Years ago, financing investment properties was fairly easy.
You simply walked into the bank, met with the bank real estate bank specialist and completed some forms.
After a few weeks, you received your support.
It has recently changed to become increasingly more challenging to secure good backing during this bad economy.
I have good news for you, I am about to share with you tips that will help you on this task.
The first tip I have for you is to save money for your down payment.
The stagnating economy makes this a very difficult feat to accomplish, but it is critical for securing money for your commercial or personal real estate.
Improving your credit score comes a close second in line.
There are many ways for you to improve your credit score.
Paying All your credit cards on time every month is a good place to start.
It is very counter-productive to open new credit accounts, which will leech your cash flow, at this time.
This approach could actually lower your credit score rather than raise it.
Closing unused credit cards may look highly beneficial; in fact, it is the opposite.
Shutting down unused credit cards lowers your credit score by shifting the ratio of your debt you actually owe to the debt the lenders are willing to give you.
This is not going to benefit your efforts to secure financing for your investment properties.
A third tip in helping you obtain backing for your real estate endeavors is developing a great relationship with your local bank.
By saying local bank I actually refer to the small local banks that have been spared from the worst of the economic hurricane that is raging.
A fourth tip to financing your investment property in this down economy that I would like to share with you is to tap into other financial resources other than traditional banks.
Seller financing is one option you could look into.
Do not forget that this will only be possible if the seller is not the bank.
Typically, a motivated seller will work with you because they have a need to unload their real estate.
If the investment property is in need of significant work, you may be able to find a hard money lender that can give you a loan.
Another alternative for financing investment property besides a bank includes a private money lender.
Cash is not a problem for these private lenders; some with self-directed IRA's.
The good news here is that the investor with the self-directed IRA can actually be your bank so to speak.
This type of lender may request some portion of real estate ownership or perhaps request another type of arrangement.
Either way, it may be a good alternative.