Hull & Company

Hull & Company
111 N 2nd
Rogers, AR 72756
479.273.5454 - phone
479.273.5400 - fax

Advice for Speculators

Debt can be your friend or your enemy, depending upon who pays the mortgage. Income property with solid leases is the most highly sought after real estate asset. How the tenant quality measures up can determine whether vacancy rates go up after a purchase, creating a negative cash flow for the investor. Talk to the tenants before you close. Get an estoplle agreement in writing that requires the tenant's signature and acknowledgement that they will pay the rent, and try to get an extension to the lease as part of the negotiations.

Buy a property in a great school district. Many studies have shown that property located in excellent school districts tend to appreciate faster than property located in mediocre school districts.

Look for a good neighborhood with good housing stock, shopping, transportation options and a variety of recreational activities. Fortunately, good school districts tend to incorporate good neighborhoods. Healthy businesses seek these customers.

If buying housing, buy the smallest home on the block. If you can't afford the home of your dreams in the neighborhood of your dreams, it's often better to buy a smaller home that you can fix up in a solid neighborhood. If you find a small home on a block with bigger homes, and the small house has the same size lot, you'll probably be able to expand the house.(Before you buy, check to make sure you don't run into future zoning problems with your local planning department.)

Buy a fixer-upper. The best way to build in value is to fix up a property in a neighborhood where most of the other properties are already fixed up and selling at a premium.

Buy a multi-unit property. If housing is scarce, it's a good bet that there's high demand in the rental market as well. If you find a property that has 2 to 4 units in it, you may be able to live in one of the units and use the income from the other unit to help pay the mortgage on the property. By leveraging your down payment dollars with rental income, you should be able to purchase a larger, more expensive property.