How to Finance a Real Estate Investment Property
Need financing for your Real estate investment property? You have choices, depending on your credit history, current debt load, and amount you are requesting.
Consider the following ways to finance your real estate investment:
Conventional Mortgage Loans
If you have decent credit and a down payment, you may choose to take out a conventional mortgage loan for your real estate investment property. This involves a typical lending situation, and it may behoove you to approach the holder of your home loan, if applicable, first for the best terms and interest rates.
Hard Money Loans
If you are in a rush for financing, you may choose a hard money loan from companies that are specifically dedicated to lending for this purpose. Generally, the lender looks at the value of the property that you are buying more than your own credit score and history; these are suited to fix-and-flip situations, rather than longer-term rental income type investments.
If you know someone who may want to invest with you, consider private money lenders. If you have previous real estate investing experience, you may know someone that would be interested in the opportunity. If not, you may want to hit-up your own social network of family, friends, and colleagues to find an investor. This is a viable option for those that have been turned away by traditional lenders or banking institutions for funding.
Not sure about being a landlord? A fix-and-flip loan is a good solution for those investors that don’t want to rent out their building, but rather want to renovate the property and sell at a profit, hopefully.
Home Equity Loans
Can you use the equity in your home to secure a loan for your investment property? This is a great idea for both long-term rental investments as well as those that you plan to fix up and flip. Depending on how long you have owned and how much you have paid on your home will dictate the amount of financing available to you. Talk to the lender for the specific terms of these loans.
Commercial Investment Property Loans
If you have a solid business plan, you could be a good candidate for a commercial investment property loan. How is your credit score? Lenders will look at that, too.
Thinking of investing in real estate? Talk to the money experts at Advanced Commercial Capital to learn more about your finance options.