With the world economy in a better place, certainly a much more stable one, investors are again thinking of real estate projects. The low prices found just about anywhere in the United States make it an ideal time to invest. Prices appeared to have dropped significantly in states like Florida and California while the Midwest, South and Texas experienced pre-crisis prices.
Regardless of what the overall drop in price one thing did change since the crisis and that is easy financing. The still rigid credit market makes it practically impossible to secure loans that will facilitate real estate investment.
Investors may have a hard time getting a loan, however, it is far from impossible, and some creativity and ingenuity can go a far way. Here is a list of suggestions that can help most investors get the financing they need for their real estate projects.
Get The Money For A Down Payment
You have to spend money to make money and in the case of real estate investment there are no two ways about it. A sizeable down payment is the only way most investors can secure their financing. Anything above 20 percent is ideal with investors that can gather 25 percent being in the privileged position of receiving a better interest rate. Some people try to go around the down payment problem by getting a second mortgage but that is an unlikely option in today’s market.
A Good Credit Score Is A Must
One of the most important aspects in getting a good credit is having a good credit score. Scoring below 740 could end up costing you serious money as most banks charge anywhere between one quarter of a point and two points. Bank reserves are also becoming a must for investors who want to get a long, particularly those who own
Chose Local Banks Over Big Banks
Local, smaller banks have a better knowledge of the real estate market and offer more flexibility to investors who don’t manage to come up with a sufficiently large down payment.
Owner Financing Can Be A Solution
While a less conventional method of obtaining financing, it can work as long as you specify clear information. The trick is to sell you project, your business and yourself while also establishing clear boundaries and an unbreakable set of terms.
Always Try To Be Creative
Don’t count out things like credit cards, life insurance or peer-to-peer investment services. While highly unconventional they can prove to be lifesaving ways of obtaining the cash you need for your investment.