March 30, 2012. Samuel Valero
Real estate investors have a variety of funding options available to them that allow them to invest in homes and apartment buildings. Unfortunately if they are a new investor or have a low credit score, that lists gets alot shorter.
Thankfully there is a solution for those investors who haven’t gotten to know too many people in the real estate investing community and aren’t great candidates for a traditional loan.
Partnering is the way many real estate investors pull money to buy property. Unfortunately new real estate investors might not know people who they’d like to work with yet or would like to try it out on their own first. Seasoned real estate investors might have the same problem. They like working alone both because they can raise enough money to do so and they want to full financial benefit of their work.
Traditional loans are somewhat rare in the real estate investing world. There are some banks who cater to home buyers and have special programs for them. For the most part, however, the red tape that prevents real estate investors from securing a loan is too frustrating to make traditional financing a regular option. Another barrier to obtaining a loan in this way is that real estate investors lack traditional income statements. Many banks have a problem with lending to people who don’t have regular forms of income or typical jobs. However, many real estate investors have had luck with smaller banks who understand them more.
Hard money lending is actually one of the most popular and easiest forms of financing available to real estate investors.
Hard money in Houston, for example, is so common that many real estate investors and hard money lenders are friends. They hang out in the same circles, go the same clubs and meetings, and know the same people. Hard money lenders are actually considered real estate investors themselves.
Updated March 30, 2012. Published May 27, 2011. Samuel Valero
