5 Financial Steps to Take Before Investing in Real Estate

5 Financial Steps to Take Before Investing in Real Estate

  • Elena Licari
  • 01/5/22
If you’ve been thinking about investing in real estate, here’s what you need to do before heading out to shop for properties.

1. Create a financing plan

  • What’s your current income?
  • How much do you have in savings?
  • Can you get a mortgage loan?
  • Will you pay in cash?

2. Keep Your Credit Healthy

  • Request a copy of your credit report.
  • Dispute any errors.
  • Pay all your bills on time.
  • Pay down high-interest debt first.
  • Be strategic about opening or canceling lines of credit.

3. Get Pre-approved for a Mortgage

  • You’ll need the following in order:
  • Personal documents.
  • Tax returns.
  • Proof of income.
  • Proof of assets.
  • Summary of debt.

4. Do Your Homework

  • Compare different mortgages from different lenders.
  • What interest rates are they offering?
  • How much will they lend you?
  • Check-in with your current bank and others, too.

5. Establish Liquid Funds

  • You’re going to need some cash on hand to buy, if only for a down payment and closing costs.
  • Don’t forget about renovations and repairs.
  • If you’re flipping a house, you’ll need to consider your monthly cash flow.
  • Secure a backup source of cash.

Work With Elena

Elena's philosophy is simple: clients come first. She pledges to be in constant communication with her clients, keeping them fully informed throughout the entire buying or selling process.