Essential Techniques and Resources for Success

Lessons most real estate investors learn the hard way

by David Glenn | May 20, 2017 | CRESTICO

Investing in real estate can be one of the most exhilarating things an investor does. There is a thrill that comes with finding a good deal, improving a home and, making a killing off of the sale. Most real estate investors don’t start out that way, however. In fact, many, if not most, real estate investors will tell you that they have made many mistakes and lost quite a bit of money as well. They will also tell you it was worth it because of the lessons learned that could be utilized later down the line.

Here are a few mistakes real estate investors typically make in the beginning. Avoiding them can save a lot of heartache.

Hard money

Hard money loans can be an incredible tool. If you have not heard of hard money loans, they are quick loans that are based on the value of the asset (the home, or piece of real estate) instead of the person getting the loan. This means someone with bad credit good get a hard money loan, as long as it is a good deal and the house is worth a lot more, or has a lot of potential.

Hard money loans are usually less than a year, and are just used to snag a quick deal, maybe fix things up, then sell or convert to a regular loan. They have incredibly high Interest Rates – often as high as fifteen percent.

Because of the high interest rates, investors usually hold hard money loans for as little time as possible. If a mistake is made and they end up holding the loan significantly longer than expected, the interest expenses can rack up and put them in a miserable place. If they hold past the original time of the loan, things can get really ugly.

Simply put, if you are going to use a hard money lender, be careful, have exit strategies and backup exit strategies to be sure you are not stuck holding the bag.

Signals

Most good investors are able to use signals and see when the signs point to selling and when they point to buying. If you are able to recognize these signals then you are able to capitalize much quicker and make money much faster.

Research

If you think you are getting a good deal on a piece of property then it is time to be careful. There is often a reason a piece of property is priced the way it is. While good deals do exist, bad deals disguised as good deals also exist.

Research the neighborhood, the history of the home, the future of the area, rental prices, the real estate market as a whole, and everything else you can think of. If everything checks out, you can feel confident in the deal you are getting.

Understand expenses

Your mortgage will absolutely not be your only expense. There will be random expense all along the way. Try to have an emergency fund for when something big comes up. New investors are often surprised to realize how much some home repairs can cost. One recommendation that some investors will give is a home warranty. A home warranty is a warranty that gives you the ability to insure almost everything in your home that can break. From water heaters, stoves, microwaves, refrigerators, and more. While these are not killer expenses if broken, it may be a good idea to have a warranty in place until you have a large enough savings that you can replace and repair these items yourself.

This list is not comprehensive in the least. New real estate investors make mistakes every day. It will happen no matter how big the list. Find a mentor who has done what you are looking to do. Get advice and confirm your first few deals with them. Someday you may be that very mentor.

5 Details to Think About When Moving to a New Home

by David Glenn | May 10, 2017 | CRESTICO

Moving into a new home can be exciting, but it also can be stressful in many ways. In addition to the stress associated with physically relocating all of your belongings into a new home, your life may be affected in various other ways by your move. In fact, it may take several weeks or longer to fully get accustomed to life in your new home. These are some of the more significant details of your life that may change when you move, and by learning about them, you may be able to prepare for them ahead of time.

The Cost of Home Insurance

Home insurance is typically required by your lender, and it offers numerous benefits. For example, it may pay to repair or replace your home if it is damaged by severe weather. Home insurance rates vary based on the size and location of your home as well as several other factors. Many homeowners pay approximately $1,000 or more per year on home insurance. While this premium is typically paid in monthly installments, it nonetheless can take time to get accustomed to this extra expense in your budget. Consider looking at companies that will provide a bundle that may include car insurance and other coverage. Getting cheap insurance quotes before you move is a great way to save money on this expense.

The Length of Your Commute

The average commute time workers must deal with varies substantially based on where you live, but most workers commute at least 20 to 30 minutes each way, and some have a commute length that exceeds one hour each way. A smart idea is to travel along your new commute path to your workplace before you move. This will help you to avoid being unpleasantly surprised by a much longer commute length than you planned for.

