Let’s take a step back and look at the basic as I notice some of the articles in my blog might be overwhelming for some people. Who cares about no money down deal, wholesale, flipping, Airbnb, or oil investment, or life settlements investment when you don’t even know what is the first step to buy a house?
I will start writing a series of back to the basics to make sure that “No Investor is left behind” or “no buyer left behind”
So..What is the first step of buying a house?
Before you can answer this question, you need to answer another question. Why do you need to buy a house?
Most amateur real estate agent or so call professional out there will tell you that the house is an asset. That is just simply BS. Nothing could be further from the truth from that statement and it misleads a lot of people on this very fundamental thinking.
An Asset put money in your pocket
A Liability makes you put money out of your pocket to pay for it.
So unless you could Airbnb your property out, or rent a basement or a garage apartment out and generate positive income, A house you live in by definition is a liability.
And there is nothing wrong with that! A house is simply a great liability, a necessity of life that people crave. The American Dream they said!
Rather than an asset. I would recommend thinking of buying your homestead as a forced saving plan. because the money you put in goes toward the principle of the house and over time deleverage the debt. Even if it is a liability, I guarantee you will be sitting pretty on a big pile of equity after your house is paid off, and yes, there is a different way we can convert that equity into cash that we can discuss later.
Once, you get your head straight about why you need a house, then the first step would be to know how much you can afford and get a pre-approval from your bank or a mortgage officer!
This would be also a great time to take a look at your financial, clean up your debt, increase your credit score so that you could get a better financing deal.
If you plan to buy a house with cash, the 1st step would be to save up and get your cash ready! I don’t think anyone ever regrets buying a house with cash and owns it free and clear. It is the best feeling ever on earth.
Don’t mistake with the amount of pre-approval letter and the amount you could afford. I always recommend spending the least amount possible on your personal home so that you could have excess cash to invest and enjoy other stuff in life. Planet earth has a lot of other things for you to do, don’t buy a house and get grounded.
For Part 2 we will cover: How Long does it take to buy a house