Funding for real estate investments can be a challenge to secure, with many traditional lenders imposing stringent requirements on loans. Still, there are a number of alternatives available to you when you’re looking to fund real estate investments, many of which can be advantageous to your business.

Bank Loans

Although traditional lenders have definitely made their qualification standards much tighter since the economic downturn, there are still some situations where funding can be obtained. Typically, a down payment somewhere between 20% and 25% would be needed for approval, and it will help if you have a very strong credit rating, upwards of 700.

Hard Money Loans

These are loans based on assets, which means they’re secured by actual real estate. The advantage of hard money loans is that they’re generally based on the value of the property being purchased, rather than on the borrower’s credit score or business history. The drawback to hard money loans is that interest rates are generally significantly higher than traditional loan rates.

Private Money Loans

The sources for private money loans are generally individuals who have money that they’re willing to invest, and this can come from business partners, family, friends, and possibly even other real estate investors. Interest rates on private money loans are generally relatively low, and there’s a good deal more flexibility associated with these loans than there would be from a traditional lender. It’s also true that private money loans can generally be finalized in a much faster time frame than any traditional loan could be.

Peer-to-Peer Loans

Another source for real estate investments can come from crowdfunding or peer-to-peer loans as they are sometimes called. Since the advent of the Internet, it has become possible for investment opportunities to become known to a wide variety of potential investors, thereby increasing the pool of funding sources. These types of loans are often much less expensive than traditional loans because there are no fees paid to people like accountants and attorneys.

Need funding for real estate investments? 

If you just need funding in order to realize your next big real estate transaction, we may be able to assist you financially. Contact us at Prime Wealth Development, so we can review some alternatives with you that may provide you with the needed funding.