If you are a beginner who’s looking to get into the very lucrative area of investing in residential property, this is the post for you. One of the most important things for a new investor who doesn’t happen to be independently wealthy is to sort out all your sources for funding to purchase and rehab your properties.
There are tons of different financial options for funding investment property purchases. With a bit of creativity, and knowledge, an investor can use out of the box methods to exercise a financial plan of attack.
Your focus early on should be on building a model that fits and works for your situation. Have a proper plan plotted out and you’ll be able to get a solid cycle of wash, rinse & repeat down pat. To get you on the pathway to setting up your plan, we’ll discuss a few key points for you consideration.
First point. What types of properties are you planning to invest in?
There are a number of property types that you can consider – ranging from single family stand-alone homes, condo units, multi-family apartments or complexes. A clear focus is mandatory for you to be able to carve out your niche I your local or regional market. If you’re going to target apartment buildings, for instance, you’re plan will require a different set of tools than that of investor who is simply looking to invest in single family homes. This means much more extensive market research and a knowledge and understanding of the local terrain; so that you don’t find yourself the proud owner of what eventually becomes an empty white elephant that kills your real estate career.
Point two. What is the goal of your real estate endeavors?
Are you contemplating long-term ownership and management of the properties that you acquire or are you looking to turn properties over for immediate profits? The answer to this question will not only affect the types of properties that you should consider, but it will also dictate the areas that you should and should not consider buying in; along with the funding sources that are most appropriate for the type of investment.
This leads us to point three… What types of funding sources are available to you? Taking advantage of today’s tech – along with a booming economy – there are a number of methods that you can utilize to fund a well-plotted real estate investment. There are a number of online sources that can not only be utilized, but can be pit one against the other to fund your deal — when the deal is good enough & presented with thorough research and financial planning.
Another alternative for your deal might even be crowdfunding. The advent of crowdfunding has opened up a whole new world of possibilities for funding the Right deal. Again, for this (and frankly any legitimate financing, you’re going to have each and every one of your ducks in order). By enlisting the crowd to fund your investment, you not only lessen your personal risk on an investment, you also get fairly cheap money – as the crowdfunding participants will likely be happy with more reasonable terms than that of most other financial sources.
If you don’t have the time or energy to engage the “crowd,” you can go a number of more traditional routes; ranging from your local banks and credit unions to mortgage brokers. The possibilities are wide and varied, it just takes some out-of-the-box thinking and a little footwork to make things happen.