Your First 5 Investment Properties: 5 Steps to Jumpstart Your Real Estate Business

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By David Goncalves

Real estate is an outstanding and rewarding industry. Whether you’re in the mortgage sector looking for ways to improve your mortgage automation or a real estate investor who wants to find the best properties, there are so many different options available depending on the type of investment you want to make. It provides numerous tax benefits, a good source of cash flow, and is a key complement to a rewarding retirement plan. For a successful retirement, you need to plan and strategize early on to achieve your goals.

Some people may be able to naturally do this and enjoy their fruitful retirement, however, some get overwhelmed with their day to day lives that planning for their retirement and then executing that plan, ends up as the one thing “to get around to some time or another”. If the latter could be you, you might want to make sure to educate yourself with some knowledge that can help you plan for retirement without taking you away from your daily motions, meaning you can still live while also striving for a better future. Real estate investing is no different. It begins with a strong, informed blueprint, established before the purchase of your first investment property and should be utilized all the way through to your hundredth.

Ultimately, it is undeniable that there are many reasons to invest in real estate. From rental income to portfolio diversification, the possibilities are endless. During times of volatility in the stock and bond markets, investors often turn to hard assets such as real estate, and because of this in areas like Charleston in South Carolina, the real estate industry is booming and showing no signs of slowing down. Accordingly, if you are considering purchasing a property in South Carolina to add to your real estate portfolio, you can find some useful resources on the Riverland Realty website here: https://desirablecharlestonhomes.com.

When investing in property it is inevitable that there will be many challenges and obstacles along the way, but connecting with an experienced and trusted mortgage advisor is the key to overcoming these. An experienced mortgage advisor should be able to identify the stress points before you encounter them, and assist you in creating a personal blueprint that evolves with the lending landscape.

Below are five proven strategies to help jumpstart your venture into real estate investing and guide you in the right direction. Following each of the steps will put you well on your way to financial freedom.

1. Identify Your Real Estate Investor Team

Behind every successful real estate investor is a team of carefully selected key players to help them make deals happen. Key team members can include Realtor ®s, lawyers, accountants, mentors, and contractors, but should always include a mortgage advisor. A well-established team will bring much more value to your plan and keep you on the right track.

REIN hosts four live weekend events a year in Calgary, Edmonton, Toronto and Vancouver called the Authentic Canadian Real Estate (ACRE) program.These events not only teach participants the fundamentals of real estate investing, but they are also great places to network, meet real estate investing professionals and start building your real estate investor team.

Build your team at the live Authentic Canadian Real Estate program nearest you.

2. Take A Look At Where You Are Today

Take stock of your current financial situation by:

  • Pulling a credit check on yourself (or ask a mortgage advisor to assist).
  • Identifying credit shortfalls that need to be corrected.
  • Analyzing your down payment sources, access to cash, investments and equity in real estate.
  • Analyzing your employment and how it affects your ability to borrow. Do not quit your day job just yet?

3. Set Goals And Targets

Have you thought about your retirement vision, your end-game, and long-term cash flow targets? You must determine these first, before you can identify how many properties you will need to invest in to achieve that rewarding retirement plan.

4. Implement Your Plan

Work with a mortgage advisor to pre-position (not pre-approve) you for investing in your next property.

Begin by refinancing equity in your primary residence, by using companies like Equity Experts to include a Home Equity Line of Credit (HELOC) with a re-advanceable line of credit. This means the credit limit will increase as the mortgage principal is paid down. (Did you know that there are lines of credit available as low as prime rate? Ask us!). If you currently own an investment or recreational property, there may be an opportunity to refinance those as well.

Focus on buying properties with good cash flow. Once you exceed five properties, you will rely on the portfolio Debt Service Ratio (DSR) cash flow for future borrowing and you need to be properly positioned.

Larger municipalities provide more liquidity, therefore reducing risk for lenders. This will make your property more attractive to a lender when requesting financing.

5. Prepare For The Next Stage In Your Venture

Refinance prior to the fifth purchase. As you approach the purchase of your fifth property, you need to review your portfolio?s equity (including your primary residence), increase your HELOCs, and refinance your investment properties to access additional cash, because these options may not be available once you exceed five properties.

Another preparation step is to review your amortizations. (Did you know that you can get up to 35 years amortization?)

Successful real estate investors keep good financial records. In your mortgage binder you should always have up-to-date leases, net worth statements, income documentation, property taxes, mortgage statements and identification.

There is much to consider when carefully planning your real estate ventures. The key is to plan early on and with the support of your real estate investor team. Doing so keeps you informed along the way, allows you to be in control at all stages, and ultimately jumpstarts the beginning of what can become a very financially rewarding experience.

David Goncalves leads the Vine Group. David and his team work with national lenders to find better financing solutions for investors. David has been in the mortgage industry for 13+ years. During this time, he has funded approximately $1.3 billion in mortgages. He was Rookie of the Year at RBC, and later received Gold and Platinum Club awards. David continues to be a mentor to many Mortgage Sales Professionals. He always refers to the industry not as a sales industry, but rather a ?people business?.

Ready to take the next step in your real estate investing business?

Learn the fundamentals of real estate investing at the live ACRE program nearest you! Visit the ACRE website for more details.

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