A real estate investor is someone who actively or passively invests in real estate for cash flow, appreciation, tax benefits and/or leverage.

You do not need to be an expert to successfully invest in real estate. However, there are some important factors to keep in mind before you begin investing.

Retirement

Many employees and small business owners in today’s economic environment have little to no retirement package. For these people, investing in real estate can make great long-term sense.

Buying and Holding

Buying and holding a property is beneficial because properties generally increase in value over time. As the property value increases and the principle loan amount decreases, the growing equity can quickly become a great resource.

Flipping

During certain real estate cycles, flipping properties can be a great way to make a quick dollar. However, if you are not experienced in construction and/or real estate sales, you may need to form a small group (generally an LLC) to help protect your large investment.

Renting

Having great renters in your long-term investment property can be of great benefit. Not only do reliable renters help keep the property in great condition, they also help decrease the principle loan balance via their timely rent payments.

Down Payment

Generally speaking, investment loans require a least 20% as a down payment, but often have better rates as the down payment increases.

Cash Offers

Many investors make “all cash offers” when buying an investment property. These offers can result in great deals because of their shorter escrow periods and loan contingency waiver.

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