7 Amazing & Creative Real Estate Financing Techniques
When we talk about real estate financing, we mean this to be the core of this investment. For one to succeed in this real estate, financing is the key to everything. There are indeed creative ways to finance your real estate investments. To do that you need to understand the principles involved in creative real estate financing. Let us look at the 7 amazing & creative real estate financing techniques to help you out.
These techniques have real yielded results and that remains to be seen but it is sure they have worked for some people. If you believe in it, and use them well, perhaps it will work after all.
The following are the creative real estate financing techniques;
1. The land contract
This means that you are allowed by the seller to continue making payment and will hand over the title deed to you when all payment has been completed. The title deed will act as security before the completion of the payment.
2. No-down or low-down loans
Typically, with these types of loans, your income proof or credit status is not required. There are banks you can access with this method online.
They’ll allow you to borrow 70% to 80% of the property purchase price and you will look for the 30% or 20% considering the amount you have been given. This makes the investment easier because much of the amount is covered.
3. Getting help with financing through the seller
You can sometimes pay a down payment of only 5% if the bank allows a loan of 90% and the seller is allowed to take back a second mortgage from you for 5%. This is a very great method to finance your real estate investment.
4. Borrow from friends and family
Getting money from friends and family is very essential but if you decide to do this, keep it official. This is to avoid some ugly issues that might crop up after the deal is done.
5. Use hard money lenders
When we talk about hard money lenders, we don’t mean illegal money lenders. These lenders charge high interest for short-term loans. You can find them online or by asking around.
Usually, you will use this financing technique to buy, fix and sell real estate. For example, you earn your money fast if you get $35,000 on a real estate project, the $15,000 interest that you incur may be small for you after perhaps 6 months or so.
6. Credit card advances
This tends to be a very risky technique but very good in achieving the goal of real estate investment financing.
If you have a credit limit that is high enough for let’s say a $9,000 down payment on a fixer-upper which potentially makes you $18,000, this could turn out to be zero down payment deal after all.
7. Use your retirement accounts
This is the last option you can use to get money to do your real estate financing. Although it happens at an old age, it is the best technique that is hassle-free. You can do it before you retire but first, you can to check with the country laws concerning retirement benefits.