{"id":5957,"date":"2017-04-01T10:52:06","date_gmt":"2017-04-01T14:52:06","guid":{"rendered":"http:\/\/teammovemortgage.com\/?p=5957"},"modified":"2020-07-13T22:32:47","modified_gmt":"2020-07-13T22:32:47","slug":"how-to-get-into-real-estate","status":"publish","type":"post","link":"https:\/\/teammovemortgage.com\/blog\/how-to-get-into-real-estate\/","title":{"rendered":"How to Get Into Real Estate Investing and Build Wealth"},"content":{"rendered":"<p>You have probably seen plenty of <a href=\"http:\/\/www.hgtv.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">HGTV<\/a> shows telling how to buy <a href=\"http:\/\/www.homes.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">homes<\/a> as an investment. \u00a0Whether you own one house or many rental properties, real estate can create wealth. \u00a0Wealth includes real estate equity as well as an income stream.\u00a0 So you may be wondering how to get into <a href=\"https:\/\/www.zillow.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">real estate<\/a> investing. \u00a0Well there are several ways that depend on borrower finances and the local <a href=\"https:\/\/www.trulia.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">real estate<\/a> market.\u00a0 Most importantly, make sure that you treat real estate investing as a business.\u00a0 Explore all options, consult with experts, and even make a business plan.\u00a0 This article explores the route of buying a first home as an investment and building a real estate investment portfolio from there.<\/p>\n<h2>Buying a First Home for a Future Rental &#8211; How to get into real estate early<\/h2>\n<p>You don&#8217;t have to go straight into being a landlord.\u00a0 Buy your own house first.\u00a0 Even though you live in the house, you are still <img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-5996\" src=\"https:\/\/teammovemortgage.com\/blog\/wp-content\/uploads\/2017\/04\/AdobeStock_17706703-300x200.jpeg\" alt=\"how to get into real estate investing\" width=\"300\" height=\"200\" \/>investing in your future.\u00a0 You own real estate so you are a real estate investor!\u00a0 So the purpose of the article is to make sure all areas are considered for best possible results.\u00a0 When buying a first home, there are lots of financing options.\u00a0 Some offer such affordable options, a buyer may choose no money down.\u00a0 These options include <a href=\"https:\/\/www.va.gov\/\" target=\"_blank\" rel=\"noopener noreferrer\">VA<\/a> loans or <a href=\"https:\/\/www.rd.usda.gov\/\" target=\"_blank\" rel=\"noopener noreferrer\">USDA Rural Development <\/a>home loans.\u00a0 <a href=\"http:\/\/www.military.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">VA<\/a> or USDA offer an easy path to owning that first home because of the affordable payments.\u00a0 Now if a buyer has down payment, it may help future cash flow in a rental situation.\u00a0 The lower the payment, the better chances of covering the payment with rental income.<\/p>\n<p>Buying a first home also brings other advantages.\u00a0 Number one is it is all yours!\u00a0 You can do what you want within reason.\u00a0 Also homeowners may realize income <a href=\"https:\/\/www.irs.gov\/\" target=\"_blank\" rel=\"noopener noreferrer\">tax benefits <\/a>that renters may not.\u00a0 Plus you are investing in yourself and not helping a landlord get rich.\u00a0 Once a first time buyer feels ready to own the next property, the house could be converted to a rental.\u00a0 Even <a href=\"http:\/\/teammovemortgage.com\/blog\/2015\/05\/23\/bonus-entitlement-2nd-tier-entitlement\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"text-decoration: underline;\">Veterans could use a VA loan again for buying another primary<\/span><\/a>!<\/p>\n<p>Nothing of course is a guarantee as values may go up or depreciate.\u00a0 So foremost, make sure that you are happy with the home and that you can afford the home.<\/p>\n<h2>Buying a Fixer Upper<\/h2>\n<p>First of all, buying a fixer upper does not guarantee tons of equity right away.\u00a0 There are always risks of buying a home in need of work.\u00a0 You can watch any of the HGTV shows to quickly see once something is removed there is a big problem unforeseen.\u00a0 So getting a home inspection is very important.\u00a0 Additionally if the home does not meet the mortgage or appraiser requirements, a rehab mortgage may be necessary.