Monday, March 31, 2008

Credit

Just a little tip about credit. Since mid-October we had been paying a certain amount for the mortgage on our 4 family. One night, just last month, I looked at our statement carefully. I realized we were paying an optional fee that increased the amount by $40. The next day I called to inquire. The representative told me that he had a record that we requested, at closing, that we have this optional fee added to our mortgage payment for disability and unemployment. Quickly, I explained that it was a mistake, because my husband doesn't even believe in warranties. The representative went on to explain how it's helpful to have. He obviously didn't know that every penny eats into investors cash flow. We canceled the "optional fee" and added $40 a month to our cash flow. Lesson learned. Read everything, check your documents, as much as you like a team member...assume nothing.
Take action.

Saturday, March 29, 2008

Learning: Day 6: Credit!

At this point your have decided a market and team members. A very important team member is going to be the bank or mortage broker. Now that rates are going down, we think...BUY. Not necessarily. It is good to buy while prices are down. It's also hard to get approved. You may have difficulty getting approved because you are an investor. You must be honest that it is not owner occupied because that will be revealed through the insurance. Also, investors may be forced to put some more down. Do your shopping and know your credit score. If it's not great, hold off on buying for three months. There are many actions you can take to quickly restore your credit score. Don't wait...Take the Leap!

Bringing Learning To Life: Day 5

Who will be on your team? That is the next question you need to ask yourself once you have decided on a market. Everyone's team is different, but I would like to suggest a basic checklist. Some individuals on your team, may be able to do more than one job.

You will need to remember, also, that not all team members are equal. There are certain people who are essential during the buying process, but will not be too involved afterwards. An example of these people would be realtors and lawyers. Then there are those who need to be identified before you buy, but their role takes precedence once you own the property. An example of those team members are property managers or contrators. I can not emphasize enough, how important it is to take your time when choosing these team members. I interviewed team members for months...I suggest you do the same.

Now who do you need?
Here is a suggested list of Team Members:
Realtor
Insurance Agent
Coach
Lawyer (one who can close and set up entities)
CPA
Inspector
Property Manager
Sub/General Contractors
Money Partner (if necessary or desired)

It's never too early to start seeking out your team and one of the best places to refer to for good referrals is the local investment real estate group. Do not take any suggestions from someone who is not an investor. Also, many of your team members will serve you best and help you accomplish your goals if they too are investors.

Good luck, be cautious, buy slow.