The Cost of Your Utilities

Utilities expenses can increase when you move into a new home, and you should prepare for this possibility in your budget. Keep in mind that the size of the home is not the only factor that affects utilities costs. New utilities rates for a specific location, how energy efficient the home is and more will also affect your utilities expenses. You can usually obtain historical utilities costs for a specific property from the provider to get a better idea about what your own utilities costs will be.

Repairs and Maintenance Needs for the Property

If you are purchasing a new home, you will assume the condition of the property from the previous owner. Reviewing the property inspection is a great way to learn more about repairs and maintenance tasks that need to be addressed. Some items may require your urgent attention as soon as you move in, and others may be placed on your to-do list to complete within the next few months. You should, however, budget for these expenses as soon as possible.

The Need for Additional Storage Space

When you move into a new home, your storage needs can change dramatically. First, you may have less storage space in closets and attics, and you may need to find an additional area to store some of your belongings. In addition, the size, number and layout of your rooms may change. This means that you may not have a space for all of your furnishings. You could choose to get rid of some unnecessary items by selling or donating them. However, others prefer to hang onto their items. You could consider renting a storage unit to tackle your current storage issue.

As you can see, many of your current life factors can change when you move into a new home. These various factors can affect your budget, your daily routine and your general home life experience. If you are preparing to relocate to a new home, it is important that you review some of these various factors up-front so that you can properly prepare for them. By doing so, you can more easily transition into life in your new home.

Shopping Tips for This Year’s Home Buying Season

by David Glenn | May 9, 2017 | CRESTICO

A whopping 50 percent of homes are sold in the summer. Even though there can be benefits to buying at other times of the year, you might find that shopping for a home during the traditional home buying season is ideal, since you can go house shopping while the weather is warm and so that you can buy a home and move in-between school years for your kids.

Regardless of why you are choosing to go shopping now for your home, you probably want to make sure that the process goes as smoothly as possible. Luckily, if you follow these tips, you can help ensure that you have the best possible success when shopping for a home.

Set Your Budget First

First of all, you’ll want to set your budget first. There is really no reason to waste your time looking at homes that you can’t afford, after all. Plus, you don’t want to buy more home than you can easily afford, which can make things a lot more stressful once you’re actually in the home and making your mortgage payments.

There are online calculators and basic formulas that you can use when deciding how much of a home you can afford. However, you will generally only want to use these numbers as a starting point. Only you really know how much you feel comfortable paying for a home each month, so it can be worth it for you to sit down, make a budget and get a number in mind of how much house you can afford before you ever start shopping around.

Get Prequalified

If you are unsure of whether or not you will be able to actually qualify for a mortgage, it can pay for you to work with a mortgage lender to get prequalified. Few things can be as upsetting as house shopping and falling in love with a house only to find that you can’t actually buy it because you can’t get approved for the loan. By working with a lender now, you can determine if you will be able to get a mortgage and can get an idea of how much you will get approved for.

Make a List

Before you start shopping, think about the things that are most important to you. You might want to have a certain number of bedrooms to ensure that the home will be a good fit for your family, for example, or you might prefer a home that has a nice, large yard for gardening. Making a list of these things can make it easier for a Real Estate agent to show you homes that you will actually be interested in and can help keep you focused on what you really want so that you don’t start looking at homes that won’t be a good fit.

Don’t Be Afraid to Negotiate

When looking at homes, don’t be afraid to negotiate. In many cases, you can negotiate a lower price on a home. Some sellers are also willing to take certain steps to sweeten the deal and encourage you to choose their home out of the ones that you are looking at, such as by covering closing costs or adding in a budget to swap out the flooring or to paint.

Plan for Other Costs

You shouldn’t just be thinking about the cost of buying the home. You should also be planning for other costs, such as by saving up for closing costs, shopping around for home and auto insurance quotes so that you can secure affordable homeowner’s insurance and thinking about how much you will have to spend in utility deposits and moving expenses.

If you are getting ready to start shopping for your dream home, you probably want to ensure that the process goes smoothly. Luckily, following these tips can help you enjoy the best possible success when shopping for the home of your dreams.

