Have a Business Plan!
In my business, it is a pleasure to come to work and see very creative real estate transactions and hear the sponsor's or developer's vision. I can tell in the first fifteen minutes of our discussions if this person is really someone we can finance and is truly a real estate investor. I have a policy that we promote internally in my office that if we (being the mortgage broker) are steering or making too many of the decisions for the borrowers, it is time to rethink their abilities.
Business plans can be very simple or complex based on the amount of moving parts, issues, or challenges your particular real estate transaction might have. All of this has significant impact on the type of financing that you should pursue.
I would encourage you to ask yourself the following questions: Why am I buying this real estate?
Shelter. You need a place to live? If that is your motivation, then how much can you afford on your own, or should you bring in someone to help you with the down payment, or be a tenant?
Investment. What kind of investment? Short-term trade? Long-term hold? Buying for income? This can be very complex because everyone has different reasons for investing. The reason this is so important is that you need to match the appropriate financing with your correct business plan.
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