Ultimate Guymon Real Estate Investing Guide for 2024

The acronym BRRRR is an illustration of a long-term investment plan — Buy, Rehab, Rent, Refinance, Repeat. When you plan to expand your investments, the BRRRR is a good plan to utilize. This plan rests on your ability to take cash out when you refinance.

When you are done with improving the home, its market value must be more than your complete purchase and fix-up spendings. Then you receive a cash-out mortgage refinance loan that is computed on the higher property worth, and you pocket the balance. You buy your next rental with the cash-out sum and begin all over again. You add improving investment assets to the balance sheet and lease revenue to your cash flow.

If an investor owns a substantial collection of real properties, it is wise to hire a property manager and designate a passive income stream. Find one of the best investment property management companies in Guymon OK with the help of our complete list.

Factors to Consider

Population Growth

The expansion or decrease of the population can indicate whether that area is desirable to rental investors. If the population increase in an area is robust, then new renters are assuredly coming into the region. Employers consider this as an appealing community to situate their enterprise, and for workers to move their families. An increasing population constructs a stable foundation of tenants who can keep up with rent bumps, and a robust property seller’s market if you decide to liquidate any assets.

Property Taxes

Real estate taxes, upkeep, and insurance expenses are considered by long-term rental investors for computing costs to assess if and how the efforts will work out. Excessive spendings in these categories jeopardize your investment’s returns. Unreasonable property tax rates may indicate an unstable community where costs can continue to increase and must be considered a red flag.

Price to Rent Ratio

The price to rent ratio (p/r) is a signal of how high of a rent can be charged compared to the acquisition price of the investment property. An investor will not pay a steep sum for a house if they can only charge a low rent not letting them to repay the investment within a appropriate timeframe. A large price-to-rent ratio tells you that you can collect lower rent in that community, a small p/r tells you that you can charge more.

Median Gross Rents

Median gross rents are an accurate benchmark of the desirability of a rental market under examination. Median rents must be growing to warrant your investment. Declining rents are a warning to long-term investor landlords.

Median Population Age

The median population age that you are looking for in a dynamic investment market will be close to the age of employed adults. This can also signal that people are moving into the community. If you find a high median age, your stream of renters is going down. A dynamic real estate market cannot be maintained by retirees.

Employment Base Diversity

A varied amount of companies in the region will increase your chances of strong profits. When the citizens are concentrated in only several dominant employers, even a small problem in their operations might cost you a lot of renters and expand your liability immensely.

Unemployment Rate

It is not possible to have a reliable rental market when there is high unemployment. Normally profitable businesses lose clients when other employers lay off workers. People who still have workplaces can discover their hours and wages cut. Even renters who are employed will find it tough to stay current with their rent.

Income Rates

Median household and per capita income levels let you know if enough qualified tenants live in that region. Your investment calculations will consider rent and investment real estate appreciation, which will depend on wage raise in the region.

Number of New Jobs Created

The reliable economy that you are looking for will be creating plenty of jobs on a constant basis. A higher number of jobs equal a higher number of renters. This allows you to acquire additional rental assets and fill current unoccupied units.

School Ratings

Community schools can cause a major influence on the property market in their locality. Business owners that are interested in moving prefer high quality schools for their employees. Business relocation creates more renters. Homebuyers who move to the city have a beneficial effect on real estate market worth. You can’t run into a dynamically soaring housing market without good schools.

Property Appreciation Rates

Property appreciation rates are an indispensable ingredient of your long-term investment approach. You need to be certain that your real estate assets will grow in value until you need to liquidate them. Low or decreasing property value in a community under consideration is inadmissible.

Residential units where renters stay in furnished accommodations for less than thirty days are referred to as short-term rentals. Long-term rental units, like apartments, require lower rental rates a night than short-term ones. With tenants moving from one place to the next, short-term rentals need to be maintained and sanitized on a regular basis.

Typical short-term tenants are excursionists, home sellers who are buying another house, and people traveling for business who want more than hotel accommodation. Any homeowner can convert their home into a short-term rental with the tools made available by virtual home-sharing websites like VRBO and AirBnB. Short-term rentals are deemed as a smart approach to embark upon investing in real estate.

Short-term rental properties require interacting with renters more often than long-term ones. Because of this, landlords deal with difficulties regularly. You may need to protect your legal bases by working with one of the best Guymon investor friendly real estate attorneys.

Factors to Consider

Short-Term Rental Income

First, figure out the amount of rental income you must earn to achieve your projected return. A location’s short-term rental income levels will quickly show you when you can predict to accomplish your projected income figures.

