The Pros and Cons of Non Recourse Loans
When it comes to looking for investments, probably one of the safest available is to invest in some type of real estate
. One of the many advantages to investing in real estate is that it is going to bring you a return in the here and now, as well as in the future. The best way to determine how you can get the most for your money is by doing your homework, and looking at all of the factors that are involved in this type of potential investment.
Step One:
One of the things you want to consider is what the market is like at the time you are thinking of investing. Is it a buyers or a sellers market? Obviously you are going to want a buyers market in order to get the most value for your dollar.
However, it must be remembered that in a buyers market it can be a little tougher to arrange the financing. You have to take a look at your financial situation and see what type of financing you are going to be able to put in place.
You are not going to have that much of an advantage if you have to do some financing that is going to be at a high interest rate. Of course, the ideal situation is to be able to pay a rock bottom price for the property you are purchasing and get your financing at a good prime rate. Or, preferably, find private money to help purchase the property.
Step Two:
Assuming that both of these conditions are in place then it is the optimum time to start shopping around to see what kind of deal you are going to be able to get. It is important however, to look at the whole picture and not just at the great price of the potential property you are thinking of investing in.
If the property is not going to be able to provide you with an income at the current time, then this is something you are going to have to give consideration to, as to how important this factor is. If you are looking at strictly a long term investment in respect to building equity in your property then this may not be much of an issue. However if you are looking for rental income as a part of your investment plan then this is important.
Step Three:
Once you have found a piece of investment property, such as perhaps a small apartment building, or a multi-dwelling house, then the next thing you need to consider is how much of an investment has to be made in order to bring it up to the standards that is going to be able to bring you the rental income that you are looking for.
If you are looking at a great deal of work, both in time and money, then this is something that has to be strongly considered. However, if you happen to be a handyman, have extra time on your hands, and you are going to be able to get a great deal on this property, then it may be a viable investment. It's all these little things that you really need to think about carefully when you want to invest in property.
Step Four:
Another thing you have to be very cautious of is to make sure you check out all the rulings, such as the bylaws, as to whether they will allow you to turn the potential home that you are thinking of buying into a rental property. Some times homes can only be registered as single family dwellings. The other thing you have to consider is what has to be put in place to meet the fire and building codes. These are all things that you need to get the answers to before you enter into any of these kinds of property investments.
Step Five:
As far as the legalities of the home goes, it is important that you have a good real estate lawyer that is going to look after all of the requirements in that area.
Then you need to decide on the particular property, if you are going to convert it into units, then how many units is it going to comfortably hold?
It's also important to take a look at what the prospective tenants are going to be for the area. If they are going to be family tenants then your units have to be larger than those of a bachelor or bed sitting apartment for example.
These are just a few of the standard things to consider before you make your final decision to put an offer in on the potential property of interest.
The Pros and Cons of Non Recourse Loans
By: Dave Lindahl
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