The Top 3 Real Estate Investor ‘Loan Shopping’ Mistakes to Avoid

Real Estate Investment loans are without a question the secret sauce to almost all successful investors. You too could take advantage of them to build your real estate empire. But there are a few traps you must avoid.
For starters, don’t just go out there and borrow money for the sake of borrowing it. Sure, getting a loan goes a long way in greasing the whole process of investing in real estate, but you must have a strategy.
So rule # 1 – you must be clear on what you want to do with the property before you even put it under contract. Otherwise you risk making high monthly mortgage payments with sky high interest with no end in sight.
Now, choosing your exit strategy is just the first step. The second deadly trap you want to Buying 5 Year Old House avoid with real estate investment loans is picking the wrong investing strategy in itself.
You don’t want to get a loan for investing in a property hoping you will be able to fix it up and then rent it before you can secure a conventional loan pre-approval letter from your bank.
In other words, getting a real estate investment loan for a “buy and hold” exit strategy is misguided if you’re not certain you will be able to get a 30 year mortgage loan from the bank. You risk getting stuck with a high interest loan or even worse getting the property foreclosed on.
The last deadly trap you want to avoid is merely shopping around for a real estate investment loan based on interest rates alone.
This might be the conventional way to shop for your house mortgage, but when it comes to an investment property loan, you Target Audience For Luxury Real Estate also want to make sure you get a loan that is ‘investor friendly.’ By that I mean you want the terms to be flexible.
For example, you can ask your Broker if they lend with zero down payment on investment properties. Most don’t but some do, so make it a point that you ask. Check also to see if they can lend with no monthly payments while you fix up the property. This will go a long way in making your investment effort profitable.
So there you have it, the top 3 mistakes to look out for when shopping for a real estate investment loan. Make it a point to plan your exit strategy and make it a point to shop around for terms in addition to favourable interest rates on your real estate investment loan.

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