Creative Strategies for Financing Your Real Estate Deals
While having access to capital is always ideal, not every investor has access to enough for the project they’re looking to do. That doesn’t mean you can’t still make the deal happen. It just takes some creativity and some know-how!
So we’re going to give a quick breakdown of each. From there, definitely dive into them more by doing your research on contracts, different strategies, etc.
Strategy #1: Seller Financing
To bypass the tedious banks and traditional loans, you can opt for seller financing. When you use seller financing, the seller agrees to let you pay the purchase price over time in monthly installments. The seller also benefits by bypassing underwriters, loan requirements, and other red tape.
Strategy #2: Private Loan From a Self-Directed IRA
IRAs can be used to invest in alternative assets, including real estate. By locating an IRA lender, you can create a win-win arrangement: they receive a solid return, and you get tap into the funds needed.
Strategy #3: Lease With Option to Buy
In this situation, you would lease from a landlord that may need some help maintaining and managing their property or a seller who doesn’t want to sell right away.
For example, the landlord would continue paying the taxes, insurance, and major expenses—while the renter would handle turnover costs and basic repairs. In exchange, the renter’s lease would have the right to sublease the other units for an added source of income. Many times, you can acquire property with this strategy with no down payment of your own.
Strategy #4: Master Lease + Option (With a Credit Partner)
Say, for example, you find a great rental property—but you don’t have enough cash to float it yourself. You find someone who has cash for ¼ of the down payment, but they also have excellent credit. Along with your credit partner, you would have additional leverage to secure the loan.
Conclusion
Like I said in the beginning, ideally you want access to as much capital for your real estate deals as possible because it makes things MUCH easier. However, if for whatever reason you don’t have access to capital (which you should be now if you’ve booked your Real Estate Funding Strategy Call!), these are some good creative strategies for still getting your deals done.
If you need a term sheet for an active deal that needs funding, please fill out our Real Estate Funding Form. It takes less than 5 minutes to complete with no credit pull.