Creative Real Estate Financing

creative_real_estate_financingThis market is tough!  Banks are getting extremely conservative and looking for qualified buyers.  It is harder and takes longer to resell properties then ever before.  But that doesn’t mean you should give up!  Properties are at great prices right now and many homes in California can even cash flow as rentals (I never thought I would see that day).

What are some ways to raise money if you’re an investor?

1. Hard Money Loans are Out There

Hard Money Lenders are alive and well.  Most of them are doing very conservative loans, but if you can find a property that fits their requirements you can get a loan.  I’ve done a lot of research on Hard Money Lenders and pretty much everyone in California requires at least 10% down right now, on the total loan amount, not on purchase price.

I wrote an article that summarizes some of my research on California Hard Money Lenders earlier this year.

2. Cash Partner and/or Family and Friends

If you have time, but little money, you can find someone who has money but no time.  This is a cash partner and someone who will invest with you.  Some of these relationships work great and others don’t.  But if you have connections who have money, investing in real estate at the right prices is much safer then investing in the stock market right now!

3. Credit Cards and Line of Credit

This is old fashioned, but this was one of the main funding sources I used when I got started.  I had a couple Lines of Credit and a lot of Credit Cards, between my businesses.  I charged a lot of the remodeling expenses to my credit cards and carried the balance until the property sold.  Home Depot and other repair stores also give some larger customers a net30 account, which can really help your cash flow.

4. Wholesale Properties to a Partnership or for a Fee

If you have a nack for finding properties, but cannot get the funds to make it happen, you can always find a property and look for someone to come in and buy it (for a fee) or partner with you on it.  This can sometimes be a great win-win for both parties and will help you build enough funds to start buying properties yourself.

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