5 Things About Real Estate You May Not Know

5 Things About Real Estate You May Not Know

by: Billy Epperhart

As many of you know, real estate is one of the best ways to build wealth. Some of you will be really familiar with this topic, and others will not be. In this article, I want to give you some things about real estate that you may not know, whether you’re a beginner or have real estate experience.

There is so much to learn in the area of investing, and it’s impossible to know everything when you start. I hope this information helps you get further along in your journey!

1. Creative Financing

Most people think that they have to purchase their rental properties the same way they down payment and getting a loan. While that isn’t a bad strategy, there are other ways to acquire properties. I like to have at least two bankers in each area I’m buying real estate because they will typically have different resources and offer you different loan products.

Instead of saving up for a down payment other properties, or you can use a retirement account or liquid assets, as well. You can use partners to raise down payments in real estate, or you can use lines of credit from local banks, which tends to be my favorite option. The point is that there are many different ways to get loans and purchase properties. Research them all and become knowledgeable.

The point is that there are many different ways to get loans and purchase properties. Research them all and become knowledgeable.

There is so much to learn in the area of investing

2. Getting the Best Cash Flow Spreads

Many people, when investing in real estate, will bypass low-to-moderate neighborhoods because they think they will make the most money renting out luxury houses. There’s nothing wrong with that, in fact, I rent out mostly high-end properties now. However, the low-to-moderate neighborhoods.

Don’t just assume you know everything. As I’ve said, real estate is a learning process. Don’t be afraid to reach out to those that are more experienced than you and ask for tips.

3. Cycles Matter

Real estate is just like anything else in the marketplace in the sense that buying cycles matter. When supply is high, in other words, there are more houses on the market than be dipping soon. That’s the time to get properties if you want to buy and hold. The longer you wait, the faster you have to pull the trigger.

When demand begins to absorb supply, you should rethink your purchases. If you are buying and flipping, this is when you would purchase properties because you want to flip before a lot of new construction begins. You can still buy good properties in heated markets, but you have to really understand what you are getting into.

When supply is high... that’s the time to get properties if you want to buy and hold

There have recently been economic factors showing that we may enter a recession soon. This is something to keep in mind if you are a real estate investor looking to acquire more properties in 2020.

4. The Difference Between Mortgage Brokers and Bankers

There are a few key players you need in your real estate business, including lawyers and real estate agents, but you also need good mortgage bankers and mortgage brokers. Many people don’t know the difference, but these players can help you level up your real estate game.

A mortgage banker usually sells his own products. The pros to this are that they typically can close faster and can give the customer a low-interest rate or lower cost. The cons are that they sometimes can’t get a loan done because the products they’re offering are so limited.

Mortgage brokers typically work in what we call a “broker shop.” They represent many lenders and broker loans. They can often beat a banker because they have so many lenders available, but they typically only a broker who is experienced working with investors.

5. What Underwriters Look For

The final thing you may not know about real estate is what underwriters look for when you is your credit score. A 720 and up allows you to buy multiple properties and access loan also look at your capacity, which is your debt to income ratio. Especially after the housing crisis, they want to make sure you can pay off your mortgage. They also look at the collateral you have available, your character,

All of these factor into what loans will be available to you.