To invest in real estate, you need money for a down payment and for the actual purchase of the property. There are different ways to get the money you need for investing and buying property. This article is intended to share some ideas of how you can get the money you need to buy property.
Although most people do not have the actual liquid cash to buy property, cash is of course one way to invest in property. So if you are fortunate enough to be in this situation, you can simply buy property with cash. This is the simplest, fastest and most cost effective way for a buyer to purchase real estate. The biggest benefit being, you do not have to use a lender, which saves a lot of time, money and energy.
The more typical way you can invest in property, is to save for a down payment and get a loan from a financial institution like a bank or a credit union. Today, the most popular type of loan with the lowest down payment is the FHA loan, which allows a qualified buyer to put as little as 3.5 percent as a down payment. There are many other types of loans that are available, which you can consider when you speak to a loan officer and get prequalified.
One possible way to get money for a down payment to buy property is to “pull” money out of a property that you currently own. This is often referred to as leveraging. You always want to be careful to never overextend yourself financially. But if you are fortunate enough to have good equity in a property or properties, you can consider using your equity and have it work for you. And today with the historically low mortgage interest rates, it is in a buyer’s best interest to take advantage of these amazingly low rates while they are available.
You can also syndicate, which is simply getting two or more people to invest together in property. The concept here is to build greater capital and buying power to buy a larger property than you could by yourself. There are advantages and disadvantages to syndicating and if you ever pursue this method of investing, make sure you have a written agreement with the individuals you are investing with.
It is not the first choice in lending, but there are also loans that are available for people who do not qualify with traditional lenders. These loans are referred to as hard money loans and are offered at a higher cost and interest rate to buyers who would not otherwise qualify.
These loans allow buyers to still buy a property even though they may have had a foreclosure, bankruptcy or just general bad credit. If you fall into this category and you wish to buy a house, it is still possible with this type of loan. If you get a hard money loan, you can always refinance it at a later date when your credit score has improved and you are eligible for regular financing.
Remember that real estate has always been one of the best investments in the world throughout history. So do not be afraid to buy property. Particularly now that we are still in a buyer’s real estate market with significantly lower housing prices from five to six years ago and that mortgage interest rates are at an all-time low.
Until we meet again, enjoy your home life!
Trent St. Louis is a licensed Real Estate Agent and a member of the National, California and San Diego Associations of Realtors. You can reach Trent at The Metropolitan Group at 619-300-1621 or at SpecialAgentTrent@gmail.com CADRE#01273643.
