How To Get Investment Property Financing In A Tight Market

Cash is King When it Comes to Investment Property Financing

The best type of financing when you want to get a property at rock bottom pricing is no financing. This means that you use all cash to buy the property so that you can get a really low price. The easiest way to do this is to find private investors who are getting low rates of return on their retirement or other investment funds. Then, you can make “all cash” offers on commercial or residential property and use your investors money as your financing source.

Creative Methods For Investment Property Financing

In a market where lenders are hesitant to provide financing for investors, you can put together creatively financed offers as a way to help a seller out of a tight situation, and get a great deal for yourself in the process. You’ll need to make sure that you’re working with a motivated seller, something that is easy to find in today’s real estate market. Then you can make offers using creative financing methods such as a Master Lease Option, Owner Carry Financing, and buying while leaving the Existing Financing in place.

No matter what method of creative real estate financing you choose, the advantage of getting started now is that you’ll be able to build your real estate portfolio without having to wait for lenders to relax their lending criteria. This gives you the chance to get into owning more real estate at a time when prices are at a low point. Smart investors work to connect with private parties who may be able to provide funding for their real estate deals.

Types Of People That Might Provide Cash For Your Investment Property Financing

I’ve discovered that it’s hard to tell if someone is going to be a good candidate to provide you with the funding you may need for your investment properties. Sometimes the person who looks like they don’t have much money at all can end up being one of your best sources for investment property financing. So don’t rule out anyone when you are putting together your list of potential private lender prospects.

The best way to approach someone is to simply mention that you are buying houses or commercial property to take advantage of all the great deals that are available. Then ask them this magic question:

“Do you know of anyone who might want to be earning higher rates of return in their IRA or other retirement funds?”

If they say, “Well yes, I do!” then you’ve just found another possible source of investment funds. Once you get a positive response, make sure that you don’t chase after them. Instead, You’ll want your private investors to be chasing after you. So take it easy. Say something like:

“Everything I have right now is fully funded, but if I did come across something new, would you want me to at least let you know about it so that you could decide if you even had any interest in getting a stronger rate of return or not?”

Then you make sure you have their cell phone, and email address so that you can “tickle” them with potential investment financing deals. In an email or on a phone call you can casually mention the big property that you were looking at last week that “Didn’t meet the requirements” that you demand for your investors who help to provide the funds for your investment properties.

The Key To Getting Investment Property Financing

The formula you are going to be following is to mention a potential investment property financing deal you are working on, but then “take it away” because it either did not pass your review or even better, it did meet your requirements, but other private investors that you are already working with got there first and now it is no longer available. It’s strange, I know, but people always seem to want things that they can’t have. So use this to your advantage when you are looking to attract investment property financing.