Real Estate Financing Techniques
Real estate financing through a mortgage lender has been the norm for many years with sophisticated real estate investors.
Recently, however, the average investor (consumer) has come to rely on creative real estate financing as a way to avoid the cost of borrowing money from institutional lenders (banks, savings and loans, etc.) and to overcome unaffordable monthly home mortgage loan payments. Even people with good credit and money realize that if they can purchase property with very little or no money down and keep their monthly payments low, they have made a good real estate investment even better, and yes you don't need to attend real estate school to apply these techniques.
Leverage is a term that means getting a little to do a lot. In real estate investing, leverage is the use of other people’s cash. When the leverage is 100%, no money down, it means getting other people’s cash to do everything. If you invest $10,000 to purchase a $400,000 property and the property generates a total return of $40,000 per year, you have, through leverage, earned four times or a whooping 400% per year on your investment ($40,000 divided by $10,000). If you purchased the same property “no money down”, your return of $40,000 would have been infinity.
What kind of properties lend themselves to this kind of financing? The answer is that all properties do. You may also be wondering what kind of a seller would be willing to sell properties this way. The answer is that many sellers will and do.
In this section you will explore 15 creative real estate investment financing techniques that anyone can apply to current or future real estate transactions statewide, and 5 additional techniques summarizing how to convert paper to a cash transactions.
Real Estate Financing To Misconceptions