improve your debt ratios.

Page 6: James D Kuhn - Tips for New Real Estate Investors

Determine The Best Areas For PropertiesSome new investors make the mistake of limiting their search to areas close to their home. But often better rental areas may be located a little further away. New investors may think they need to live near their properties in case tenants call about repairs or other problems. But in reality, if the home is put into good repair before your tenants move in, those calls from tenants should be few and far between.

Page 7: James D Kuhn - Tips for New Real Estate Investors

Talk with other investors about local real estateJoin a real estate club in your area (do a quick Google search to find them). Real estate clubs are great places to network with other investors, lenders, and repair service providers. You can often pick up helpful advice about your local market from other club members. Some communities offer courses on real estate investing through adult education or local real estate brokerages. If you can’t find a real estate club or course, consider an online investing forum. 

Page 8: James D Kuhn - Tips for New Real Estate Investors

Consider Multiple Sources For Buying Properties

 New investors may think they can only purchase homes through their local Multiple Listing Service (MLS), or by banging on doors in run-down neighborhoods looking for distressed sellers. But sometimes you can find much better deals on real estate auction sites, such as Auction.com, and these sites make it possible for buyers to easily make purchases in locations beyond their immediate area.

Page 9: James D Kuhn - Tips for New Real Estate Investors

Spend time reading about real estate investing

A tremendous amount of free information exists today online about real estate investing. When purchasing a book, look for those that offer practical guides on buying, flipping, renting, and selling properties. Avoid books that claim you can make huge sums of money in 30 to 60 days or 25-year-old books detailing techniques that may no longer work.

Page 10: James D Kuhn - Tips for New Real Estate Investors

Find A Good Realtor To Help You Locate Properties

 Not all Realtors are experienced or even adept at helping investors. Before the real estate crash in 2007 and the subsequent onslaught of foreclosures, only a small percentage of Realtors would even work with investors. Since then, many Realtors have taken courses and suddenly claim to be “experts” on foreclosures. Make sure that you choose a Realtor.

Page 11: James D Kuhn - Tips for New Real Estate Investors

  Look For A Return Greater Than 1 Percent Per Month Of Sales Look For A Return Greater Than 1 Percent Per Month Of Sales PricePrice

An old maxim of real estate says that a rental property yielding 1 percent of the sales price per month is a good deal. In other words, if the home cost $100,000, you should get $1,000 per month in rent, or about 12 percent annual yield. But in many areas of the United States today, home values have declined substantially and investors can now achieve greater than 1 percent per month returns.

Page 12: James D Kuhn - Tips for New Real Estate Investors

 Learn from the bestTo achieve success, model your investing decisions after what other successful real estate investors in your area have done. Search Google for real estate clubs in your city, or try Meetup.com.Above all, remember that like anything else, the harder you work and the more effort you put into your real estate investment business, the greater your ultimate reward will become over time. Good luck.