With all of the buzz lately that has been generated by Warren Buffet fans, investing in real estate seems to be a "No Brain-er".
However, where should your first stop be? During my walk this am, not on a Treadmill but on a Treadclimber(much harder :-) ), I read an article about Investing in Real Estate.
While this is a Business Blog for the Santa Clarita businesses, I felt the need to post up my thoughts about making a lender the pivot point in your real estate investment strategy.
"Who's going to have your six?" While the "world view" of real estate agents is akin to some of the most deceitful salespeople in the free market, we think your first step should be with a real estate agents that are themselves FREE AGENTS!
Here is something you may not know or don't remember. When you purchase any real estate, there are fee's that all buyers must pay, these costs are known as "closing costs". Mostly they consist of three components:
- The investors part of the Escrow Fees
- The investors portion of the Title Fees
- and The Lender's Fee
- (depending on the transaction, most can be covered by the Seller, read more about closing costs here..)
As you can see the real estate agent's commission is not part of the fees(closing costs), when you purchase an investment property.
Our clients come to us to find out the "why" of investing in Real Estate. Why should they invest? Why should they invest now? Why will they benefit from investing in real estate? Why should they let their investment real estate agent of choice, do the referring to vendors.
Within a real estate transaction the Real Estate agents is the ring leader - the pivot point - the hub on which the other parts are set in motion. GREAT real estate agents will have members on their team that can coordinate a closing that will benefit the buyer/investor.
The agent has lists of home inspectors that get the job done and don't miss anything. The real estate agent will know the pest inspectors that will be the most critical when needed for inspections. The real estate agent knows the inventory and those listings that are "going to be" listed for sale before they are made live.
Networking in real estate is critical from an investment strategy. Hooking your trailer to a real estate agent that is made aware of listings(investment options), that are under contract, but have yet to be placed onto the market for sale, will mean you getting something other investors may not even have a shot at.
The lender? They are the money end. You are paying their fee. With a real estate agent, we are compensated by the SELLER. No Matter who the seller is. The Seller could be a bank, investment group, private party or the short sale approval department of a bank. Either way, you don't pay your realtor's fee.
When you find a real estate agent that understands loans and lending, knows the best loan products and has a solid financial base, you have found someone that you need to keep close. With that kind of knowledge, they can run the interference for you when it comes to the lender's fees. You are paying them, it's nice to have another set of eyes on the investment financing game.
BE Safe - Invest well and contact your real estate professional to run the interference for your real estate investment dreams.
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