The election year coupled with the threat of a recession are causing people to yank their money out of the stock market and enter it into a real estate investment. And there is no better time than now to take advantage of the sinking real estate prices. But before you sign on the dotted line, like any big investment you should use caution. Ask yourself these following questions before you buy a real estate investment.
Do you know what you are buying?
You were smart enough to cash in on your stock investments when you did, so do not reinvest haphazardly in a real estate investment. Make sure you have done your research and inspected the property carefully. Do not make rash decisions based on your emotions. Base your decisions on careful research and planning just like you would if you were buying stock. It is easier to succumb to emotions in a real estate investment because you actually get to see what you are buying.
Do you know your borrower?
Online stock investment is conducted by sitting comfortably at your desk, and with a few clicks of the mouse. On the contrary, real estate investment involves showing up at a bank or a mortgage company and spending the afternoon signing stacks of papers as high as the bank itself. So before you suffer from writers cramp from putting your signature on hundreds of documents, make sure you know what you are signing. Are you getting that great interest rate you were quoted when they came on their hands and knees for your business? Find out when the first payment is due and if there is a prepayment penalty. Also, make sure you know where to send the payments. You do not want to get hit with a late payment fee on your first payment. Lastly, make sure you ask any questions you might have before you put that pen on paper. When in doubt, hire a lawyer.
Do you know how much you will need for your real estate investment?
It would be really embarrassing if you showed up to the closing with empty pockets or not enough money to cover the closing costs. It takes money to get a loan. So if you show up with money, you will probably leave with no money. It does not make sense, does it? The loan process is weird. So where is that money coming from and how is it getting there? It could be wired or it could be in the form of a cashiers check. Whatever it is make sure you get it to the closing or you will not have a real estate investment. Be prepared before you show up to the closing. Know how much you owe and to how many people you owe money to. The bank and the seller will not baby you through this process. It is up to you to know how the process works.
You held up your side of the bargain, did the seller hold up his?
Even before you get to the bank, make sure your real estate investment is exactly what you asked for. Make sure all negotiated repairs and or credits were made by the seller before you sign the papers. Inspect the real estate investment before you show up at the closing. And check the paperwork for any credits that were due because once you sign, the property is your responsibility. Remember it is a real estate investment, so you want to capitalize as much as you can when you resell it.
The original article is located at Manage Your Real Estate Investments