Finding The Cash You Need For Investing In Fixer-uppers
When it comes to investing in fixer-uppers and all that that entails, most all people usually fall into one of the following three categories:
A.) No cash or equity, but have good borrowing potential
B.) No cash or equity, but have bad credit
C.) Cash or equity on hand, but have bad credit
Regardless of your particular circumstances, there are at least a few options for you to consider in order to make your real estate investing dreams a reality. Unfortunately, most people think you have to already be independently wealthy to become involved with real estate, but the reality is that it’s possible to finance the large majority of your venture, similar to the way you would with your own primary mortgage loan.
Even if you are rather financially secure, you can still make use of the different non-traditional types of lending and funding that are available today, giving you even more money to then invest elsewhere. While there’s no doubt an entire book itself could be devoted purely to this topic alone, here are some options for you to consider that will cover a few different scenarios.
Using Traditional Financing
Traditional financing, the method you would go about using if you were purchasing your own home with a conventional bank loan, is a viable solution provided the property in question at least passes the inspection and will be appraised at an amount that’s at least equal to the figure you intend to finance.
However, the whole process of completing the loan application, credit checks and necessary appraisals and inspections tend to take up quite a bit of time, but if this is your only option, then by all means forge ahead and get started becoming a real estate investor.
Assumable Loans: What Are They?
Assumable loans refer to those in which a buyer takes over the existing payments on a current loan, and also allows one to refinance and take advantage of lower interest rates when available. The absolute best way to make assumable loans, or assumable mortgages as they are sometimes called, work for you in terms of buying and selling fixer-uppers is to find those properties that were once financed with low interest rates, but that have a higher payoff balance as well as a market value that’s also currently high.
Assumable loans are also a good option to consider if you want to obtain financing but without the hassle of all of the prior qualifications and the two most commonly used types include VA, or Veteran’s Administration, and FHA, or Federal Housing Authority loans.
Using Lease Options
When buying fixer-uppers, lease options, as the name implies, offers one the choice of combining a lease along with the option to purchase the property in the future, although purchasing isn’t obligatory. One of the most attractive features of using lease options when investing in fixer-uppers is that you will need very little cash-on-hand but will still be able to turn a profit but without actually purchasing the property.
Whichever route you choose to go down, just be sure to understand all of the terms completely before signing on the dotted line.
Sal Vannutini is the author of ” The 8 Power Profit Secrets To Making More Money With Less Risk In Real Estate, ” a free strategy report for investors. Get your complimentary copy at www.FastFixerUpperProfits.com today.
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