Mortgage Financing Tips When Buying an Investment Property:

Prices are finally starting to bottom out in most of the best areas around the Greater Phoenix Market and investment opportunities with positive cash flow are easy again for come by. In the last 30 days I am once again getting calls from investors who would like to buy at the low end of the market for the long term growth to our market.

If you do decide to purchase an investment property in Arizona, here are some tips from a mortgage advisor who not only has helped many investors finance property but also owns investment property himself.

•· Tip #1- Know your investment strategy for making money. I have been to enough investment seminars to tell you that the pro's will always tell you to have at least 1-3 strategies per property of how you are going to make money on that investment. Some strategies might be long term rentals, fix and flips and buy and hold such as land, etc. Whatever your strategy is, figure it out before you put in an offer.

•· Tip#2- Understand all hidden costs of the property. I have helped a lot of investors in the past buy 4plexes and some investors were not aware of all the hidden costs until after they owned the property. These fees could be sales tax, garbage, sewer fees, HOA dues, repairs, management fees, attorney costs etc. You need to figure these out and budget for them to make this investment make sense.

•· Tip#3- Understand your tax strategy. Always consult with your CPA and figure out how the tax benefits help with your Return on Investment.

•· Tip#4- Pick the right mortgage for the long term. I had some clients that thought they would only own their investment for 2-3 years and got in trouble when they did not look at long term options. Right now with mortgage guidelines tight, most conservative mortgage products are your best deal for your dollar.

•· Tip#5- Be prepared for a larger down payment if financing is needed. Most lenders now want an investor to put a good down payment. 20% down has become more of the minimal requirement.

If you are in the market for an investment property and have some questions about mortgage financing, please feel free to give me a call.