If you’re looking for ways to get fast financing to secure the next property in your investment portfolio, you’ve come to the right place.
For those prioritizing the speediest option, conventional mortgages are out. They typically have lower interest rates, but they require a larger down payment and can take months to process—meaning you’re waiting much longer than necessary before the cash is in your hands.
This article discusses the best ways to quickly finance your next property investment project.
Investment Property Loans
An investment property loan is a good fit for you if you have a specific intention for your property and plan to hold on to it for a long time. (That means these loans generally aren’t the best option for quick-flip projects.)
The most convenient option for properties you’re adding to your rental portfolio is (unsurprisingly) rental property mortgages.
These loans are specifically designed for investment properties. They often have stricter qualification criteria compared to traditional mortgages but require smaller down payments than traditional mortgage payments.
Hard Money Loans
One of the best financing solutions for fix-and-flip projects is hard money loans.
These short-term loans are based on property value and are often used for quick property purchases or renovations, when you want fast access to money to purchase a property, do it up, and sell it.
The major advantage of hard money loans is that you can still receive financing even if you don’t have a perfect credit score, making them more accessible to everyone.
Cash-Out Refinancing
So far, we’ve only talked about loans you can take out to fund your investment projects. But what if you want to dip into your own profits to make your money go further?
In this case, the best option is cash-out refinancing. This is where you can refinance the current mortgage of your home (or another property, if you happen to have any on a mortgage), and receive the difference between the existing loan amount and the new debt in cash.
As an example, let’s say you own a home on a $100,000 mortgage, but it has since increased in value to $150,000. With Arizona cash-out loans, you’ll be able to refinance your home, then pocket the $150,000 difference. Of course, you can use this however you want, but the most logical thing to do is invest it.
Private Lending
Finally, borrowing money from investors, businesses, or even a trusted friend or family member can be an option, but it’s essential to have a solid investment plan.
Some investors even join together, combining their finances to quickly fund a larger project, then splitting the funds. Just make sure to write up an official agreement to prevent somebody from getting the worse end of the stick if the deal turns sour.
Final Word
Hopefully, this article has given you plenty to mull over in the world of real estate financing.
You certainly don’t need to have cash in the bank to fund your next project. Whichever option you choose, you will need to commit fully to it and closely stick to the agreed terms to prevent financial or even legal repercussions.
