If you’ve been thinking about investing in real estate, here’s what you need to do before heading out to shop for properties.

 

  1. Create a financing plan

  • What’s your current income?

  • How much do you have in savings?

  • Can you get a mortgage loan?

  • Will you pay in cash?

 

 

 

  1. Keep your credit healthy

  • Request a copy of your credit report.

  • Dispute any errors.

  • Pay all your bills on time.

  • Pay down high-interest debt first.

  • Be strategic about opening or canceling lines of credit.

 

 

 

  1. Get pre-approved for a mortgage

  • You’ll need the following in order:

    • Personal documents

    • Tax returns

    • Proof of income

    • Proof of assets

    • Summary of debt

     

     

     

  1. Do your homework

  • Compare different mortgages from different lenders.

    • What interest rates are they offering?

    • How much will they lend you?

  • Check in with your current bank and others, too.

 



 

  1. Establish liquid funds

  • You’re going to need some cash on hand to buy, if only for a down payment and closing costs.

  • Don’t forget about renovations and repairs.

  • If you’re flipping a house, you’ll need to consider your monthly cash flow.

    • Secure a backup source of cash. 

This content is not the product of the National Association of REALTORSĀ®, and may not reflect NAR's viewpoint or position on these topics and NAR does not verify the accuracy of the content.