The Grein Team: Your Investor Friendly Real Estate Agents

Real Estate Agents Working With Investors- What You Should Know

“Despite continuous change, there remain various ways for the small investor to participate and prosper. Real estate investing can get very complex, but one should keep in mind that it all basically boils down to providing usable space at a fair price to those who need it. The good news is that the opportunities for small, individual investors have never been better.”

~Jack P. Friedman and Jack C. Harris, Keys to Investing in Real Estate, Fifth Edition

Green road sign with text Property investment is in front of the blue sunny background. Here’s the good news – because people will alwaysneed a place to live, there will always be a market for real estate. With timely information, good habits, and the proper professional help, even a small investor can stand to make significant money investing in real estate in Missouri.

Here’s the bad news – successful real estate investing is never the result of some “get-rich-quick”. It does take REAL knowledge, REAL work, and a REAL commitment if you want to increase your income and build wealth through savvy real estate investing.

But just because you have made the decision to start investing in real estate in Missouri doesn’t mean you have the time or the inclination to become an instant expert in everything Missouri real estate-related.
In fact, regardless of how much experience you do or do not have in investing in real estate in Missouri, there are excellent opportunities to generate strong positive income, provided you keep in mind the following tips –

Tip #1 – Know What Kind of Income or Growth You’re Looking for from a Piece of Property

Investing in real estate is such a good idea because it provides income and/or portfolio growth in several different ways, primarily through regular rental income or through reselling/”flipping” a property for profit.

The first option, becoming a landlord, has three chief advantages:

• It provides regular, dependable income. Some typical median gross rents in small central Missouri cities:

  • Linn Creek– $1033
  • Four Seasons – $754
  • Lake Ozark – $740
  • Osage Beach – $631
  • Camdenton– $620
  • Sunrise Beach – $594

roi-or-return-on-investment• Inflation becomes a benefit, thanks to rising rents. For example, in August 2016, it is possible to get a 15-year fixed-rate mortgage for just over 2.5%. For the entire loan term, the interest rate and the mortgage payment will not go up, but rental rates will, at a current average of approximately 4% a year.
• Because occupancy rates for well-maintained properties are generally very high, rental property is considered a low-risk investment.
• Over the long term, rental properties are considered a good portfolio-building investment, as the property appreciates in value over the original phrase.

The second option, buying a Missouri property to “flip” by reselling it quickly for a nice profit can generate significant cash income, especially when the right property can be found –

• Distressed, “ugly duckling” property that can be bought cheaply
• A motivated seller who will take less than the asking price because of a firm cash offer
• An upscale neighborhood where sales are strong
• Because a flipped property needs to sell in 60 days or less to be profitable, this type of real estate investing is considered higher risk.

Tip #2 –Learn How to Evaluate and Analyze Specific Potential Properties

Too many real estate investors rely on “gut-feelings” rather than actual analytical calculating tools that can help them determine the suitability of an individual property. Calculating the income possibilities beforehand can give you a major advantage over other interested parties who may overlook a diamond in the rough.

Property Valuation and Analysis

Performance Spreadsheets for Investment Properties

Tip #3 –Understand the Risks of Buying with “No Money Down”

One of the most attractive facets of real estate investing is the ability to use leverage to purchase properties with little or no money down. Although this can be a useful option in certain situations, there are real risks with which you should be familiar.

What Not to Do When Using Leverage to Buy an Investment Property

Tip #4 –Understand the Different Mortgage Types to Maximize Profitability

condominium-garden-style-complex-in-lake-of-the-ozarks There are several different types of loans available to you as a real estate investor, and making the right choice between them will go a long way toward determining your level of risk and Return on Investment–

• Fixed Rate
• Adjustable Rate (ARM)
• Interest-Only
• Zero Down
• Balloon
• Exotics

Types of Mortgages Available to Real Estate Investors

Tip #5 –Know Your Own Abilities, Resources, and Temperament

This involves you doing a little self-analysis, in order to determine which path of real estate investment you should take.

• Do you have the time to look for potential investment properties?
• Do you have the ability to research all of the necessary background and financial information about potential properties?
• If you want to concentrate on rental properties –

  • Do you have the ability/expertise/time/desire to maintain your rental properties?
  • Do you want to deal with renters and potential tenants – advertising vacancies, taking applications, showing properties, collecting rent, handling evictions, etc.?
  • Are you familiar with all the latest landlord laws in Missouri?

• If you want to concentrate on quickly flipping properties –

  • Do you have the ability/expertise/time/desire repair and update distressed properties in order to get them in a salable condition?
  • Do you want to show the property to potential buyers?

If you answered “NO” to any of these questions, then you DEFINITELY need the next tip.

Tip #6 – Hire a Professional Real Estate Agent

The best way that you can protect your cash flow while at the same time growing your portfolio is to work with an experienced and licensed Missouri real estate agent like the Grein Team. A professional real estate agent who also provides property management can offer you several benefits:

• Personal familiarity with areas and properties under consideration
construction-area-with-man-working-on-ladder• A wealth of resources that can uncovered any useful information about a property
• The ability to coordinate with reliable contractors and maintenance workers perform all necessary repairs, cleanups, and “make-ready” tasks
• Handling of all administrative duties having to do with tenants– applications, rent collection, etc.
• Highly-visible listings for properties that you want to sell
• Frees up your time to either concentrate on growing your real estate portfolio and/or actually enjoy the fruits of your labor

Successful real estate investment in Missouri, and more specifically The Lake of the Ozarks area,is in direct correlation to both how HARD and how SMART you work. Do your homework and let someone else do the legwork, and you will soon find yourself realizing an excellent cash flow that allows you to rapidly build personal wealth.