Thinking of investing in real estate? If you have goals of investing, but lack financial security, you may have to come up with some clever and creative financing solutions.
Consider these 6 Creative Real Estate Financing Hacks:
- Personal Loan
It may not seem like a personal loan is the most effective approach to financing a real estate investment, but it can be done. While the tax benefits are not as good as more traditional lending options, you likely won’t need collateral for a personal loan. The repayment terms are typically shorter than a mortgage, which equates to less interest paid overall.
- Owner Financing
What about owner financing for your investment? Since you are trying to use as little of your own liquid assets as possible, owner financing makes good sense. This usually relates to agreements that are between the buyer and seller, with the buyer making monthly payments for the duration of the note’s terms.
- Lease Option
Lease options, or ‘rent-to-own’ options are creative ways to use as little of your own cash as possible- while still investing in a real estate property. This may be set up to allow for a sale at the end of the rental term with the rent paid going toward the cost of the property.
- Hard Money
You might consider hard money for your investment. This usually comes from an investor or business that requires less documentation and verification than a conventional bank or lender. This may be ideal for an investor who has a less than stellar credit score.
- Private Money
You may also have the option of using private money from a personal friend, relative, or colleague. This can mean more flexible terms and less rigidity in terms of documentation.
Today’s technology allows for crowdfunding sites and platforms to help individuals raise money fast. There are even specific sites dedicated to real estate investment opportunities for would-be investors that need help with financing their acquisition.
Got questions about financing for your real estate investment? Talk to the professionals at Capital Crown Investments today.