Median Property Prices

When purchasing property for short-term rentals, you should determine how much you can pay. Search for locations where the budget you need corresponds with the existing median property worth. You can also utilize median market worth in localized areas within the market to pick communities for investment.

Price Per Square Foot

Price per sq ft can be influenced even by the style and floor plan of residential properties. A house with open entrances and high ceilings cannot be compared with a traditional-style property with greater floor space. You can use this metric to get a good general idea of home values.

Short-Term Rental Occupancy Rate

The number of short-term rental properties that are currently rented in a community is vital information for a landlord. A high occupancy rate signifies that an extra source of short-term rental space is wanted. Low occupancy rates signify that there are already enough short-term rental properties in that city.

Short-Term Rental Cash-on-Cash Return

A short-term rental’s cash-on-cash return will show you if the property is a smart use of your money. You can calculate the cash-on-cash return by determining your Net Operating Income (NOI) and dividing it by the cash you are putting in. The percentage you get is your cash-on-cash return. High cash-on-cash return means that you will get back your money more quickly and the purchase will have a higher return. Lender-funded investments will reach stronger cash-on-cash returns because you’re spending less of your own capital.

Average Short-Term Rental Capitalization (Cap) Rates

One measurement illustrates the market value of an investment property as a revenue-producing asset — average short-term rental capitalization (cap) rate. As a general rule, the less money a unit costs (or is worth), the higher the cap rate will be. If cap rates are low, you can assume to spend a higher amount for rental units in that region. Divide your estimated Net Operating Income (NOI) by the property’s market value or purchase price. This shows you a percentage that is the annual return, or cap rate.

Local Attractions

Short-term rental apartments are desirable in communities where sightseers are drawn by events and entertainment venues. This includes collegiate sporting events, kiddie sports contests, colleges and universities, huge concert halls and arenas, festivals, and theme parks. Notable vacation sites are located in mountainous and coastal points, along rivers, and national or state parks.

To fix and flip a residential property, you should get it for below market price, conduct any needed repairs and upgrades, then dispose of the asset for higher market price. Your assessment of rehab expenses must be correct, and you have to be able to buy the home below market worth.

Analyze the prices so that you know the exact After Repair Value (ARV). Select a city with a low average Days On Market (DOM) indicator. Selling the home fast will help keep your expenses low and guarantee your profitability.

To help motivated residence sellers discover you, place your business in our catalogues of cash property buyers in Guymon OK and property investment companies in Guymon OK.

Additionally, team up with Guymon property bird dogs. These specialists concentrate on rapidly finding lucrative investment prospects before they come on the market.

Factors to Consider

Median Home Price

The location’s median housing price could help you locate a suitable city for flipping houses. If prices are high, there may not be a stable source of run down properties available. This is an important element of a profitable fix and flip.

If you detect a sudden drop in home market values, this might indicate that there are potentially houses in the market that qualify for a short sale. You will find out about potential opportunities when you team up with Guymon short sale processors. Learn how this happens by studying our article ⁠— What Are the Steps to Buying a Short Sale Home?.

Property Appreciation Rate

The shifts in real property prices in a region are crucial. You need an environment where real estate values are constantly and consistently on an upward trend. Home prices in the city need to be increasing constantly, not suddenly. You could wind up buying high and selling low in an unreliable market.

Average Renovation Costs

A thorough review of the region’s building expenses will make a huge difference in your location selection. Other spendings, like permits, can increase expenditure, and time which may also develop into an added overhead. If you are required to present a stamped suite of plans, you’ll need to include architect’s charges in your budget.

Population Growth

Population growth figures allow you to take a look at housing need in the community. If the population isn’t increasing, there is not going to be a sufficient source of homebuyers for your real estate.

Median Population Age

The median citizens’ age is a straightforward sign of the availability of potential home purchasers. The median age in the area needs to equal the age of the regular worker. A high number of such residents demonstrates a stable supply of homebuyers. The demands of retired people will most likely not fit into your investment venture strategy.

Unemployment Rate

You want to see a low unemployment level in your potential market. An unemployment rate that is less than the national average is a good sign. A very reliable investment community will have an unemployment rate less than the state’s average. If you don’t have a vibrant employment base, a location cannot provide you with enough homebuyers.

