Finance Roll

The number one question from all new real estate investors is "Where do I get the Money"? Here are 7 resources used by investors across the country in their businesses everyday and very successfully.

1. Owner Financing - Using the present owner to finance your purchase will give you the best opportunity to make big profits. With owner holding the first mortgage you may be able to get a no interest or very low interest loan with no payments until some future date or when you sell the property.

2. Subject To - Taking over the existing financing (not assuming the loan) making the payments current and keeping them current with your tenant buyer in the house making monthly payments including some profit for you.

3. Private Financing - Private lenders, friends, family, acquaintances, professionals Doctors or Attorneys, neighbors. These people must have investment cash that is currently earning low interest in CD's money or market accounts. You can offer a first mortgage with 60 to 70% LTV on your investment properties 2, 3 or 5 years at 10% to 15% interest with no payments until the end of the term or interest only payments at a lower rate during the term.

4. Self Directed IRA's - Yours, a relative or any of the investors from your private financing group. A self directed Roth IRA allows you to invest in many areas including real estate. Your children's self directed educational IRA can also be used to purchase real estate. All profits from the purchase and sale go directly back into the IRA. Imagine sending your kids to college TAX FREE by using a self directed IRA.

5. Hard Money Lenders - The property is the qualifier, loans based on 60% to 65% of the ARV. You pay 2 to 5 points rolled into the loan, at a higher interest rate 13% to 18% and all the normal fees (appraisal, survey, insurance, closing attorney). Based on the sale price and the condition of the property you may end up bring cash to the closing.

6. Flip the Property - Sell or assign this property to your buyer before you close on the deal or hold a simultaneous closing where you don't take ownership but you do profit in the transaction. You can make a quick profit without any investment on your part.

7. Buyer Financing Your Purchase - Having your buyers down payment cover your out of pocket costs of purchase. Use this on a subject to or owner financing deal where cash is needed (not your cash) to close. When your buyer qualifies for a permanent mortgage complete the sale payoff the subject to mortgage or owner financing and take your profits.

Notice we didn't go to the bank or mortgage company for any of this money. Each can be used by any investor for their real estate purchases and wealth building. Real Estate investing is an on going learning process of new and old techniques that will grow your wealth faster than any other type investment.