Many inexperienced real estate investors think that you make your money in real estate when the property is sold. Successful real estate investors know that you make your money when you buy the property. In order to close on most real estate deals you need to have financing of some sort. Financing can come from a variety of sources: banks, seller carry back, and friends and family. Most of these traditional sources require a substantial down payment and a fantastic credit score.
You may have thought the days of no money down real estate purchases were long gone. Think again. With a hard money loan, depending on how good a deal you have negotiated, you may be able to purchase the property with little or no down payment. Hard money loans can also provide you rehab money for your project. If your credit score is a little dinged up, you still may be able to obtain the loan. We typically look for a credit score of 660.
With a hard money loan, you will pay more in points and interest, but these loans are on a short term basis. Think about it: What would you rather do: purchase the property with a hard money loan or not purchase the property because you can’t qualify for traditional financing and don’t want to pay a higher rate and points? The reality is hard money loans can help you build your wealth. The choice is yours— go ahead and create an account.
Many inexperienced real estate investors think that you make your money in real estate when the property is sold. Successful real estate investors know that you make your money when you buy the property. In order to close on most real estate deals you need to have financing of some sort. Financing can come from a variety of sources: banks, seller carry back, and friends and family. Most of these traditional sources require a substantial down payment and a fantastic credit score.