Water Finance Management

Finding the cash to get started in the real estate investing game is one of the trickiest parts of the game. After you have been at it for awhile you will most likely at some point in time find yourself in a position of having all of your money tied up and needing some additional income or capital. This is after all not a traditional 9 to 5 and the money comes in big chunks at times and not at all during others.

Traditional Financing

The first most obvious source of money is simply traditional financing. Banks have pretty strict requirements and you are forced to fill out numerous forms and wait for approvals. This is not the ideal method of purchasing investment property but sometimes it is the only option and is still the most common option used by traditional buyers or people getting into investing.

Owner Financing

Real estate investing is about solving peoples problems and in return you can often ask them for a favor. Owner financing can be that favor. This keeps your slate clean with the bank and often allows you to close faster and ask for better terms. This is an area of creative financing with lots of potential for you and the seller.

Friends and Family

Ask for a loan from people that know and trust you but may not have the time, energy, or knowledge to get into real estate investing. Make this legitimate and get all the signatures required for a legal transaction. This type of loan can really give you options when it comes to good terms and flexibility. Be careful not to alienate the people closest to you with these deals if they go south, don’t ask unless its a sure thing, and make the bank aware of what they are getting into.

Credit Cards

As frightening as it sounds credit cards can be a great option at times and for certain deals. If you need short term cash and are certain you will be able to pay off the balance pretty soon this can be an option. Some people finance the cost of improvements of a flip on credit cards and are able to pay the balance when the property sells. Some come up with their down payment for a property on credit. Risky, yes, but in the business or real estate investing you have to be willing to take some risks.

Hard Money

Kind of like credit cards but a little more structured. These are private investors that can close fast but usually charge a pretty significant rate for the loan. Same as with credit cards, if you know you are going to be able to recoup your investment in the near future this is an attractive option.

Savings

Yup, I said it. Spend your own cash. Borrow against your IRA, spend your retirement, even your kids college savings (if you are really a risk taker). Real estate has much more potential than the stock market or savings bonds. After all its only money and you can’t take it with you.