Real estate investing requires financing, and you have several options for financing the purchase of a property. As an investor, you have more options than a homeowner who will buy and live in a property.
Property Management Manatee: Conventional Financing
You have the option of getting a regular mortgage that is provided by banks or credit unions and community financial institutions. You also have the opportunity to go to a bank and get a commercial loan. This is one way to do it.
Property Management Sarasota: Diverse Lending Options
Some investors look outside the normal framework.
They look at private lending or hard money lenders. Those options come with lenders who are not regulated like banks are. They are individuals who are lending you money based on the value of the property you’re buying. They hold the note, and you pay them back with interest. Typically, there’s a higher interest rate than there would be with a bank loan.
Some financial institutions are offering portfolio loans. If you’re buying a number of properties or increasing your portfolio to 10 or 15 properties, some banks will lend on the value of that portfolio rather than individual properties. This gives you more flexibility as an investor to jump on opportunities as they arise.
Property Management Manatee: Seller Financing
One of my favorite ways to finance an investment is with seller financing. This is a great way to borrow money, if you can make that arrangement. In this case, the seller holds the note. The seller doesn’t necessarily need the cash, but wants someone to take over the property and pay them interest. Sometimes that works out well for the investor who doesn’t have the capital and doesn’t want to go to the bank.
There are lots of different ways to finance an investment, and one of them will work out best for you. Talk to an expert who can provide you with property management services and or contact us at Gulf Coast Property Management.