Cash Flow
Distressed Properties including Bank Owned (REO), Short Sales and Auctions might represent a good opportunity to create long-term passive income.
For the first time in years Single Family Homes and Condo are priced so low that in some California markets that you can generate positive Cash Flow from these rentals. But before you jump into the rental home ownership you need consider a few items:
1) Financing: Unless you are purchasing these properties with Cash, you will need to have 30-40% down payment for investment property financing.
2) Pre-Approval: If you are financing these properties it’s imperative that you get pre-approved with a Direct Lender such as Wells Fargo and Bank of America. These banks will complete underwriting your purchase loan and it will only conditioned on an appraisal once you find the property.
3) Where to Buy: Market selection for your investment property is extremely critical. Most investors believe that the best investment opportunities are within 2 mile radius of their own home, which is not necessarily true. Your guide in selection of the location of your investment property purchase is where you will get the Highest Return on your Investment (ROI). MSN Money report identifies Top 10 cities for Rental properties which includes Orlando and Colorado Springs.
4) Property Management : Now that you have smartly decided to buy your rental property where you can get highest ROI, then you will have to concern yourself with property management. You then will need to select a Property Management company based on the services that they are offering you.
We have writing blogs on Tenant Screening which could be helpful to you.