Rehab Properties: Finding Financing When Banks Are Not an Option
There are times when banks are not an option or you might just prefer not to go through a bank to buy rehab properties. The good news is that there are alternative solutions to help you secure the funding you need to get this kind of property.
Consider Crowd Sourcing
This is the modern way to secure funds from a wide array of people. You can head to a crowdsourcing website, present your plan and people will choose whether or not to invest in you. The amount you can raise is virtually endless and you can use a single campaign to finance multiple properties.
Reach Out to Your Loved Ones
Buying rehab properties can be a lucrative investment and sometimes getting a few loved ones involved is the best way to secure the necessary funds. You can choose to all work together or just work with them as a source of funding. It is important to work out the details before approaching them so that they are comfortable handing over their cash. Know exactly what you want and make sure that you can provide them a return on their investment.
Hard Money Lending
Hard money lending is an option for buying rehab properties. This involves securing a loan with an asset you already own. There is no checking your credit score or spending time waiting on a bank to get back to you. There is less red tape compared to bank loans and you can often get the full cost of the property as long as your asset has a high enough value. This is an option that allows you to avoid banks because they are usually done by small companies or private individuals.
Get a Partner
If you have someone you really trust who is also interested in this kind of work and investing, getting a partner might be a good idea. Make sure that the both of you can split the financial investment and can agree on how much needs to be spent to rehab the property. You often see television shows showing two people who have gone into business together with this type of venture and they each have their own role while splitting costs and profits right down the middle.
You can explore these options when you are ready to invest in rehab properties. Consider your overall investment goals with this kind of property and determine which type of alternative funding works best for your needs.