Regardless of what some late-night infomercial may lead you to believe, there is no such thing as free real estate. Real estate is a commodity, and it must be paid for. As a real estate investor, one of the most important roles you will play will be putting together your deals using a variety of different financing tools. Understanding these tools is one of the most important keys to real estate investment lending.
There are numerous strategies that investors use to invest in real estate without having a lot of cash. Some deals can be done without using any money—period!
Below you’ll find several strategies for financing your real estate deals, but if you want more in-depth information, we invite you to contact us a info@realestatelendingsolutions.com. Here are just a few of the strategies when it comes to real estate investment lending.
Conventional Mortgage
Financing your investment property via real estate investment lending may produce significantly better returns than paying in cash. Most investors choose to finance their investments with a cash down payment and a traditional conventional mortgage. Most conventional mortgages require a minimum of 20 percent down but may extend as high as 30 percent for investment properties, depending on the lender. Conventional mortgages are the most common type of mortgage used by home buyers and generally provide the lowest interest rates.
Portfolio Lenders
Some banks and credit unions have the ability to lend entirely from their own funds, making them a portfolio lender. Because they lend their own money, they can provide more flexible loan terms and qualifying standards. This means that they are able to make loans available at whatever terms they deem acceptable. Oftentimes, a portfolio lender will offer available funds with less restrictive qualifications than a conventional lender.
Hard Money
Hard money is financing that is obtained from a private business or individual for the purpose of investing in real estate. Hard money can be beneficial for short-term loans in certain situations, but many investors who have used hard money lenders have found themselves in tough situations when the short-term loan ran out. Use hard money with caution, making sure you have multiple exit strategies in place before taking the loan.There are many more strategies to explore in regards to real estate investment lending than listed above.
Visit us online at www.realestatefundingsolutions.com or give us a call at 1-855-913-8637 to talk about all your options and get started on your real estate investment journey.