How To Finance Real Estate Investing Deals - Real Estate Investing ...

In order to be successful in real estate investing, you must be able to finance your deals. Knowing the financing options available to you helps you to structure your deals accordingly.

in this article, we explore the options available for financing your real estate investing deals.

1) Buying with little or no money
You can do an unlimited number of deals if you do not have to put a lot of money down.

Wholesale deals is a good example of deals you can do with little or no money. This involves buying a house for a low price, then you turn around and wholesale it for a higher price. There are two ways you can do this.

Contract Assignment:
You locate a house for a low price and put it house contract. You get this contract to your title company or attorney to do title work. You then assign this contract to your wholesale buyer who closes the deal.

When the deal closes, you walk home with an assignment fee. The terms of the contract assignment are clearly defined and state how much your assignment fee is.

Simultaneous closing:
You put a house under contract to buy from your motivated, then put it under contract to sell to your wholesale buyer.

You end up buying the house, then selling it at the same closing table. The difference between your buying price and selling price less any closing costs is what you walk home with.

2) Hard money
These are usually rehab loans with a low time frame such as 6 to 12 months. They have a high interest rate and are usually based on the equity on the property rather than your personal credit.

It can be available fast, sometimes with a few hours or days.

3) Creative financing
Techniques like lease options, owner financing, etc, that do not involve buying the property for cash involve creative financing. You might need to put some money down but finance part of the deal through creative financing.

This can be a big money maker and can allow you to do numerous deals without being limited by money.

Creative financing is not an option when the owner wants to sell for cash, or when the property needs repairs.

4) Revolving credit
This can be a line of business credit, credit cards, etc. They require monthly payments which can get high, and the interest rates can also be high.
This means you are limited to the amount of credit you can access and the number of deals you can do with this type of financing.

5) Private lenders
These are people with cash they can invest. Their money is secured by real estate and are willing to invest it to get higher returns than they can get on bank investments like CDs.

Private money is the most preferred type of financing for real estate investing deals.

6) Mortgage loans
Bank mortgage loans can also be used to finance real estate deals. The interest rates are generally low and the terms of the mortgage can be between 15 to 30 years.

However they can require that you put 10 to 20% down. You must have good credit and you are limited to the number of loans you can take.

Get more free real estate investing education and tips from our blog. Learn how a good automated and interactive real estate investor website can help you close more deals while spending less time, money and effort.

Tags: financing real estate investing, real estate financing, Real estate investing deals, real estate investor web sites

This entry was posted on Monday, June 25th, 2012 at 7:15 am and is filed under real estate investing, Real Estate Investing web sites. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

east of eden weather radio indiana autoimmune disease westboro baptist church news channel 9 insanity workout