Creative Investing and Financing Techniques

Everyone knows investing in real estate is one of the most effective ways to accumulate wealth quickly, especially when it comes down to not needing a lot of capital to do so. This all depends on your creativity however. Traditional real estate investing by definition involves the purchase, ownership, management, rental and/or sale of real estate for profit. Under this definition, real estate is an asset form with limited liquidity relative to other investments, and traditionally is highly dependent on cash flow, but when we look at creative ways of investing in real estate a lot more opportunities are open to us.


How can one obtain the right financing? This list is by no means all the ways available, but they are the most popular


Partnerships are fairly common because this is first thing a lot of real estate investorsthink about doing when they start out. They want to find somebody who can put up the money and split the deal with them fifty-fifty. This is an option but there are better ways to make a lot more.


Hard Money Lendersare individuals or companies that have cash ready for you to borrow. Even if you have a low credit score this is a good source for getting funds quickly and is usually a better alternative than traditional banks. Hard money lenders don't like to lend more than 65% of the fair market value of a real estate property, so you have to think about the better the deal the more likely that they will lend you money.


Private Lenderscan be an even better alternative to hard money lenders because you can often arrange better terms since you are dealing with someone privately. A private lender can be anyone, even friends or family. Everybody wins because you are offering them a much better rate of return than they will get in their savings or mutual funds and it’s secured by real estate.


“Subject to” Financingcomes from the clause “subject to existing financing”. Doing things this way you are either leaving the present financing in place or simply taking over the seller's present mortgage. The loan papers do not contain your name at all. It will stay in the seller’s name. There are many other ways as well to do similar seller financing. If you have poor credit and want to begin investing quickly, this is an excellent strategy.


Wholesaling or Flippingare specific real estate investing strategies that are essentially creative solutions to eliminate the need for obtaining any funds at all. Using this you can sell the property for a quick profit to another real estate investor or buyer when using an agreement you tie up the property at a discount. There is no need for excessive cash, credit or financing because of this and it's virtually risk free with no need to do repairs or work yourself. This is why when it comes to making quick cash in real estate, this method of flipping houses is one the best routes to take not only for avoiding many of the financing headaches, it allows you to make cash more quickly for today's real estate market. You need to look at as many options as you can then compare each one of the terms. Based on your individual circumstances, you'll know what will work best for you this way.