Whether you’re a real estate flipper looking for ways to fund your next investment property or a prospective homebuyer looking to purchase your dream home, having a few creative real estate financing solutions in your pocket can be a huge help. If achieving financial freedom is your priority, real estate is your solution. Don’t let a lack of capital prevent you from conquering your investing goals by employing some of these creative real estate financing solutions.
Seller Financing
The biggest benefit of using seller financing to fund a real estate deal is that you never have to work with a lender. Choosing this financing route will result in you and the homeowner establishing your own set of payback and interest rate terms, as well as you paying your mortgage payment directly to the seller. This scenario almost always occurs when the seller owns his or her home free and clear. If in the rare chance the homeowner has an existing loan when he or she sells, he or she must pay back the loan immediately or possibly face foreclosure. Seller financing most often becomes an option when the homeowner is desperate to sell. Perhaps the seller is older and can no longer make the necessary repairs to the home. He or she may offer seller financing for the home “as-is”, which makes the sale available to a larger audience. The ideal outcome for an investor or homebuyer who utilizes seller financing would be that that investor or homebuyer would qualify for a conventional loan in five years, refinance the property, pay off the seller, and have a mortgage with a bank or mortgage company.
Hard Money
An investor can obtain hard money from a private business or individual for the purpose of investing in real estate. While the terms of hard money will vary from loan to loan, there are several traits that almost all hard money loans possess. Firstly, the approval requirements for a hard money loan are much less stringent than that of a traditional lender. The lendee’s income does not have to be verified nor does their credit score. Secondly, hard money loan stipulations can vary. Term lengths are typically shorter, interest rates are typically higher, and hard money can often fund a deal in just a few days. Lastly, hard money lenders understand the process of investing in real estate better than traditional lenders.
Anyone can buy a home or invest in real estate if it’s a priority to them. Implement any (or a mix) of these creative real estate financing solutions and you’ll be well on your way to building wealth in real estate. Ready to start talking about real estate? Reach out to our experienced staff at info@realestatefundingsolutions.com to learn more about all the different creative real estate financing solutions available.