<\/p>\n<p><strong>Are you a handyman?<\/strong>\u00a0 If a buyer has the knowledge and time to remodel a home, this could save a lot of money.\u00a0 But be warned that many think it can be done and then finds out a professional must be hired.\u00a0 Whether the project got too big or the owner just doesn&#8217;t have the time.\u00a0 So account for the costs either way.<\/p>\n<p><strong>Access to a contractor or handyman<\/strong>.\u00a0 If you are not able to fix all problems or renovations, use a contractor.\u00a0 Ask around for knowledgeable contractors that charge reasonable rates.\u00a0 There will be repairs that come up so having a handyman available is important to keep your investment in good condition.\u00a0 Plus it will keep your tenants happy.<\/p>\n<h2>Choosing the Realtor &#8211; How to Get into Real Estate Investing<img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-4945\" src=\"https:\/\/teammovemortgage.com\/blog\/wp-content\/uploads\/2016\/11\/retired-couple-and-advisor-300x178.jpg\" alt=\"how to get into real estate investing\" width=\"300\" height=\"178\" \/><\/h2>\n<p>Understanding how to get into <a href=\"http:\/\/activerain.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">real estate<\/a> means asking questions and consulting experts.\u00a0 So there are important questions to ask a knowledgeable <a href=\"http:\/\/www.realtor.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">Realtor<\/a>.<\/p>\n<p><strong>What is the market rent?<\/strong>\u00a0 Even though you may purchase the home as a primary residence, ask\u00a0about the market rent.\u00a0 Considering the rental market for the home is important.\u00a0 Because if you\u00a0switch it to an investment property, it is helpful to know and plan up-front.<\/p>\n<p><strong>What is the trend of the area \/ neighborhood?<\/strong>\u00a0\u00a0 Does the neighborhood look to be on the way up or down?\u00a0 Are there projects coming up that could help or hurt the value and ability to rent?<\/p>\n<p><strong>School districts?<\/strong>\u00a0 Consider the strength of schools in the area for your children and future tenants.\u00a0 A strong school district will attract families with children.\u00a0 Those areas may be more stable or appreciating.<\/p>\n<p><strong>What are renters looking for?\u00a0<\/strong> Knowing the amenities tenants want is paramount.\u00a0 So number of bedrooms, proximity to stores and schools, 1 or 2 stories, and yard size should be considered.\u00a0 Some areas draw renters that want low maintenance too.\u00a0 It could make sense to even offer a lawn service for tenants!<\/p>\n<h2>Buying a Multi Family Dwelling as Investment<\/h2>\n<p>How to get into real estate investing right away is\u00a0to buy\u00a0a multifamily dwelling.\u00a0 These 2 &#8211; 4 unit homes allow a buyer to live in one unit and rent out the others.\u00a0 2 unit buildings are called a duplex, 3 units is a triplex, and 4 is a quadruplex.\u00a0 Even though there would be rental income, lenders will treat it as a primary residence in this case.\u00a0 So favorable financing along with the ability to receive rent are very appealing!<\/p>\n<p>What if the rent from the rental units could cover the mortgage payment?\u00a0 That would be amazing!\u00a0 Then you could build wealth even quicker by the tenants paying your mortgage.\u00a0 Down the road, you could move out of the primary residence unit and rent it out.\u00a0 Then the buyer \/ investor could buy another home as a primary residence.\u00a0 Maybe even another multifamily residence!<\/p>\n<h2>Funding Retirement with Rental Properties<\/h2>\n<p>Some choose to fund retirement years with rental properties instead of investing in the stock market.\u00a0 Many start early with the plan of paying down mortgages by retirement age.\u00a0 Maybe even have the mortgages completely paid off by retirement.\u00a0 Then the properties\u00a0could create an income stream during retirement years to supplement social security and other retirement income.\u00a0 Basically retirees would have a business to run, hopefully part-time, through retirement.<\/p>\n<h2>Tax Advantages of Converting a Primary to a Rental<\/h2>\n<p>As mentioned, buying a home as a primary residence first has a lot of advantages.\u00a0 The <a href=\"https:\/\/www.irs.gov\/\" target=\"_blank\" rel=\"noopener noreferrer\">IRS<\/a> helps property owners with certain tax advantages.