Introduction
Nowadays, investing in real estate in the United States is booming. For those who want to buy a house in the United States, how to purchase the ideal residence has become a top priority for many investors. Therefore, the strategy is very important when buying a house in the United States. If you master the buying strategy, you can achieve twice the result with half the effort. This article will introduce the investment strategy of buying a house in the United States in detail through real cases for you.
✔ What is the main process of real estate investment in the United States?
✔ What should be noted when investing in buying a house in the United States?
- What is the main process of real estate investment in the United States?
Buying real estate is the most important decision in your life. However, when you invest in real estate, you should realize that this is for commercial purposes. Therefore, you don’t buy based on your preferences but based on the investment prospects. Your investment goal is to make the real estate bring you profits. A common mistake many people make when investing is that they always buy residential properties or local properties so that they can keep an eye on them at any time.
There are mainly five steps (referred to as BRRRR) for investment in purchasing a house in the United States:
- Buy
Buying represents what to do after buying a house. The information of real estate in the United States is very transparent. After you are interested in a property, the agent will help you evaluate the price of the house and estimate the current value of the house in the recent market transactions. If the seller’s asking price is too high, the agent will help the buyer negotiate the price down. If the asking price is lower than the market price, the agent will help the buyer seize it quickly. Sometimes when multiple buyers are interested in the same residence, in order to obtain the residence, it may be necessary to offer several times the asking price.
- Repair
Repair represents doing some renovations to increase the value of the house and make the house easier to rent out or sell.
- Rent
Find a tenant to come in and collect rent to make money. When investing, it is not the best to buy a house with a low price and a high return. Instead, both aspects should be considered simultaneously.
- Refinance
Take out the money from this house to continue investing in the next house. If it is not a cash transaction, loan is the most critical step. You can’t buy a house if you can’t borrow money. If you know which bank has a low interest rate, you can apply directly to the bank. Otherwise, you have to find a loan company because the loan company can find the bank with the lowest interest rate among many banks or find a loan that suits your situation.
- Repeat
Repeat the above process to obtain profits, which is the entire investment process.
The following is a real case shared by a senior investor to help you invest better:
The investor bought the house at a price of $545,500 and later spent $5,000 to renovate the house and then rented it out. If you immediately mortgage the money at the bank, the bank will make an assessment based on the purchase price. The investor rented the house to a worker at a rent of $3,150 per month. They lived in this house for two years and the lease expired at the end of March this year. In April, the investor began to renovate the house and it took a month. In May, the house was listed. One month later, the investor found a buyer for the house and the buyer offered a price of $739,000. Therefore, the investor’s final profit was $180,000.
This strategy is applicable to all local buyers. But if you are still living in China, the biggest drawback is the choice of banks. Currently, Cathay and East West Bank are the main banks that offer loans to foreigners. On the one hand, their interest rates are lower than those of locals. On the other hand, their interest rates cannot be locked for 30 years. This is the biggest problem in investing in real estate.