How to be a 1st Time Buyer and Real Estate Investor within 1 year.
With today's super-low interest rates, the demand for purchasing a single family home is thru the roof. Whether you are looking to upgrade, downgrade, relocate, or purchase your first place-- everyone is waiting for new inventory to come on the market. Assets like Single Family Homes are the driver right now but there is a need for Renters looking to get into a different niche (Condos and Townhomes).
With any Buyer I work with, I truly want to understand their long-term plans before they decide what property they want to purchase. There may be a time in the upcoming years where the property no longer suits the space, location or purpose they initially sought out. This is where I like to make sure they have an "exit" strategy. The "Exit" is to know what their place may be worth in the years ahead if they need to Sell OR if their property can serve as a great Investment (a rental property).
My entire career, I have had the mindset to be THE REALTOR THAT THINKS LIKE AN INVESTOR-- always to help buyers / sellers protect their investment and help make / save them money.
Today, I have countless ways for first-time buyers to purchase their first home for low money down, live in the property for months (or years) and then renting their property to make 30-95% Return on the Investment (ROI). I've been a real estate investor for 15+ years and these returns are insanely outrageous (in the best sense!).
EXAMPLE: (This Condo in the NW Suburbs)
This a a 1 BR /1 Bath Condo. Let's use the following numbers for this scenario:
Purchase Price: $80,000
Down Payment: 5% ($4,000)
Finance Amount: $76,000
With a 2.75% interest rate (30 Yr Loan) Your Monthly Mortgage, Taxes, HOA fees, and Insurance total $675/mo. YES. $675/mo.
The same 1 BR /1 Bath Condo in the same Building Rents between $875-$1,000 /mo. Yup! Much higher than what you would be paying if you owned it.
RENTERS: For all you that thought you wouldn't qualify to buy a place OR that you needed 20% down (or any other hurdle embedded in your mind!), here is a great example showing you a path. You still can own a property AND be flexible by renting it out at a later time. So what should you do now?
THE PLAN!
1) Speak with a Lender to ensure you are pre approved for a Loan. This will give you clarity of what you can afford or how you can prepare for becoming a homeowner in the future.
2). House Hunt! I'll help you find properties that allow rentals and that are within the criteria you provide.
3). Purchase a property! Live in there for as long as you like.
4). Exit Strategy: Once you are ready for your next investment or home; you can RENT this place out and make some money. How much money?
5). Be a Landlord: For such a property in the example above, you could NET anywhere beteween $2,400 yr - $3,900 yr. YES; That's right. You could make that much money by merely putting a $4,000 Down Paymeent when you buy. Make sense?
There are a few more details and numbers to add into the mix but safely, your return on investment would be tremendously higher than other markets. I'd be more than happy to run the numbers in person with actual properties, strategies on how to purchase and invest to optimize your returns at a later time. Let's talk! Reach out and we can start the convo!
Kostas
