Ready to invest in property.

[Richard Moore]

I'm ready to start a new career investing in real estate. The problem i'm running into is finding a Lender that's willing to work with a new investor. The real estate agents iv'e talked to will not go forward without a lender. According to them, without a lender I can't view the property. I have a licensed contractor, and i'm ready to start my career as  a real estate investor. Is there something i'm doing wrong or steps i'm missing? Please help

[Thomas S.]

Step one is to accumulate enough cash to make a significant DP. Starting out in investing cash is king. Once you have a solid track record they will start throwing money at you.

[Shawn Ackerman]

@Richard Moore in REI you need a team. A team that consists of Property Manager, Title Co, Attorney(some states), Contractor, Wholesaler(s), Agents & Lender(most important) Go in and get pre-qualified for a mortgage which will tell you where you can look and what your budget will be. Persist and you will WIN!!!

[Richard Moore]

@Thomas S. I have a significant DP according to a mortgage broker i'm communicating with currently. The problem is finding a lender and viewing the property.

[Richard Moore]

@Shawn Ackerman I agree I need a team. I shall manage the property for now and I have a contractor and a Mortgage broker. I will never give up and thanks.

[Shawn Ackerman]

@Richard Moore have you considered the Milwaukee market?  are you looking to house hack?

[Brandon V.]

@Richard Moore

What have you tried in finding a lender?  You can just go to the bank and ask to talk with one and they can assist you further with getting pre-approved.  Once you have that letter, usually you'll be able to see any property that is within that letter in my experience.  If you don't get pre-approved, you'll find out what you need to do further.

[Daniel Hanson]

@Richard Moore - it may also be the agents you are talking to.  I've never had to be pre-approved or even been asked about financing before an agent will show the property  (maybe that's a Milwaukee thing now that I think about it...).  Generally I've gotten started talking to either the listing agents for specific properties that are interesting, or the agents who advertise on those listing pages.  Those are the ones who are out there promoting themselves and are usually happy to show a property and get you as a potential client.   If you find one that works well for you, make them a buyer agent and take some of the risk out of the relationship for them.

[Marcus Auerbach]

@Richard Moore the correct sequence is the following:

1.) Find an agent who understands investing (most don't and have no incentive to learn ***)

2.) Find a lender: simple - the agent who knows investing knows lenders who work with investors

3.) Find a taregt area for your investment - discuss your goals with your agent and develop a strategy

4.) do plenty of drive by's so you know the area and schedule showings with your agent

5.) your investor agent will know contractors, property managers and other ressources you need

As for the pre-approval: it's in your own best interest to have financing lined up and ready to go before you look at properties. Good investment deals are gone within 24 hours. There are many investores looking for deals. I often write offers before I even have time to see the property, so you need to have your pre-approval letter or proof of cash funds ready to go. If your agent does not have that discussion with you, find a new agent.

***) Why there are so few investor friendly agents. It was shockingly hard for me to find an agent who understands investing when I started out. In fact I coudn't find one and made it through my first transactions with a regular residential agent, who was super nice, but had no idea about investing. You want to work with an agent who is also an active investor and therefore knows how the game works. 

Here are a few insights: agents get paid based on comission. Investors like cheap fixer properties and they like to look at many and then make many offers that often get rejected. So, it's a lot of work for very little money. Much easier to find a nice $500.000 home for a family than a smoking hot deal for $50.000 - and make TEN times more in comission. Median price in Milwaukee is about $225k. So why would any good agent want to spend his time with an investor? Would you?? Note: investor friendly agents like agent friendly investors.

[Svetlana Foley]

@Marcus Auerbach, all excellent points!  As a realtor, I LOVE working with investors, probably because I am bottom-line oriented myself and like a good deal or help someone who is looking for same.  The trouble with some so-called wanna-be investors is inability to make a decision.  If you did you research, ran your numbers, and know what you are looking for, JUST DO IT ALREADY!!!! looking at dozens of properties and being afraid of "making a mistake" doesn't do you any good - you are losing money by not having rents flowing in and learning from each transaction, and it is a sure way to have a realtor drop you like a rock.