Investment Mortgage Guy

This is the million dollar question that I get asked each and every week. Both new and seasoned investors do their best to time the market right so they can best maximize their investment dollars.  Poor timing can have a huge impact on the ultimate success of an investment property to an investor. People who bought investment property in 2005, 2006 and 2007 have lost a lot of equity and may be even be disappointed that they ever bought an investment property to begin with or worse, just plain mad they bought.

If an investor will focus on the fundamentals of an investment property vs. market timing, I believe they will have the best chances of success. The fundamentals include: cash flow, financing terms, property condition, location and management. If you can obtain favorable terms in each (or most) of these categories, your property will be able to withstand most of the ups and downs of the real estate market. Most people who bought in 2005, 2006 and 2007, bought solely for appreciation. This, as we now know, was a big mistake.

The other big mistake I see most investors make is that they have no strategy to pay down their mortgage on an accelerated plan. I have some great tools to help people with that. You can learn more about that on my website.    You won’t enjoy the greatest benefits of your investment property until you own it. You don’t need to wait 30 years for that to happen. (Most of my clients can do it in 10 years)

So in conclusion, if the fundamentals look good, it will greatly increase your chances of success. Then do your best to buy near the bottom of the market. I believe that time is now or sometime very soon. I think some time mid summer we will see the market get back to what we call a “balanced market”.   In the Twin Cities, that’s about $22,000 listings. Right now we are sitting around $28,000 listings on the market and this number seems to get lower every month.

If you want help analyzing the fundamentals, give me a call 952-808-2828.

Rob Bonahoom

Mortgage Coach