So everybody says that real estate is the way to financial freedom. Honestly I agree but no one tells you how to get the money to get started. Yeah there are different ways to get started In real estate.
You can buy land and hold it for the right investment. You can buy a property that’s already rental ready and create a passive income stream. You can purchase a house that needs to be gutted and remodeled. Then sell it for a big pay day. Either way you slice or dice it you can make a lot of money in real estate.
Unlike stocks you have to put in a lot of money to get started in real estate. Most folks don’t have it or know the different ways to get the money they need to build that real estate business they dream of.
Well I’m here to help you. Let’s go over the 5 ways to get funding for your real estate investment business.
Option 1 is a conventional loan.
These loans are backed by the bank but they are going to want you to have a decent credit score. Usually 600 credit score or better. Also they are going to want an additional 20% deposit. Be careful with this because most banks don’t provide loans to first time home flippers. They tend to see you as high risk.
Option 2 Hard Money Loans
These are loans that are used for flipping homes specifically. You want to really think hard before using this type of loan because the interest rates on these loans are really high. High as 18% depending on who you get the loan through.
Option Three Private Money Loans
This is another beast in itself. One thing to consider before taking these types of loans, is your relationship with the person that you’re getting the money from.
Most people get private money loans from friends and family. In business anything can happen and you don’t want to destroy your relationship over money. The best way to secure these loans are through some type of local real estate investment club because you can keep things business and business only. Just make sure that all paperwork is official and notarized. For your safety and theirs.
Option 4 Home Equity Loans
There are 3 types of loans Home Equity loan, Home Equity line of credit (HELOC) and Cash out refinance. Home equity loan is a consumer debt that usually has a set interest rate on the loan and you can usually only borrow against 80% of your homes equity.
Home Equity Line of Credit acts like a credit card with the way you borrow against it. The monthly payments are often interest only. The rate’s can increase at any time if the prime rates change because it’s a variable rate loan.
Cash Out Refinance usually extends the life of your mortgage loan. Even though it comes with a fixed rate you will be paying out more in the long run.
Option 5 is Fundwise To Help With Real Estate Investment needs
Fundwise Program Requirements
- 600+ credit score
- Must have an EIN
- Non-owner occupied
- No commercial. Mixed is okay (Residential with commercial attached)
Financing
- $75k – $2.2 million
- Easy application process
- 75% – 90% LTV (Loan to value financing)
- Interest only 12 month loan. 9 months are wrapped into the loan
- 100% advance financing on rehab (This piece is amazing and sets this program apart from all other private money or hard money.)
- Interest starting at 7%
- 7-10 days to fund on average. (As little as 72 hours)
So in my opinion Option 5 is the best one. Just click the link below and learn more. Thanks for checking me out. The Wealthbuilder himself DeVaughn Put in Work Burke signing off for How To Find Funding For Your First Investment Property.