Everything You Need to Know About Buying Your First Home

by David Glenn | Apr 24, 2017 | CRESTICO

Buying your first home often comes with a wide range of emotions. You may understandably be excited about this prospect and eagerly looking forward to being a homeowner. However, you may also be feeling stressed out about finding a new home, paying for the home and the unknown aspects of the buying and mortgage application process. By learning more about the process, you can be better prepared for the experiences in store.

Location is Critical

Long before you begin looking for a dream home, you should decide on an ideal area of town or even a specific neighborhood that you want to focus your attention on. Everything from the crime rate and the quality of the schools to the cost of insurance, property appreciation rates and even your commute time will be impacted by the location you select. Ask your Real Estate agent to provide you with tax and crime data for neighborhoods you are interested in. In addition, the location of a specific home in a community is important. Visit the home at various times of the day to determine how noisy the neighbors are, how busy the street is and how many cars are parked on the street. You can also research the properties nearby to ensure that you will not have to deal with Construction or other issues in the near future.

The Closing Costs Can Be Significant

You may have gone to great lengths to save up enough money for the down payment on a new home, but you may have underestimated the closing costs. In some cases, closing costs may be as high as two to three percent of the sales price of the home. With this in mind, take a closer look at your budget to ensure that you can fully afford to buy the home you want. You may consider asking your mortgage lender for a firm quote on closing costs as well.

There May Be Hidden Property Damage

It is easy to fall in love with a home that you tour, and you may be inclined to think that the home is in great shape because it looks fabulous. However, underneath a recently cleaned up, a well-manicured lawn and a fresh coat of paint, you may find serious and costly damage to the home. A property inspection is optional in many cases, and some home buyers may be inclined to save a few hundred dollars by avoiding this expense. However, a property inspection can provide you with detailed information about the true condition of the home. You may be able to negotiate with the seller to repair some of the damage before you finalize your purchase.

The Cost of Ownership Is Higher Than You Think

Many new home buyers fail to properly adjust their budget when preparing to move. Your new Home Purchase comes with added expenses related to home insurance, property maintenance and property taxes. It also may affect how much you pay for commuting, utilities and more. Even your personal auto insurance premium may change when you move because you may be changing zip codes. In addition, when you take on a significant debt, such as a home mortgage, you may be more inclined to need life insurance. There is additional cost for this. Carefully review all aspects of your budget to determine which items may change once you move. By doing so, you can minimize the financial stress you may feel after you move in.

While buying your new home can be a monumental event, many first time home buyers are unfortunately displeased with various aspects of the process. Proper preparation and planning can help you to reduce this possibility with your own home buying experience. You can easily explore these factors in greater detail as you embark on your home buying journey so that you are better prepared for the experience.

How to Save Money For Your First Home

by David Glenn | Apr 18, 2017 | CRESTICO

Some home buyers are able to purchase their first home for as little as three percent down or less. However, three percent on a decent home can still cost a small fortune. In some markets, it may equate to tens of thousands of dollars or more. You also have closing costs to pay for when buying a new house, and these can easily cost you another three percent of the sales price or more in some cases. Saving up enough money to purchase your first home can seem like an impossible feat, but you actually can accomplish this goal if you put your mind to it. These steps can help you to reach your goal more easily.

Determine Your Goal

Establishing a financial goal gives you a target to reach for, and it can help you to more easily focus on saving. First, research homes that you would like to purchase, and pay attention to their approximate sales price. Then, research Loan Programs that you may qualify for, and pay attention to the down payment requirements. Using this information, you can determine the approximate amount of money you need to save as a down payment. In addition, factor approximately three to five percent of the sales price for closing costs. It is always better to estimate on the high side so that you are not caught off guard by extra expenses. In addition, most lenders want to see that you have at least three to five months of the estimated mortgage payment available in savings after the down payment and closing costs have been taken into account. When you add all of these figures up, you will determine your financial goal.

Create a Detailed Budget

Now that you have a firm goal in mind, you need to review your monthly budget. Some of the most financially successful people have a rolling budget that extends for many months. This is because expenses can vary from month to month, and an extended budget gives you the opportunity to budget for these fluctuations. Take time to look for ways to trim back your expenses. For example, you could shop around for more affordable auto insurance or switch from cable TV to Internet-based programming. Many people can easily trim several hundred dollars or more from their budget with proper effort. Allot this money toward regular savings. It is wise to include a line item in your budget for savings and to consider this is a necessary expense.

