Choosing to invest in buy and hold real estate is one of the smartest decisions that you can make. Buy and hold properties are generally a low risk, high return endeavor that can help you earn monthly income with very little effort, as well as a big payout when you decide to re-sell the property.
One way to make your investment more secure is by partnering with a buy and hold lender. If you haven’t thought about taking out any buy and hold loans, you should consider these advantages:
- The right loans will let you keep your capital in other investments, allowing you to diversify.
- A loan allows you to better leverage your wealth, opening up more and better buy and hold investment opportunities.
- A reputable lender can help you navigate the investment process, providing advice and support so that you avoid costly mistakes.
If you decide to take out a buy and hold loan, here are some of the main factors that you should consider:
- The reputation of the lender.
Before you sign anything, make sure you’ve done your homework and know who you are getting involved with. Watch out for hard money lenders who may be more interested in making quick deals than forming mutually beneficial investment relationships. Talk to current and past clients of your chosen lender, and check their rating with the Better Business Bureau.
- The terms of the loan.
Watch out for hidden fees and unfair terms in your loan agreement. Don’t sign anything that you don’t fully understand. If there are words you don’t know or aren’t sure about, ask for clear definitions. Don’t worry about sounding silly – better to risk being a bit embarrassed now than to pay for your lack of understanding later. Besides, a reputable lender should be ready and willing to help you navigate the ins and outs of your deal.
- The actual agreement.
You may decide to get a loan from a family member or colleague, or you may opt to enter into a joint partnership. These can be great ways to go if you have someone that you can rely on and work well with. Just make sure that you get all of the terms down in writing. Even if your partner is your best friend, you never know what might go wrong. And even if nothing goes wrong, a misunderstanding about who was responsible for what could ruin your friendship. Writing everything down will give you legal protection and help you avoid unnecessary complications.