Condominiums - A Great Place to Make Your First Real Estate Investment

First time investors struggle making their first acquisition. Overcoming the road blocks and achieving the first investment hinges on identifying a path to make the first purchase. Condominiums offer one of the best paths for beginning real estate investments. Most would be investors resources support closing a successful cash flow producing condominium investment. As consumers, guaranteed federal housing loan programs support this acquisition with as little as 5% cash down.

Additionally, because the crisis crushed values in the condominium market prices in this area remain depressed. On the other side, rents pressured by effects of the crisis support the cash flow value proposition of condominiums. Further simplifying this investment, condominiums limit the owners responsibility to maintaining the interior of the unit; an important factor for a first investment property where management simplicity is important.

Analyzing a condominium purchase is very simple:

• Identify comparable rents in the target market area checking for similar square footage, amenities, access to employment, access to public transportation and the usual market analysis considerations.
• Ensure you understand the value proposition based on the anticipated closing price. Remember price is and should be negotiated. The odds are narrow that you would pay asking price. Complete a thorough analysis of recent sales prices. This is your best indicator of the price you will pay.
• Complete a detailed analysis of the income and costs you will experience and assure with a very high confidence that you can make the desired cash flow.
• Analyze how you can and will manage any cash flow shortfall and the types of reserve you need to maintain.
• Determine the exact costs to close. Ensure this capital is in hand and prepared for closing.
• Identify your management company or work out the details if you will manage the property. If you are going to manage the company develop a complete range of contractors and service providers you will need to assure smooth services for your prospective tenants.
• Bounce this information off of experienced investors who can verify that you have completed a thorough plan and are fully prepared to move ahead.
• Identify how you will identify and close your first tenants.

Sit down with a bank and closing attorney to complete your closing check list. With this completed begin the process of closing your acquisition and operating your investment.

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