You’ve set your sights on an amazing journey in real estate investing! You find the house that best fits what you are looking for, your offer gets accepted, and the big question pops up; Where is the money coming from? You have options!!!!
When it comes to investing in real estate there are multiple options to fund your deal. Securing them before getting that offer accepted is good practice. But not having anything secured shouldn’t instill fear when it comes to pursuing a good deal. Here is three easy options to fund your next investment.
Private Money, this source can be one of the simplest ones as long as you have good communication with your lender. It would be of shock to you to find how many people you may know that are willing to invest in real estate. It could be a family member, friend, coworker or even your neighbor. You find the deals they fund the money, it can be a one time investment or a continuous relationship. The process is simple you both decide the terms of the loan and allocate the right return for your lender. So as long as you communicate with each other the better the outcome and the longer of a relationship benefiting both parties it will be.
Hard Money, this type of lending has grown within the past years. Unlike your normal banks they tend to lend based on the profits of the deal instead of your credit score. They have their own terms and fees you have to abide by before any funds are released to you. The benefits of working with hard money is that they help with cash transactions, quick closings and multiple deals. They are not your typical bank so using them would be more for rehabs and flips to benefit from the quick closings. You can find them on the web or even at real estate meet ups looking to fund your next deal.
Bank Money, this type of loans are funded based on your credit score. You can initially start with banks depending on how fast you plan to grow your business or rehab the property. The good side of using banks is that they may offer lower rates and down payment plans. This would be a good option for buy and hold properties like multifamily homes where you can rent one side out and live on the other. This would give you great experience in the passive income side of investing.
As stated before you have many options to find capitol for your next investment. You just have to do the right research and present a profitable deal.