Understanding The Fundamentals Of Real Estate Investment Funding

For the real estate investor, one of the main challenges is securing the financing of a new venture. Rarely would a first-time investor have sufficient capital on hand to acquire property and, thus, must rely on a broad range of funding options.

Image source: biggerpockets.com

Typically, though, many first-time investors would fund real estate acquisitions for investments through more conventional loans, often through the same home mortgage that they used to acquire their own homes. This is especially advantageous to investors of real property, who can use the income generated from tenants to pay off loans faster than expected.

Besides mortgages, however, investors can instead seek out a variety of alternative loan options. Some investors can have a fortuitous moment and receive a private loan from a trusted friend or family member or secure a hard money investment from a private businessperson and forge terms favorable loan options. Others, meanwhile, may be able to tap into nonconventional options such as real estate trusts and whole life insurance policy loans.

However, one of the most reliable loan option available to landlords is investment property loan, which often provides the same advantages to mortgages while offering additional benefits to more experienced landlords. Unlike regular mortgages, investment property loans count rental income when estimating the borrower’s debt-to-income ratio, which can help established landlords secure more funding and expand their portfolio of properties.

Image source: 37parallel.com

Tapping into the funding needed for real estate investment can be a challenge for the new investor. Steve Liefschultz and Equity Bank provide assistance through an assortment of investment lines of credit and real estate loans for investors and entrepreneurs throughout Minneapolis and Minnetonka. Visit this page for more updates.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s