To invest in real estate, you must understand how to get creative with your financing – especially under current circumstances. Today, many investors are unable or unwilling to meet the new stringent reserve requirements from agency lenders. Pursuing alternative financing to acquire your property with the intention to refinance should be on your radar. Why? If you are an investor that is attempting to take advantage of distressed deals or you are looking to expand your portfolio financing may be hard to come by. Alternative financing sources fill the gap and allow investors to close the deal faster and potentially cheaper.
Consider alternative financing IF you…
1. You need cash now to acquire or renovate
2. You are struggling to secure financing
3. You do not qualify for financing
4. Are not pleased with financing options from traditional sources
5. Don’t want to pay the large escrows required by agency debt right now
Who to go to?
– Reputable hard money lenders
Reaching out to these alternate funding sources now will allow you to better understand your financing options, and develop the relationships that will allow you to secure financing when you need it. When you talk to other investors, or brokers, ask them if they know any lenders. Then start making calls.