Have you ever wondered why real estate is such a big thing? It gives you the chance to finance property and business deals in many other creative and innovative ways – other than only paying in cash. Want to know more about it? Here is all you need to know about creative real estate financing for your next property deal. You will be thanking us later for introducing you to the new ways of financing.
HELOC is a loan that you can get for the property you are planning to invest in from the bank. It is known as HELOC loan because the amount of money you get from the bank is equal to the worth of the property you are investing in. So basically this loan takes care of 100% cost of the property whilst charging minimal zero interest rate on the repayment of the loan. There are specialized banks that offer HELOC loans to people.
2. 401K Loan
The 401K loan is also becoming reasonably popular these days and you must have already heard about it at least once if you are working with nay organization lately. This loan is all about taking the money from your employer to pay for the property you are investing in. The loan i.e. financial assistance you get from the employer is a huge amount of money. Hence, it basically pays for the complete property.
The unique thing about the 401K loan is not the payment but the re-payment of the loan. In most likely cases, you are able to pay back the loan within 1 year of working in the same company through your wages.
3. Business Credit Cards
This is one way of paying for your purchased property that might never have crossed your mind but it surely does work amazingly. Business credit cards give you the chance to pay for bigger purchases as it starts off at a zero percent interest rate. This is completely different than personal credit cards that tend to have huge interests even on the smallest purchases.
This is why if you plan to smartly invest in your real estate property – the best way to do it is through your business credit cards.
For a major fraction of the process, you will not even be charged a single penny of interest which is surely a huge sigh of relief for real estate investors.
4. Private Money
This is the non-professional way of getting money to pay for your real estate finances but is surely a popular way of doing things these days. Private money is all about taking money on loan from a close friend, colleague or family member (relative) on individual terms. There is no legalities involved in the process and no rules to follow. The money you lend and the payback schedule is all made between you and your loan with no third-party involved. This is usually the only loan that does not charge you with interest.