\u00a0 While living in a principal residence, typically homeowners may write off mortgage interest, <a href=\"http:\/\/www.investopedia.com\/terms\/p\/propertytax.asp\" target=\"_blank\" rel=\"noopener noreferrer\">property taxes<\/a>, and possibly some closing costs.\u00a0 After converting the property to a rental, there is even a potential window that the property may be sold without paying capital gains.\u00a0 Plus owning rental properties allow for certain tax advantages while building equity.\u00a0 Make sure to thoroughly discuss plans with your <a href=\"https:\/\/en.wikipedia.org\/wiki\/CPA\" target=\"_blank\" rel=\"noopener noreferrer\">CPA.<\/a><\/p>\n<h2>Experienced Rental Property Owner Options<\/h2>\n<p>So what if you&#8217;re a seasoned real estate investor and own several properties?\u00a0 As you become a more experienced property owner, it can get tougher to find lenders.\u00a0 More properties means filing a schedule E on tax returns, which details out expenses plus profit or loss.\u00a0 Once property owners reach 4 financed properties, many lenders are not able to finance any other rentals.\u00a0 But we offer the Fannie Mae Multiple Financed Properties program.\u00a0 So this allows investors to finance 5 &#8211; 10 total properties.\u00a0\u00a0Learn more about <a href=\"http:\/\/teammovemortgage.com\/rental-properties\/\">rental property mortgage loans here.<\/a>\u00a0 Although, keep in mind that there is typically no limit of properties owned when purchasing a primary residence.<\/p>\n<p>Keep in mind to always represent the property being purchase as to what it really is.\u00a0 This means do not say that a home will be a primary residence when it is really going to be a rental.\u00a0 Some buyers pretend that a home will be a primary residence so that a lower down payment and interest rate is possible.\u00a0 But it is <a href=\"https:\/\/www.consumerfinance.gov\/\" target=\"_blank\" rel=\"noopener noreferrer\">mortgage fraud<\/a> which brings severe penalties.\u00a0 So don&#8217;t do it!\u00a0 Also, the ideas mentioned in this article do not represent investment, financial, or tax advice.\u00a0 Consult a tax professional, financial advisor, Realtor, and mortgage loan officer when considering rental properties.\u00a0\u00a0Finally, never buy a property as a primary residence and convert it to a rental right away.\u00a0 There is nothing wrong with converting to a rental property years later.\u00a0 But it would be fraudulent to represent as a primary residence and immediately convert to a rental.\u00a0 So hopefully this helps in understanding better how to get into real estate investing.<\/p>\n<p style=\"text-align: center;\">\n","protected":false},"excerpt":{"rendered":"<p>You have probably seen plenty of HGTV shows telling how to buy homes as an investment. \u00a0Whether you own one house or many rental properties, real estate can create wealth. \u00a0Wealth includes real estate equity as well as an income stream.\u00a0 So you may be wondering how to get into real estate investing. \u00a0Well there [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5996,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5,288,40],"tags":[882,883,884,885,886,887,888],"class_list":["post-5957","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-1st-time-buyers","category-real-estate-professionals","category-tips","tag-funding-retirement-with-rental-properties","tag-how-to-get-into-real-estate","tag-how-to-get-into-real-estate-development","tag-how-to-get-into-real-estate-investing","tag-investing-in-multifamily-homes","tag-multifamily","tag-tax-advantages-of-converting-a-primary-to-a-rental"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to Get Into Real Estate and Build Wealth Through Equity<\/title>\n<meta name=\"description\" content=\"How to Get Into Real Estate is a popular topic as it is a great way to invest. Even first buyers are investors and need to learn thes tips\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/teammovemortgage.com\/blog\/how-to-get-into-real-estate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Get Into Real Estate and Build Wealth Through Equity\" \/>\n<meta property=\"og:description\" content=\"How to Get Into Real Estate is a popular topic as it is a great way to invest. 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