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4 Things You Need To Do Before Buying Your First Investment Property in Orange County

Considering starting to invest in real estate? Here are four things you need to do before buying your first investment property in Orange County.

Review Your Credit

The first thing you need to do before buying your first investment property in Orange County is to pull your credit reports because you need to know your credit score. Request a copy of your credit report from all three bureaus. Double-check that all information is correct and make sure to dispute any errors with the respective bureau. Make sure you keep up on your payments because lenders like to see that you have no late payments for at least the past 12 months, but the longer the better. This helps show them that you will continue to make payments on time. A low debt to income ratio will also convince a lender that you are able to handle the additional mortgage payment. Pay down credit cards and other loans as much as possible, preferably to maintain a 30% utilization ratio or better. This usually indicates that you are using your credit lines responsibly.

Down Payment

The second thing you need to do before buying your first investment property in Orange County is to save up a down payment of at least 20%. If you make a larger down payment than required, it will cut down on the total principal of the loan. The less money you borrow, the more likely the lender is to accept your application. With a large down payment, good payment history, and low utilization ratio, a lender may not place quite as much weight on your less than perfect credit score, but those factors all depend solely on the lender.

Research

The third thing you need to do before buying your first investment property in Orange County is research and become familiar with the area. Make sure the neighborhood is in demand; this will help you find renters when you’re ready. Check out the schools, entertainment, access to shopping, and groceries. You will want to make sure you choose an investment that would work for multiple family types. This will give you the best chance to find a good renter in the future. You will also need to look into the current rental supply on the market to make sure it isn’t flooded, this will indicate a low demand for the area. To make the best investment, you want to pick a location that isn’t too flooded with inventory but make sure the prices aren’t over-inflated.

Prepare a Budget

The fourth thing you need to do before buying your first investment property in Orange County is to prepare a budget. When you find a property you are interested in and want to make an offer, it is smart to prepare a budget before you make an offer. You will need to factor in repair costs, monthly expected income, and operating costs to determine your ROI to see if the property makes sense to purchase and hold in your portfolio. Even if you are using a property management company, you will still need to keep track of your own finances for every rental property you own. You will need to make sure the property maintains a positive cash flow, otherwise, it’s not worth the investment! Make sure to factor in any traveling or management expenses on top of the mortgage payment and taxes, and keep a modest repair fund available for the property. Your budget should be reviewed every quarter at a minimum to make sure your real estate investment is performing as it should.

When you work with us at H&M Realty Group, we can help you through all of these steps. We thoroughly check all of our properties to maintain a selection of quality investments. We can help you review your credit reports, research the area, and walk you through budget preparation.

Give us a call today at 949-625-4533 or send us a message to discuss these four things you need to do before buying your first investment property in Orange County.

Joe

Broker/Realtor/Investor/Mentor (41 years experience) Specialties: Buyer's Agent, Listing Agent, Foreclosure, Short-Sale, Property Management, Landlord I'm a Full Time Real Estate Professional, house flipper and mentor to many of my clients. I am here to help you get top dollar for your home or get you the best price for a home that you are going to live in. I have over 40 years of real estate experience for you to draw on and actively list and sell over 20 homes a year. I have sold over 600+ homes in the last ten years alone. I am a very skillful negotiator and will work diligently to help you realize the best possible price when buying or selling your home. With my Exclusive Home Acquisition & Sales System, I can find the Right Home for You! I have access to homes no other Realtor will show you. I can show you how to save an average of $10,000.00 on the purchase price. We will find a home that fits your needs, in a neighborhood that suits your style. If you are selling your home then I can bring all the professionals to you. I always include professional photos in ALL my listings. I have contractors standing by to assist with those upgrades if needed. I can also quickly get you ALL CASH offers for your home if you desire. My marketing surpasses all other agents. It begins with extensive internet advertising to hundreds of websites throughout the world. I do direct mail marketing for you home and also knock on doors in your neighborhood when I am holding an open house. I hold you home open to expose it to as many buyers as possible. My Exclusive program is designed to sell your home for Top Dollar in Any market. I am an experienced flipper here in Orange County and therefore can offer you my over 40 years of real estate experience. The information is available to you at no charge! If you like what you see, please call me and setup Your Free Consultation.

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