Learn How To Start Investing In Real Estate
Learn How To Start Investing In Real Estate

10 Ways The Most Successful Investors Fund Their Deals

Written by Than Merrill

Key Takeaways

  • Looking beyond traditional financing methods can help you fund a deal fast if you don’t have access to immediate capital.
  • Private and hard money lenders are financing options that come with flexible terms that work to benefit both parties.
  • FHA loans are the perfect option for first time investors who don’t have enough capital for a 20 percent down payment.

Funding a real estate deal can be stressful for even the most seasoned investors. When you know you’ve found a great deal with huge potential returns but then can’t figure out the financing, it can feel overwhelming. However, there are plenty of opportunities for funding a real estate deal that you’ve probably never thought of.

There is of course the traditional route of a mortgage loan from the bank. If you choose this route, a sizable down payment is typically required as well as a relatively solid credit score. This route also requires the borrower to pay monthly mortgage payments while the property acts as collateral for the loan. This type of loan is very secure and is usually accompanied by low interest rates; however, the application and approval process does take time. So if you are pressed for time, a less traditional route would be recommended.

If you’re credit score is less than impressive and/or you need capital fast, private money is a great option. Private money can be funding from a friend, family member, or investor you networked with at your local REI club and the terms are always negotiable.

Funding A Real Estate Deal: 10 Options You’ve Probably Never Thought Of

Choosing your method of financing will be dependent upon a variety of factors. Wholesaling a deal with a double close may require you to acquire capital fast, which means  private or hard money would be the best choice. If, on the other hand, you are buying a rental property that you plan to live in, traditional financing might work.

Review these 10 options for funding a real estate deal and you’ll be financing properties like one of the pros: