No Money! No problem…
Wednesday Jan 18th, 2023
Investing in real estate property is always a great idea because of low-risk investment and stable passive income…
But to invest in real estate, you need a certain amount of cash to get started.
And if you don’t have cash in hand, don’t worry…
Taking out a property investment loan can be the best way to ink the deal.
But before you borrow any sort of loan for investment property financing, keep in mind that there are several forms of loan financing.
And not all apply to your needs.
Choosing the wrong form of loan may affect the sustainability of your project.
So it is important to consider the criteria of each type of loan and how the specific options operate before contacting the lender.
There are two of the investment property financing options
Option 1. Conventional Bank Loans
With conventional financing, the typical expectation for a down payment is 20% of the home's purchase price, but with an investment property, the lender may require 30% of funds as a down payment.
With a conventional loan, the lender checks your personal credit score and history to get you confirmed whether you’d be able to afford the existing mortgage and monthly loan payments on an investment property.
Option 2. Fix-and-Flip Loans
These loans are typically short-term loans that help borrowers to renovate their homes so they can sell at good rates…
The lenders pay the money to the borrowers. And once borrowers sell their houses, they repay the loan.
But there’s one downside to this, the interest rate can be 18%, depending on the lender, and your timeframe for paying it back may be short.
These types of loans do not require tough criteria, as the primary focus is on the property's profitability…
Sade Sanni, Broker of Record.
P.S. There’re other options as well.
If you want to know more, we can sit and talk on the best option that meets your needs.