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Know Your Financial Readiness

  1. Define Your Investment Goals

  2. Identify Your Requirements

  3. Know Your Financial Readiness

  4. Work With an Investment Property Advisor

  5. Develop a Purchasing Strategy

  6. Contact us to begin the process

Before you begin your search for Southern California income property you will need to be clear about your financial readiness in order to understand where and what you will buy. Some key questions you will need to answer are:

  • How much money can you afford to put towards the offer (earnest money) on your income property?

  • How much of a debt obligation you are prepared to undertake? What is the maximum that you will be able to borrow? 

  • How is your credit rating?  If you don't know get a free one at: www.freecreditreport.com

  • What is your net monthly payment comfort level? Set a maximum dollar amount and do not exceed this threshold when searching for properties.

  • Are you cognizant of the current loan product available on the market today?

Three key areas to consider when evaluating your financial situation are cash flow, leverage and taxation.

Cash Flow

Create a balance sheet that captures all of your income and expenses to better understand your cash flow and how you will cover all monthly expenses related to owning a Southern California income property. This will also help you determine where and how much investment capital you can access. List all of your current investments - including your own home, stocks, insurance, etc. - and determine if you should be moving money from areas that are not performing well into your real estate investment. Determine an amortization and mortgage term that you are comfortable with and realize the duration of your obligation to a lender.


Southern California Real estate transactions usually involve the borrowing of funds. How much of your own funds you should contribute and how much you should borrow varies in every situation. Leverage rises as the ratio of debt to equity increases. Educate yourself on the basics of leveraging and seek professional advice to ensure you understand the implications of borrowing, interest rates and both positive and negative leverage.


Tax liability applies to income properties in two areas: taxation on operations (the rental revenue) and taxation on profits from sale. However, real estate can have many tax sheltering opportunities. A chartered accountant or taxation lawyer will be able to advise you on the tax liabilities and tax shelters that apply to owning an income property.

Consult with your accountant or financial planner to adequately understand all the implications of owning an income property before you begin your search.

next:  Work With an Investment Property Advisor


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Information throughout this site is deemed reliable but not guaranteed for Aliso Viejo, Capistrano Beach, Corona Del Mar, Dana Point, Laguna Beach, Laguna Niguel, Monarch Beach, San Juan Capistrano and Newport Coast properties.  By submitting your contact information on any form on this site,  you are consenting for The OC Coastal Group  to contact you even if your name is on the Federal "Do Not Call List".

The information throughout this site is deemed reliable but not guaranteed and is for the consumer’s personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumer may be interested in purchasing. Any information relating to real estate for sale referenced on this web site comes from the Internet Data Exchange (IDX) program of the SoCalMLS®. This web site may reference real estate listing(s) and / or closed sales held by a brokerage firm other than the broker and/or agent who owns this web site. This site and it's contents are copyrighted and may not be copied, reproduced or distributed without the express written consent of The OC Coastal Group.

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The OC Coastal Group are realtor specialists in Dana Point real estate, Monarch Beach real estate, Laguna Beach real estate, Laguna Niguel real estate, San Juan Capistrano real estate, San Clemente real estate and Aliso Viejo real estate in Coastal Orange County, California & surrounding South Orange County, CA realty including coastal golf course homes, beach properties, gated communities, 1031 exchanges, investment opportunities, income properties, ocean view estates, houses, condos & townhomes.

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