Helpful Tips on How to Finance Your Investments
Whether you are looking to invest in rental real estate, buying properties or trusts, there are a few sure ways of obtaining the money you need, as long as you are eligible and your credit history checks out.
Even though it’s not always easy to get an advantageous offer on real estate investment funding, using proven strategies and managing your investments to obtain handsome profits can often be worth the small inconvenience of having to cover a mortgage payment, for instance.
Offering a Generous Down Payment
While there are many good opportunities for financing a real estate investment, the days of quick and easy financing are over. Today, lenders are more careful about whom they accept, and if you want to make sure you can obtain the amount you want, you’ll have to comply with two main requirements:
- A clean credit history to qualify as a strong borrower;
- A sizable down payment.
While your credit rating may be improved over time, if there are any issues with it, the amount you’ll have to provide as a down payment will usually have to be greater than 20% (25% would be even better) if you want to qualify for larger mortgages and lower interest rates.
Finding the right lender may also be crucial to your success, and aside from asking friends or combing the local market, you can also compare offers from multiple lenders, depending on exactly what you are searching for.
Large Banks vs. Small Lenders
Large banks are usually the preferred option when you actually have the opportunity to present a greater down payment. The lower interest or smaller down payments will often prove to be a great asset in the long run when you’re facing additional monthly expenses to manage and renovate your real estate properties.
If you can’t provide the necessary amount for a good down payment, however, it could be best to turn to local, neighborhood banks. These are often more interested in local buyers and investors, and they can also offer more flexible terms and options than larger banks.
Other Options to Consider
When banks or other conventional means of obtaining money to buy properties or build up funds for future real estate investments are not an option, you can also try to think out of the box and find other ways of securing a loan:
- Due to the higher number of motivated sellers, owner financing has become a more attractive funding options for investors with better success rate than in past years.
- Renovation money or down payments from home equity lines of credit may be a good idea when you find a property that could bring in a lot of profit.
- Private loans obtained from peer-to-peer lending sites which connect you to individual lenders may also be considered, however, great care must be taken in evaluating the long term risks associated with these offers.
Regardless of what route you take, of course, borrowed money always has to be given back and, without a good credit rating, it can be difficult to land a good enough deal.
The Realty45 Inc team is committed to helping prospective investors obtain their funding through trusted means and ensuring that they can gain access to the best possible offers available on the market today.