Income Rates

Median household and per capita income amounts show you whether you will see adequate buyers in that city for your houses. Most buyers have to take a mortgage to purchase a house. To have a bank approve them for a home loan, a person should not be spending for a house payment more than a certain percentage of their salary. You can determine from the community’s median income whether a good supply of individuals in the community can afford to purchase your houses. You also prefer to have wages that are improving consistently. Construction expenses and housing prices rise periodically, and you want to be sure that your prospective homebuyers’ wages will also climb up.

Number of New Jobs Created

Finding out how many jobs appear each year in the area adds to your assurance in an area’s economy. A growing job market indicates that more people are receptive to purchasing a home there. With additional jobs appearing, more potential buyers also relocate to the city from other cities.

Hard Money Loan Rates

Fix-and-flip investors regularly utilize hard money loans rather than traditional financing. This enables investors to quickly purchase distressed real estate. Review Guymon private money lenders for real estate investors and analyze lenders’ charges.

Investors who are not knowledgeable in regard to hard money loans can find out what they need to understand with our guide for newbies — What Is Hard Money Lending?.

In real estate wholesaling, you search for a house that investors may count as a lucrative deal and sign a purchase contract to purchase it. An investor then “buys” the sale and purchase agreement from you. The seller sells the house to the investor not the real estate wholesaler. The real estate wholesaler does not sell the residential property — they sell the rights to buy it.

The wholesaling form of investing involves the use of a title insurance firm that understands wholesale deals and is savvy about and involved in double close transactions. Find Guymon wholesale friendly title companies by using our directory.

To learn how wholesaling works, read our insightful article Complete Guide to Real Estate Wholesaling as an Investment Strategy. When pursuing this investment method, place your firm in our list of the best real estate wholesalers in Guymon OK. This will help your future investor purchasers discover and contact you.

Factors to Consider

Median Home Prices

Median home values are essential to locating markets where homes are being sold in your real estate investors’ price range. As investors need investment properties that are on sale below market value, you will need to find reduced median purchase prices as an indirect hint on the possible supply of residential real estate that you could acquire for below market value.

A fast drop in the price of real estate may generate the swift appearance of houses with more debt than value that are wanted by wholesalers. Wholesaling short sale properties repeatedly carries a number of uncommon advantages. Nevertheless, it also creates a legal liability. Find out about this from our in-depth blog post How Can You Wholesale a Short Sale Property?. When you are keen to start wholesaling, hunt through Guymon top short sale attorneys as well as Guymon top-rated mortgage foreclosure attorneys directories to locate the right advisor.

Property Appreciation Rate

Median home price trends are also vital. Real estate investors who need to liquidate their properties anytime soon, such as long-term rental landlords, need a place where residential property prices are increasing. A dropping median home value will show a poor rental and housing market and will eliminate all kinds of real estate investors.

Population Growth

Population growth stats are a predictor that investors will consider thoroughly. An expanding population will require additional residential units. There are a lot of individuals who rent and additional customers who buy houses. If a region is shrinking in population, it doesn’t necessitate new residential units and real estate investors will not look there.

Median Population Age

Real estate investors want to see a dynamic real estate market where there is a considerable pool of renters, newbie homeowners, and upwardly mobile locals buying more expensive houses. A community with a large employment market has a strong supply of tenants and purchasers. A place with these characteristics will display a median population age that matches the working citizens’ age.

Income Rates

The median household and per capita income should be growing in a friendly housing market that investors want to participate in. If renters’ and homeowners’ wages are increasing, they can absorb rising rental rates and real estate purchase prices. Investors stay away from communities with poor population salary growth indicators.

Unemployment Rate

Real estate investors whom you reach out to to buy your contracts will consider unemployment data to be an important bit of insight. Tenants in high unemployment communities have a difficult time paying rent on schedule and many will stop making rent payments entirely. Long-term real estate investors will not acquire a home in a place like this. High unemployment causes uncertainty that will keep interested investors from purchasing a home. This is a challenge for short-term investors purchasing wholesalers’ agreements to fix and resell a house.

Number of New Jobs Created

Knowing how soon additional job openings appear in the community can help you see if the real estate is located in a strong housing market. More jobs produced result in an abundance of workers who look for places to rent and buy. Long-term real estate investors, like landlords, and short-term investors that include rehabbers, are gravitating to cities with strong job creation rates.

Average Renovation Costs

An indispensable consideration for your client investors, especially house flippers, are rehabilitation expenses in the market. When a short-term investor rehabs a home, they have to be prepared to dispose of it for a larger amount than the whole expense for the purchase and the repairs. Look for lower average renovation costs.

