Buying Your First Investment Property

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By Donna Robinson

"Begin With The End In Mind"

I first heard the phrase "Begin with the end in mind" in a Steven Covey book called
The 7 Habits of Highly Effective People. This expression makes a lot of sense
because the fact is, you can't get where you're going, unless you know where you
want to go.

Most new investors understand that real estate is an investment vehicle that makes
sense. We all know that many fortunes have been built with real estate. But when
you are first getting started, all the available information can be very confusing. I
often receive emails asking "what strategies should I use?" or "Where should I look
to find deals?"

One reason these issues are so difficult to understand and sort out when you are
new to the investing game is that the answer to the question can be different for
every individual.

Seminars tend to package information in a "one-size-fits-all" crash course. But this
inevitably leaves unanswered questions for each individual user. Simply put, each
person has their own individual situation with regard to credit, income, employment,
assets, etc. All of these factors can affect your investing choices and objectives.

Compounding this confusion is the sheer number of strategies. Should I own rental
property? Should I fix up and resell? How about Options? Or, how about buying tax
leins? There are so many choices, how is one to know what to do when just starting
out?

I can remember floundering around myself. I spent thousands of dollars on different
courses, trying to put all the pieces together and gain enough understanding to
know what I should do first.

It seemed that no one wanted to tell me anything useful unless I paid them first. I
soon found that no matter how much money I spent, there were many unanswered
questions. I felt frozen by fear, because I simply did not understand what to do first.
As a result, it was several years before I actually felt comfortable enough to get
directly involved in buying a property.

Today, after having seen and participated in many deals, I know that step one is
decide what you want real estate investing to do for you. In short, where do you
want to go?

Like any trip, you start out by deciding where you want to go. Once the destination
has been chosen, you figure out the best way to get there.

Many of the most successful and wealthy investors I know, built their fortunes with
rental property. Some of them own 40 or more rental houses. Some of them own
commercial properties like gas stations, storage facilities, or office buildings. They
each had the same destination, that of cash flow from rental income, but two
drastically different ways of getting there.

Frankly, most of the really successful investors are very patient men and women
who build their portfolios slowly over a number of years. They are cautious and
prudent, buying only when they know the deal is a good one.

Today, many people are lured into investing because they have heard the stories
about how you can buy property with no money down, and take out enough cash at
closing to pay off all your debts. This is possible, but creating one debt to pay
another does have it's risks.

Let's say that your ultimate objective is to achieve $5,000 per month passive
income from rental property. Now, think of that objective as if it were a city on a road
map.

Most cities have a number of different roads you can take to get downtown.. It is the
same way with your investing. Different people will arrive at the same destination,
each one using a slightly different route to get there.

Once you decide where you want to go, your route to your destination will be
determined by your financing options. .

If you have great credit, income for which you receive a W-2 statement, and lots of
cash for a down payment, your financing options will allow you to take virtually any
road you wish. The fact is, good credit and cash will get you where you want to go a
lot faster. But it's not the only way.

If you are credit challenged, self-employed, or lack cash for down payments, your
ultimate destination can be the same, but you will need a different route to get there.

Your financing options determine the route you have to take to get to your
destination. In essence, the answer to getting started is find out what kind of
financing you can get, and then find deals that work with your available financing
options.

If you can't get any kind of financing at all, you can still buy deals where the seller
will agree to finance the deal, or some scenario where financing is provided without
you having to qualify.

If you have decent credit but no cash, there are investor loans with low down
payments, that may make it easier for you to get in with little cash.

If you have great credit and cash - hop on the expressway. Look for any good deal,
since you can get a loan at excellent rates, in addition to taking advantage of any
good seller financing deals that come your way. You have the most options for
getting to your destination.

No matter where you start from, you can still wind up at the same destination, and
achieve the same objective.

Step One: Decide where you want to go. Then, get with a good lender to find out
which roads you will be able to take. Even if you have to start out on the "no cash,
no credit" back roads, remember that sooner or later, if you keep driving, you will
find an access ramp to the expressway.

Donna Robinson is an investor, author and consultant on real estate investing,
located in Atlanta, GA. Read more of her articles and get her newsletter on her
website, http://www.RealEstateWholesaling.com

Her email address is service@realestatewholesaling.com

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