Investment property loans allow you to put other people's money (OPM) to work for you. Set yourself up for success and use safe investing strategies that keep your money in your pocket. Never use your funds because it limits your scope of investing. You can only personally finance a limited number of properties. - You're not Elon Musk. And it would send your risk exposure soaring like a rocket.
Hard money for short-term house flipping & rehabbing.
Private money to buy properties, hold & build long-term wealth.
IRA funding to defer taxes & increase asset protection.
Small Business Loans to start or grow an investment business.
Investors like to use loans that are asset-based with easy qualification and paperwork. However, depending on their exit strategy sometimes conventional financing is needed, which has stricter qualifications.
No matter which you choose, get funding set up first and dramatically increase your buying power. You'll be prepared to negotiate like a pro and make offers that won't be turned down.
The favorite is short-term, hard money funding. It's perfect for flipping houses or properties needing rehab before hitting the market. Lenders are readily available across the U.S., and online applications for loans are convenient. With a quick, 5-10 days to close. The property (asset) must qualify- NOT the investor or your company. The lender is not concerned about your outstanding debt or credit score. Instead, they will want to know all about the property, the repairs costs, timelines for completion of the rehab, and the exit strategy.
Private money is the second choice. It's ideal for all types of investment deals, especially rental properties with a long-term buy and holds. The interest rate is low, and the loan to value (LTV) is 90-100%, and in most cases, the terms are determined by the investor. Securing private funding is all about business relationships. Most investors become personally acquainted with the lenders.
Angel funding. Local JV capitalists. The angels provide money along with mentoring and business building. Marcus Lemonis is a beautiful example.
Equity partners. They are usually silent and nonparticipating and only want a share of the deal (pie).
Business partners. Like to participate and want a piece of your business.
Seller financing. It is a powerful, strategic option when you purchase a property from a burned-out landlord or a homeowner with high equity who needs to avoid a large tax bill. It requires real estate finance knowledge and negotiating skills.
Crowdfunding. A large group of individuals, each is contributing a small number of funds.
401K and self-directed IRA retirement accounts can fund investment property loans. The money can come from anyone's account and be used to invest in your business or purchase properties.
It's a smart way to gain tax advantages while growing and using retirement money. There are no penalties, no tax, no banks, no loans, and no credit checks. And it also acts like a bulldog by offering an extra layer of asset protection.
A 1031 exchange. Just roll the money into another property of the same value and offset capital gain taxes, income taxes, and a lot more. And it, too, automatically provides another layer of asset protection.
With a small business loan, you'll be able to build your investment business quickly. The day-to-day operations, laptops, training, overhead, advertising, and operational systems are just a few of the expenses that need payment long before a property is bought or sold. And if you're worried about paying the bills, your focus will not be on buying & selling properties. Use funds from a Small Business Loan to buy inventory- like rental properties and tax deeds.
Investor tip: Prove that you're a professional investor always provide accurate information & full disclosure to your lenders.
Get investment property loans and never worry about losing a deal or where you'll find the money to grow your business.