Investing in mortgage notes (loans) is successful when the mortgage note can be acquired for a lower amount than the remaining balance. This way, you become the mortgage lender to the initial lender’s client.

Loans that are being paid off on time are considered performing notes. These loans are a consistent generator of passive income. Note investors also buy non-performing mortgage notes that the investors either re-negotiate to assist the client or foreclose on to acquire the property below actual worth.

Ultimately, you could have many mortgage notes and necessitate additional time to service them on your own. When this occurs, you could pick from the best mortgage servicing companies in Guymon OK which will designate you as a passive investor.

If you choose to use this method, affix your venture to our list of real estate note buyers in Guymon OK. Showing up on our list sets you in front of lenders who make lucrative investment opportunities accessible to note investors such as yourself.

Factors to Consider

Foreclosure Rates

Low foreclosure rates are a sign that the region has investment possibilities for performing note purchasers. Non-performing note investors can cautiously make use of places with high foreclosure rates too. The neighborhood ought to be robust enough so that note investors can complete foreclosure and get rid of properties if needed.

Foreclosure Laws

Note investors should know their state’s regulations concerning foreclosure before buying notes. They’ll know if their state requires mortgages or Deeds of Trust. Lenders might need to obtain the court’s okay to foreclose on a property. A Deed of Trust permits you to file a notice and start foreclosure.

Mortgage Interest Rates

The mortgage interest rate is determined in the mortgage loan notes that are acquired by mortgage note investors. Your mortgage note investment profits will be impacted by the interest rate. Interest rates impact the strategy of both sorts of mortgage note investors.

Traditional interest rates may differ by up to a 0.25% throughout the US. The higher risk taken on by private lenders is accounted for in higher interest rates for their loans in comparison with traditional mortgage loans.

Successful note investors routinely search the mortgage interest rates in their market offered by private and traditional lenders.

Demographics

An efficient mortgage note investment strategy uses a study of the area by utilizing demographic information. The area’s population growth, unemployment rate, job market increase, wage levels, and even its median age hold pertinent facts for investors.
Investors who invest in performing mortgage notes search for regions where a high percentage of younger residents maintain higher-income jobs.

The same market could also be appropriate for non-performing mortgage note investors and their exit strategy. When foreclosure is required, the foreclosed home is more easily unloaded in a strong real estate market.

Property Values

Mortgage lenders need to see as much equity in the collateral as possible. When you have to foreclose on a mortgage loan without much equity, the foreclosure sale might not even cover the amount invested in the note. The combined effect of loan payments that lessen the loan balance and yearly property market worth growth raises home equity.

Property Taxes

Usually borrowers pay property taxes via lenders in monthly portions when they make their mortgage loan payments. When the taxes are due, there needs to be enough payments in escrow to take care of them. If mortgage loan payments are not current, the mortgage lender will have to either pay the property taxes themselves, or they become past due. If a tax lien is put in place, it takes a primary position over the mortgage lender’s loan.

If property taxes keep going up, the homebuyer’s loan payments also keep increasing. This makes it complicated for financially challenged homeowners to stay current, and the mortgage loan might become delinquent.

Real Estate Market Strength

A stable real estate market having consistent value appreciation is beneficial for all types of note buyers. Because foreclosure is an important element of mortgage note investment strategy, appreciating property values are important to finding a strong investment market.

Note investors also have a chance to make mortgage loans directly to borrowers in consistent real estate areas. It’s another phase of a mortgage note buyer’s career.

A REIT, or Real Estate Investment Trust, means a company that makes investments in income-producing assets. This was originally conceived as a method to permit the ordinary investor to invest in real estate. REIT shares are not too costly for the majority of investors.

Shareholders’ involvement in a REIT is considered passive investment. Investment risk is spread throughout a portfolio of investment properties. Investors can sell their REIT shares anytime they wish. One thing you can’t do with REIT shares is to choose the investment properties. The land and buildings that the REIT selects to acquire are the properties your funds are used to buy.

Real estate investment funds are basically mutual funds that specialize in real estate businesses, including REITs. The investment properties are not possessed by the fund — they’re possessed by the companies the fund invests in. These funds make it easier for a wider variety of people to invest in real estate properties. Funds aren’t required to pay dividends unlike a REIT. As with any stock, investment funds’ values rise and decrease with their share price.

You are able to choose a fund that concentrates on particular categories of the real estate business but not particular markets for each real estate investment. Your selection as an investor is to choose a fund that you believe in to supervise your real estate investments.