The Basics of Mission Viejo Real Estate Investing
HGTV and others have blown the lid off of Mission Viejo real estate investing through vehicles formerly only available to those in the know or those in the dough. So here’s the run down on how those Mission Viejo real estate investing strategies work in for regular people like you and me.
You’ve got two choices in Mission Viejo real estate investing. You can go with the “Buy, Hold, and Rent” strategy or choose the “Fix and Flip” option. Here’s how they work.
Buy, Hold, and Rent – Choosing this Mission Viejo real estate investing option makes you an instant Landlord. Repeating this process enough times may make you a land baron, a real estate mogul, but hopefully not a slum lord. Here’s what you need to do:
- Buy a home or condo you don’t plan to live in. You can pay cash or you can take out a loan. Your interest rate on borrowed money will be higher than what you’d pay on a place for you to live in since the banks see this “non-owner occupied” situation as a higher risk for them and they will ask you to pay them for taking on that risk. And you’ll need a hefty 20% down payment if you do borrow money – low or no down payment options like VA and FHA financing won’t work on investment property that you don’t live in.
- Rent the home or condo you just bought. Through yard signs, word of mouth, extended family members, friends with college aged kids, online ads, your Realtor who puts it in the MLS, or a poster on the lunch room bulletin board, somehow you need to find a tenant(s) to rent your property. When you find a person with interest, you’ll need to check their rental history, credit history, employment history, and criminal records. Seriously. You need to find someone you can trust with your investment and can pay you for the honor of living there.
- Keep some extra money on hand at all times. You’ll need some extra money for things like overflowing toilets, faulty furnaces, busted blinds, and tenants who forget to pay their rent. These are commonly referred to as property maintenance and bad tenants. The third thing you need to keep extra money on hand for is the eviction process. Yes, when the rent money doesn’t come in from your tenant, you have to spend money to pay the sheriff to evict them. Fun times.
- Re-Rent your investment home or condo. Once your tenant’s lease is up and they decide to move on, or you have successfully evicted your non-paying tenant, you need to find a suitable replacement. You may need some of that extra money to re-paint, re-carpet, and restore your home or condo to rentable condition. That would be the fourth reason to keep some extra money on hand. You’ll also need to repeat the advertising process of yard signs, word of mouth, extended family members, friends with college aged kids, online ads, a Realtor who puts it in the MLS, or a poster on the lunch room bulletin board to find a likely tenant. Obviously the sooner the better for your cash flow situation.
Fix and Flip is the other option. We’ll look at that in the next segment on Mission Viejo real estate investing.
I’m Leslie Eskildsen, Realtor. Just keeping it real in Mission Viejo real estate.
Call me. Text me. 949-678-3373
Email me. Leslie@LeslieEskildsen.com Click the form below to begin your journey to Mission Viejo real estate investing.