4. Finance - Know what you are able to spend

For some, this could be your absolute first step. If you make this your first step, this helps to narrow the scope of your search for properties. Furthermore, once you find a property, you will know for sure that you can quickly move to close the purchase.
Part of financing is structure. How will you structure this purchase? Let us assume you are working to gain an interest in real property. What type of interest are you looking to gain? Cash, vested financial interest, or ownership? What is your role in this purchase?

Once you have identified your role, consider what part of financing comes from you, and what part is to be leveraged. Will you bring a partner into the purchase? Will you take out a mortgage loan? Are you depending on seller financing? Are you looking to negotiate creative financing? No matter what, you absolutely must know that you have the proper finances to close on the sale.

For detailed transaction expenses, contact your local title & escrow company. If you do not have one, we might be able to make recommendations to you. To estimate your monthly payments, please use our mortgage calculator.

5. Negotiate - The terms of your purchase

Ultimately your research, analysis, and finances will dictate the terms under which you are willing and able to purchase.

As a rule purchase negotiations may be opened by putting an offer in writing setting forth the terms of your purchase, or you may decide to verbally open up negotiations prior to putting anything in writing. The approach is your choice. This may be influenced by the seller's sentiment towards opening negotiations upon receipt of a written offer or upon verbal contact. Keep in mind; contact with the seller is oftentimes not even an option as it is here in this setting of online bidding. In this case, you decide, and then offer.

6. Offer - Bid for property

Once you have successfully negotiated mutually agreeable terms or simply decided on terms agreeable to you, you must have all terms of your agreement in writing. The purchase and sale of a property is 100% weighted on this written agreement. It is advisable to seek professional review of this agreement, or to have a professional prepare the agreement on your behalf in order to ensure that it accurately reflects your interests

7. Contract - Firm up the agreement

Agreements in real estate must be in writing. Once negotiations are complete, reflecting mutually agreeable terms, all parties to the agreement must sign the agreement.

The terms set forth will dictate the execution of the contract from the date of the last acceptance signature out through the close of the sale.

Be sure that all agreements are in writing!

1. Locate - Find what you are looking for

Your first logical step into buying real estate is to identify the real property you want to invest in. There are many different types, but most will fall under the two categories of residential or commercial real estate. You may choose single family residences, multi-family units, condominiums, town homes, trailer homes, or vacant land. You may also consider apartment buildings, office buildings, shopping malls, or a multitude of other options.

Knowing what type of real property you want is one thing. Next you must consider the circumstances under which you wish to purchase. Are you looking for something at fair market value, in foreclosure, subject to short sale, bank sale, high equity, low equity, or no equity? In what market? Up, down, sideways? You get to decide based off of your prognosis of these factors.

We, at PEMCO, Ltd., endeavor to bring these opportunities to you. Begin your search here.

2. Research - Perform due diligence

You have found your property of choice. Now the work of verification begins. In this phase you may want to start broad and then narrow in. Take a look at the market that you are entering. Is it appreciating or depreciating? Fast or slow? What are the current trends? Buyer's market or Seller's market? How is your particular property class responding to the market? Is the value consistent with your research? Does the market and trends support your prognosis for the property you have selected?

Please Note: The properties on our site have all gone through this initial due diligence process. This cannot be said of other so-called online investment sites. Some websites list properties for a membership fee with a goal of making money on the web as their business, not a true real estate company like ours. On PEMCORealty.com properties searches are free. Also, as a service to you, PEMCO provides the appropriate documents for your review prior to submitting a bid.

In addition, if you have another property in mind that is not listed on our pemcorealty.com site, we still can be of assistance in providing due diligence services for you. Learn more about our due diligence services.

3. Analyze - Manage your risk

Now is the time to curb your excitement, take a step back, breath, and create a plan for your selected property. If you have not already done so, at this point you really must be clear on why you are considering the purchase. Is it to have a property to live in? For how long? Is it to rent out? Long term or short term? Is it to resell at a profit? By when?

Knowing the answers to these questions will have a trickle effect on how you proceed to the next step of financing. More importantly, this analysis also makes you consider the possible scenarios of what would happen if the market changes for the worse, or if your finances change for the worse. This exercise simply serves the vital purpose of deciding in advance what you will do if events unfold contrary to your plan. Take the time now to minimize emotion by putting your investment plan in writing. PEMCO will be glad to review it once you are done.