Whatever your financing strategy may be, success as a real estate investor today requires access to capital when you need it and a partner for the long-term.
With inventory at an all-time low and home prices and interest rates at an all-time high, real estate investors are anxiously trying to figure out which strategy is best: Buy? Sell? Rent? Flip?
The reality is you need more than one strategy and proper financing for each. A well-done fix-and-flip can still reap returns; refinancing equity-filled properties can be a cost-effective way to acquire new properties without tapping into cash; and with the SFR and multifamily market on fire, rentals continue to yield returns.
Funding Your Strategy
With so many options available, it’s important to take inventory of your goals, strategies, and financing solutions—which are as unique as each property. Here are some viable funding strategies to consider:
- Fix and Flip. When you find a good flip, you need quick financing that includes funds to renovate. Get data to support the valuation and know what finishes appeal to buyers in the market.
- Fix and Rent. Rent rates in many markets are outpacing the increasing home prices, potentially turning your flip into a cashflow opportunity for long-term rewards.
- Rehab. Increased labor and material costs pose a risk to your rehab budget. You can finance up to 100% of your rehab budget, so you can stay liquid throughout your entire project.
- Bridge-to-Conventional. A short-term bridge loan can help you quickly acquire and improve the property or generate monthly cashflow required to refi into a cheaper conventional loan.
- Refi Listed Properties. Once you finish your renovation, a short-term loan can enable you to take cash out while it is listed on the market, so you can swiftly move on to your next project.
- Rental. With fully amortized, interest-only ARMs, you can finance stabilized DSCR properties or vacation rentals. Most properties are not required to be leased at the time of purchase because market data can be used to project rental income.
- Recapitalize. Tap into the equity of your rental portfolio by refinancing multiple properties into one loan. With up to 80% cash out on the total value, you can then acquire new properties.
- Construction. Financing new construction or tear downs creates opportunities for experienced investors and developers to expand and take advantage of a highly lucrative market.
Finding a True Lending Partner
Whatever your strategy may be, thriving as a real estate investor today requires access to capital when you need it and a partner for the long-term—not just for the deal on the table. Having a consistent, reliable capital partner with a deep understanding of financing methods and capital structures will create a solid foundation for your business model and enable you to be prepared for winning opportunities.