Monday, June 24, 2024

Let’s Talk Real Estate Investing [Free read]

It is fortunate to live in a city that is beloved by not only those born and raised here, but also the large influx of residents that move here. It is thrilling to live in such a thriving market for real estate, which is largely impacted by the popularity of investors. Wilmington is a hotspot for people that wish to buy secondary homes – whether it’s for the purpose of long-term/short-term renting, vacation homes, etc.

We decided to interview the owner of Salt + Stone Property Group, Jesse Canady, to get his response on the most frequently asked questions about Real Estate Investing, and hopefully answer some of the questions you may have as well. You might be surprised how attainable passive-income really is!

Q: How do I determine the value of an investment property?

A: “When we evaluate a potential investment property for a client, we want two things to be solid and promising:
The market value: How that specific property ranks against other comps in the area. This is the actual amount the house would sell for.
The return on investment: How much money you will make monthly based on how much money you initially invested to acquire that property. This is usually displayed in an annual percentage. We like to see at least 12% ROI.“

Q: How do I know what the best real estate investment strategy is for me?

A: “We encourage people to take a step back and evaluate where they are in life… There are many options: Short-term rentals, long-term rentals, house hacking, etc. It all depends on how much capital you have, how risk-averse you are, and how much work you’re willing to put in (Do you want to be hands-on or hands-off?) There are multiple strategies you can utilize — we’d love to chat with you to determine your best fit.“

Q: Is there a way to begin investing in real estate with little capital?

A: “Yes, multiple ways… One that comes to mind is “house hacking”. This is when you buy a multi-family property or a property with an accessory dwelling unit as your primary home, live in one unit, and rent out the other to offset your mortgage. You could put as little as 3.5% down if you use a primary loan. Another great option is to utilize a “Cash-out Refi” (BRRRR Method). An example would be to buy a property that may need a little TLC with personal cash or hard money. Next, you force the equity into it by renovating it, rent it out, do a cash-out refinance to pull that capital back out, and repeat this process with that same capital! We’d be happy to discuss these methods in more detail.“

Q: How long does it take to see a return on investment?

A: “It all depends on the strategy you choose. For example: if you go with house hacking or the BRRRR method, you’ll almost immediately see a return because either your mortgage will be offset, or you’ll have someone else paying your mortgage for you and you’ll have your capital back. However, if you choose to do something like buy a piece of land or use a traditional mortgage on a property you put a long-term renter in, that would be a “buy-and-hold strategy” where you still see a return monthly, but you’re mainly letting that asset appreciate over time and growing equity on an annual basis. So, you can definitely see a return fairly quickly, but the size of that return is determined by the investment strategy you choose.“

Q: Do I need a real estate agent to buy investment properties?

A: “Not necessarily. Property exchanges hands often without an agent involved. However, especially when it comes to an investment property, we highly recommend using an agent. This is our full-time job, so there are tricks of the trade we utilize that the general public may not know, and we can help you analyze these deals the correct way. It’s our fiduciary duty when we work for you to make sure that you’re getting the best service and deal possible.“

Q: How can I learn more about real estate investing?

A: “First and foremost, you can always contact us at Salt + Stone Property Group. We have a great team of agents that are knowledgeable about Real Estate investing and work with investors. There are also podcasts, YouTube videos, books, etc. on investing that have great advice. We’re happy to point you to some of our favorite resources!“

If you are interested in Real Estate Investing or about buying or selling a primary property, feel free to contact Salt + Stone Property Group and they’ll be happy to walk you through the process.

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