Loan Options For Real Estate Investing

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Loan Options for Real Estate Investing While investing in things like securities can cost as little as $20.00, investing in real estate involves far more significant amounts of money. Most real estate investors don’t have enough cash on hand to cover the full cost of the property they are investing in. Instead, most are purchased using some form of leverage. There are a number of loan options available to those who intend to purchase real estate as an investment. Residential Real Estate Financing While there are many options when it comes to financing residential real estate investments. The most popular of these are banks, private lenders, and a number of different government grants. Traditional Bank Financing This form of financing is…show more content…
Government Grants The Federal Government offers a number of grants aimed at helping real estate investors to fund distressed property investments. Of course, these grants do come with a set of rules in place. The investor must not only meet specific financial criteria but must also agree to improve the property before he attempts to sell it. If you don 't have enough cash reserves in place to meet this requirement, this might not be the best option. Non-traditional Private Lender Financing Just because your credit score and lack of assets stops you from securing favorable terms with a traditional lender, doesn 't mean you should give up on your investment. There are a number of non-traditional loan sources worth considering, including seller financing, peer-to-peer lending networks, loan assumption, interest only loans, self-directed IRA purchases, even friends, and family. Interests rates for many of these forms of financing may be higher due to the appearance of you being a higher risk borrower. Commercial Real Estate Financing Options Unlike residential real estate financing with its various government grants, commercial real estate investors have only two financing options. The choices they have are through a bank or private lenders. Financing Through the Bank The bank is likely to look at the investor 's current income statements along with recent tax returns, along with other information such as professional and personal balance sheets for the past three to
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