Real estate investment loans provide an easy and accessible means of funding various property investments. Loans may be available both for residential and commercial investments.
However, commercial loans tend to be more costly than their residential counterparts and require either a significant down payment or substantial equity in property as collateral. Furthermore, lenders require applicants to meet certain qualifications while having strong personal credit ratings before being considered eligible.
Hard Money Lending
Hard Money Lending is an attractive solution for real estate investors seeking quick funding of their deals. While bank loans typically take 30 days to process and fund, hard money lenders offer funds within just one week.
Hard money lenders usually do not perform credit checks, instead focusing their loans on collateral value alone. Although not offering 100% financing, hard money lenders provide typically between 65%-75% financing based on ARV (After Repaired Value).
Investors with lower credit scores are also likely to qualify for hard money loans. Some lenders may even consider applicants with poor or no credit who can put up additional assets as collateral or co-sign the loan, in exchange for better terms or if they possess an excellent personal history.
Hard money lenders tend to accept short-term loans more readily than traditional mortgages and their application requirements are less stringent, making the process simpler for both novice and seasoned investors alike.
Partnerships
Real estate investment partnerships (REIPs) are legal structures that enable multiple people or entities to work collaboratively in order to invest in property. Each partner shares in its management and profits.
Partnerships offer an ideal solution to those looking to purchase property but lacking the financial means. By joining forces with another person or company to fund this investment and bring their unique skillset and expertise, partnerships allow investors to realize their dreams of property ownership.
There are various kinds of partnerships, with limited liability partnerships (LLPs) being one of the more popular structures that offers protection for its members.
Real estate partnerships typically consist of two partners – a general partner (GP), who handles day-to-day management of the property; and limited partners (LPs), who supply capital. A GP may be responsible for finding financing options to make this process simpler for LPs.
Microloans
Microloans are becoming an increasingly popular alternative to hard money lending. Typically offered through nonprofit organizations that specialize in helping credit challenged or low-income entrepreneurs, these small loans often cover startup costs only and do not need collateral or any security.
Traditional bank loans typically feature longer loan terms of around two years; therefore, alternative forms of financing may provide real estate investors with faster return and reduced risk than other methods.
Swaper platforms have become an invaluable source of real estate investment loans for investors. Many loans issued by individuals partner with investor platforms such as Swaper.
These microloans may be used for real estate purchases, refinancing, business expenses such as working capital, inventory, supplies, furniture fixtures machinery equipment etc. however they cannot be used to pay off personal debt or make personal purchases.
Property Management
Property management involves overseeing real estate investments such as residential, commercial and industrial properties. A property manager’s responsibilities may include marketing to prospective tenants, leasing units and managing tenant relations while upholding overall quality in their building’s overall design.
Property management services can be an invaluable asset for investors, helping to keep on top of taxes and secure documents.
Some property managers even take on bookkeeping responsibilities for their clients, saving time and money in the process.
Property managers serve an essential purpose: they protect the value of assets under management while providing passive income to clients. Furthermore, property managers also identify and weed out potential problem tenants to ensure a stable long-term tenant base.
Property managers in each state vary in terms of licensing requirements; some require them to be real estate brokers while others only mandate they hold a property management license.
