11 Real Estate Funding Sources & Development Loans

Key Takeaways

  • There are multiple ways to finance a real estate deal even if you don’t have your own capital when starting out.
  • Traditional loans are perfect for those with decent capital in savings as well as a solid credit score.
  • Crowdfunding, venture capitalists, angel investors, and micro loans are other real estate financing options for those looking to follow a less traditional route.

There are a number of individuals who want to get involved in real estate investing but are reluctant to take the risk.  These people are ready to leave their nine to five job in order to pursue a life of financial freedom, but they are unaware of how to access the right real estate development loans they assume that if they don’t have the capital in their own pockets, it is impossible to get started. However, this rationale is false.

There are a variety of ways to finance a real estate business without using your own money. Not only are there loans issued by the government – who has a vested interest in helping small businesses thrive – but also, there are plenty of private lenders out there willing to take a risk on your business. If you desperately desire to leave your day job so that you can prosper as an entrepreneur, consider these financing possibilities:

real estate development loans

11 Methods To Finance Real Estate Deals

  • Traditional loans
  • Private lenders
  • Venture capitalists
  • Angel investors
  • Small business administration loans
  • Real estate crowdfunding
  • Micro loans
  • Hard money lenders
  • Home equity loans and lines of credit
  • Money partners
  • Commercial loans

Getting started in real estate investing is not as hard as you may think. If you’ve chosen your focus – i.e. single family homes, apartments, commercial real estate, etc. – and your preference of exit strategy – i.e. flipping, buy and hold, or wholesaling – all that is left is finding the capital to fund your first deal.  The importance of understanding real estate financing should not be overlooked because financing is what can help you turn your strategies into realities.

There are a number of lending sources made available to those who are willing to put in the work, which is why “I don’t know how to finance a real estate business” is no longer an excuse to avoid the investing industry:

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How To Find Finance For Real Estate Development

In order to find financing for real estate development, you must start by reviewing your strengths.  The above options are almost always available, but you must understand what you’re getting yourself into before pursuing a particular strategy.

Regardless of what financing option or development loan you go after, all lenders will want to hear certain things. You never want to beat around the bush when talking to any kind of lender. Lay down the numbers straightforwardly and tell them what they can except. Lenders will want to know your timeline, your expected profit, the loan amount required, when they can expect to see a return, and how involved you want them to be. While it is important to appear confident in any meeting with a potential lender, it is most important to be transparent and gracious. Remember, the lender is helping you. Of course the lender will benefit so long as the deal pans out the way you hope it to, they are still taking a risk. Be ready to share your portfolio and answer any question a lender throws your way.

Are you ready to find the right real estate development loans that are right for your deal? Tell us which option  you decide to pursue in the comments below.

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Real Estate Investing Strategies
Real Estate Investing Strategies
Real Estate Investing Strategies
Real Estate Investing Strategies
Real Estate Investing Strategies