Lake, Ocean or Golf Course View? – think you can’t afford it – think again!

I get asked a lot about investment property and what is a good choice. My immediate reply is a “Lake, Ocean or Golf Course View.”

       Many of our borrowers have taken out home equity lines of credits to purchase a new or investment property, or second home. Often times, borrower’s can not qualify for the best rates without putting at least 25% down. As long as your credit score is at least 640 you can basically buy any home you want with no money down – 100% financing (A second home or a new purchase you will move into). Every one of the things I tell you, is exactly what I do myself when I buy homes, second homes or investment properties. The thing that I am going to tell you is, what the smartest way to buy a investment property, by buying it as a second home.

       There are so many options out there, I can’t stress the importance of knowing what to look out for, by protecting yourself when you purchase real estate. How about the importance of knowing which loan is the best for me & my family? Should I do a 100% financing loan or get the best rates? How about the importance of a good home inspector? Where should I buy? What should I look out for?

       I have been in this business since 1990. I have found out that there are very few “truly honest” people in this business & that bothers me. Looking at that positively, from my perspective, I stay as busy as I want because of that. So, everything I tell our clients & employees is what I would do myself. Not too many people do that!

       So what is the smartest way to buy an investment property? Well, a lot has to do with the financing you choose. Believe that! It is probably the most important aspect of the purchase. This is what I recommend to our clients depending on how much equity they have in their home & their current interest rate. A strong way to purchase real estate is to own it until it is paid off. Then the income you get from that property will be your retirement income. There are various buy & sell “seminars” out there.

       I agree in buying “Trophy” properties & owning them until they are paid off. That means a 30, 20 or 15 yr fixed mortgage only. If they do not produce a monthly income for you & that is what you need then put a larger down-payment down. Buy only properties with Lake, water/stream, Ocean, or Golf course views. Own it for a minimum of 7 years (unless you plan to SELL and then upgrade to a higher value HOME). If you go back to Southern California’s history and look at what real estate prices sold for, you will find that as long as you owned the property for at least 7 years, it was worth more than what you paid for it.