The Ultimate Step-by-Step Guide to Real Estate Investing
Many people tend to shy away from real estate investing due to its large barrier to entry - don't let that be you! To make real estate less intimidating, find below a step-by-step guide for real estate investing - which everything you'll need to make the real estate investing process easier for you.
Step 1: Build Your Credit Score
Build Your Credit Score. The better your credit, the better mortgage rates you'll be able to secure. Your score should at least be higher than 620.
Use Credit Karma to Find out Your Credit Score
Step 2: Save Your Money
Typically, you'll need to put down 5 - 20% to buy real estate depending on the type of loan you secure. With Doorvest, you can invest in real estate with as little as $30k. Save about $2.5k a month, and you'll soon be able to become a real estate investor yourself in 1 year.
Step 3: Be Able to Show Your Income
As you go through getting prequalified or applying for a mortgage, lenders like to see consistent and stable income. Typically you'll be required to show 2 years of W-2s and your 2 recent pay stubs.
Step 4: Get Pre-Qualified or Pre-Approved
During this stage, the bank will run your credit, review your tax returns, pay stubs, and other documents before giving you a pre-approved mortgage amount based on the information provided.
Frequently Asked Mortgage Questions
Now, this is where Doorvest can make the process easier, and simpler for you. 😃
Step 5 (Traditionally):
You'll want to look at everything you want to buy, research the home, visit the home at different times of the day to get a feel of the neighborhood, making offers on homes (with the potential of losing many times), schedule inspections and assuming you eventually close on a home you like - it comes the renovations. Where do you go to find contractors? Who do you trust to do the work? And lastly, placing a resident and property managing. Filtering out applicants, doing background checks, and reviewing bids from contractors.
Step 5 (With Doorvest):
Although there's nothing wrong with the traditional route - as you can see, it is not for everyone as it requires a lot of work, time, and research. Sit back, and relax - literally. This is where Doorvest comes in and alleviates the headache and does the heavy lifting. Instead of having to do all the work traditionally, you'll let Doorvest know about your investment goals; we'll seek out a property that aligns with your goals, then buy, renovate, and place a resident. We'll sell the property to you and what you get is an income-generating home on day 1.
With the step-by-step guide for real estate investing above, you're well on your way to becoming a real estate investor!