10 Mistakes You Can't Afford to Make Before Buying a Home
There are many moving parts involved when purchasing a home. In the current competitive market, you need to be strategic before buying to achieve your goals. Your best bet to score your dream home is by avoiding these common mistakes before the home-buying process begins. If you don’t plan ahead to avoid these errors- you’ll be at risk for potential problems that could be detrimental to the purchase of your home! AVOID THESE MISTAKES! GET YOUR FREE GUIDE TODAY.
INVESTING + PITFALLS
Investing can be scary, but it doesn’t have to be. I made a few mistakes early in my career as an investor that have taught me the smartest ways of doing business. Now, I’m confident that my strategy works to curate the most profit, and I have had the success to prove it. In 1987, I made the decision to invest in what was then called the Easton Building in Old Ellicott City on Main Street. With the help of 2 partners, I bought it for $90,000 with the intention of selling it quickly for $300,000. We achieved this, but ended up having to put another $100,000 into it on top of the initial $100,000 we spent on renovations. Needless to say, we barely broke even. This was a tough loss, but it taught me some of the most important lessons about investing that have guided me to great success investing since. The first lesson is knowing your why. There are many reasons why you should consider buying an investment property. My reason was my daughter, Lauren. I wanted to fund my daughter’s future college education with my investment property profit. Your reason may be to pay less in income taxes, generate wealth for retirement, be financially independent, etc. The reasons to invest are expansive, but you should have a specific reason of your own. Narrowing your goal will help you narrow your path to achieve it. Once you have your why, the second lesson is knowing who you are. Knowing who you are is crucial. The outcome of my first investment deal showed me who I was early on. I did not like being ‘the money guy,’ the one who finances the project, and I knew I wasn’t the ‘hammer guy,’ the one doing all the fixing up. My skills allow me to successfully play the part as the ‘rainmaker,’ the person who finds the deal and makes it happen. Taking ownership of your skill set is important when deciding who you want to be and what role you will best play in the investment deal. The third lesson is setting an objective. When investing, your goal should either be to 1. repair, renovate, and turn a quick sale for profit or, 2. buy and hold for more money, tax savings and appreciation. Keep in mind, it is very difficult to make quick money. I always think long term. By following these lessons as guides, I achieved my goal. I paid for my daughter’s Bucknell University college tuition using only the profits from one investment property in Columbia, MD. pitfalls to be mindful of: Don’t buy the deal - first buy the location and community. Be careful owning an ink pen! [Watch what you sign and guarantee.] Be careful of the potential liabilities - lead paint, communities, asbestos, etc. Consider local properties that you know rather than a great deal out of your state/neighborhood. Know the laws regarding leasing so you can avoid violating any laws. Partner with people you trust. Use only licensed, insured, and bonded contractors. [Uninsured contractors are a huge liability.] You do not necessarily need a property management company. Engage a REALTOR® you can trust with a spotless reputation and career history of integrity. Google any Realtor you are considering and check the Maryland Real Estate Commission judiciary case search. After you have accumulated a strong equity position in your property, consider refinancing rather than selling to avoid tax consequences. . Remember, the hardest thing to do is buy your first rental property, the easiest is to buy the second! If you want to learn how to buy your first investment property for college fund, retirement or just to build wealth, visit RealBobLucido.com. I will be glad to show you how you can become a millionaire using the same framework I myself used to become a millionaire by the age of 30! -Bob Lucido, CEO + Associate BrokerBob Lucido Team of Keller Williams Lucido Agency + Lucido Global
What Not to do Before Buying a Home
Buying a home can be stressful, so you don’t want to make it even harder by making the wrong choices beforehand. Your finances will be monitored until your loan closes so you need to be mindful of a few things during the home-buying process to avoid any mishaps. Here’s a list of what not to do before buying a home:DON’T... Open a New Line of CreditTaking on new debt, no matter how small, can throw off your debt-to-income ratio which could potentially disqualify you from mortgage lending. Wait to open new credit cards and extend credit lines until the home buying process is over. Miss Credit PaymentsA missed payment even months before you apply could lower your credit score and jeopardize your chances of securing a loan. You especially don’t want to miss current mortgage payments, this will make you ineligible for a loan from most lenders for at least a year. Move Money AroundWait until your home is closed to withdraw, deposit, or transfer large amounts of money. Generally if you move more than $500 at a time it will impact your loan approval because your loan approval was based on your finances at the time of application, and now they have changed. Change JobsChanging jobs even if for good reason could potentially cause your lender to question your financial stability. Especially avoid job changes that include going from full-time to part-time or from salary to commission. Lease a CarLeasing a car means more debt to your lender. This will delay the process of buying a home no matter if the car is well within your means. Source
Categories
Recent Posts
