5 funding sources for your real estate investment
Investing in real estate is always a smart idea. The market may fluctuate. But in the long run, the property value appreciates. The same applies to real estate investors who just want to either build and sell or renovate and flip. Either way, having access to funding is going to determine whether the project is successful or not. So, how can you find funding sources? The following should help set the ball rolling.
1. Credit cards
Credit cards can provide you with immediate access to funding. The downside, however, is that credit cards typically come with variable interest rates, can be tempting for the impulse buyer and are more than likely to provide you with too much money. Either way, it's a good funding source.
2. Home equity line of credit (HELOC)
This is like a second mortgage on your property, only you get to do whatever you want with the credit line you're given. If you qualify, banks can provide you a credit or debit card and a checkbook to a certain limit. This is great if you are into heavy remodeling or might encounter unforeseen expenses. The downside is the interest rates aren't fixed.
3. Home equity loans (HEL)
These loans are like HELOCs. The only difference is that the funds are only given to you in one lump sum and it's a close-ended loan -- you can't ask for more once the loan is issued to you. This is great if you don't foresee any extra expenses. The interest rates are fixed and you have 5-15 years to pay it back, depending on the bank.
4. Cash savings
This is quite obvious. If you've got money saved up, you can use it. The only thing is it might not be enough, and you may need more. This is a good way to get almost immediate access to funds as there is no red tape or hoops to jump through.
You can decide to take out a mortgage on your home if you already paid for it in full. Finance institutions are more than willing to give you this. But if your credit score isn't good enough or you have outstanding mortgages, you may not qualify.
To get the best results, you may need to combine a few of these sources together to get your full cash.
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