Buying a home requires a lot of planning and knowledge. It is important to find the right fit and stay within your means as well. My name is Jacques Poujade, managing partner at LendPlus, and I work with people of different financial situations, including many small business owners. No matter how much money a person has, small business owners can get themselves in trouble if they aren’t careful when buying a personal home. Here are four tips to keep in mind to have a positive experience.
- Get Pre-Approved
This seems like a no-brainer, but a lot of people don’t know where to start with a loan for buying a home. What causes a lot of trouble for small business owners is that, sometimes it can be more difficult for them to be approved for a loan.
With money already being borrowed for the small business, it might be tough to get a home loan that fits your needs. At LendPlus, we actually see this issue quite a bit. That is why we work with each individual to help them secure flexible loans. Having the ability to pay everything off on a personalized repayment plan can really be beneficial.
- Look for Houses Within the Community You Serve
It is not a requirement for any business owner to live in the same area their business is in. With that being said, it sometimes is a good situation to be in if you can serve the same community. By being part of a community, people are more likely to shop and use your business.
Another advantage to living in the same area is that it just saves time and money. Most small business owners are going to be putting long hours into their business to get things rolling. With all that time being used to work, there is no need for another hour or so of commute to be tacked on. That not only wastes time, but it can cost a lot in money to travel that much as well.
- Pay it Forward by Working with a Client’s Real Estate Agent
In a community, business owners can benefit by looking out for each other. One way to do that is to seek a client’s real estate agent or even work with a client who is a real estate agent. By working with someone you know, it can be very beneficial for the bottom line and for trustworthiness. It is far less likely for a friend to provide poor advice when shopping for real estate.
Remember, every single homeowner at one point was in the same situation as you. There is no shame in asking for advice and getting help from people in the community. It might end up being one of the smartest decisions made.
- Don’t Use Business Money to Buy a House
Finally, this is a big one for any small business owner out there who might have some money left over from another loan. It might be enticing to use that money for personal assistance, but it is not a good idea at all. There should always be separation between business and personal money in order to run a successful business.
If something was to go terribly wrong with the business, having everything tied up together can do a lot of damage. The last thing a person wants is to dig themselves in a pretty big hole that they are unable to get out of individually or in the business.
When looking at the numbers, remember that only personal money counts. People can get themselves in trouble if they try to go after a bigger house that they simply can’t afford with just their personal money.
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