Make Automated Savings Transfers

Some people find it difficult to adjust to saving money. It essentially takes a large chunk of money out of your budget each month. However, when you scale back your regular expenses, such as by eliminating your cable TV plan, you do not necessarily need to adjust your lifestyle and regular spending habits to save money. You can easily set up an automatic savings transfer that moves the money to your savings account on each payday. This way, within a few months, you will easily become accustomed to saving money.

Save Your Windfalls

Many people receive windfalls throughout the year. For example, you may receive a production or holiday bonus from work, a tax refund or holiday or birthday presents in cash. In some cases, this can add up to several thousand dollars or more over the course of a year. Rather than spend this money, add it to your savings account. This is a great way to see an instant increase in your account balance. In addition, if you receive a raise, increase your savings transfers by the amount of your raise. This way, you will increase your savings contributions regularly without impacting your current lifestyle.

It may take you several years to save up enough money to purchase a house. When you follow these steps, you will see your savings account balance grow over time. Eventually, you will reach the goal you have established.

Simple Tricks That Will Turn Your House into a Home

by David Glenn | Apr 11, 2017 | CRESTICO

Moving into a new house is exciting, but it’s not necessarily going to feel like home from the very beginning. Luckily, there are plenty of things you can do to make your house start to feel warm and fuzzy. Here are a few tips for turning your house into a home you can’t wait to return to everyday.

Decorate with Your Favorite Colors

One of the best ways to make your home feel like yours is to put your favorite colors around, according to Better Homes and Gardens. Maybe you prefer neutrals and want to stick with a palette that makes you feel calm and relaxed. Maybe you love bold colorsand want to paint one whole wall a bright blue. Whatever color scheme you prefer, surround yourself with it.

Get Something Cooking

Nothing makes a house feel more homey than food cooking or baking. Prepare your favorite meal or put cookies in the oven to fill your home with delicious smells. Try to make something that’s comforting and that reminds you of the meals you used to eat in your previous home or when you were a child. Don’t have time to whip something up? Pick up a candle that smells like fresh baked cookies or another yummy treat.

Showcase Your Experiences

When you look around your new house, you may not spot anything that feels inherently “you.” This is a good time to start framing photos and displaying memories. Dig through childhood photos, pictures from your last vacation, portraits of your family, etc. Even ifyou just tack a few up on the fridge for now, they’ll be a good reminder of your life and everything you love. You can also create little areas with souvenirs and collectibles you’ve picked up during your travels. You can visit this part of your home to reminisce about everything you’ve done.

Start Creating New Rituals

Moving into a new house can upend your rituals and ways of doing things. Start putting new rituals in place right away. According to Good Housekeeping, this is one of the best ways to make your house feel more like home. Plan for Friday movie nights in your your home theater with the family, Sunday morning brunch on the porch, doing yoga together after everyone’s home from work and school, etc.

Decorate with Family Heirlooms

If your family heirlooms spend most of their time tucked away in a closet or basement, pull them out and find a place to display them. Looking at items that belonged to several generations of your family will be comforting and will make your home feel more personal. Plus, they’ll make great conversation pieces whenever you have guests over.

Make Sitting Areas Comfy

If you want to start feeling cozy in your new home, start adding cozy layers to it! According to Pop Sugar, adding a throw to a chair or couch that you love to relax on is the quickest way to make it more comforting and welcoming. It’s also a super simple way to decorate and you can swap out the throw to match the season.

Don’t Worry Too Much About the Mess

When you look around your home and see the remnants of a busy morning or weekend, you’ll be reminded of your family and your experiences. Do
n’t worry too much about keeping your home in tip-top shape every second of the day. The scratches, clutter and flaws are the proof that your house has become a home.

Your house has a specific goal: to provide you with shelter. Your home, on the other hand, is there to help you get through all of the wonderful and difficult parts of life. Turn your shelter into a supportive, welcoming and customized home by surrounding yourself with the items you love and that make you feel most yourself.

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