One of the most common stumbling blocks for newcomers to the real estate investment sector is figuring out how to fund rental property transactions. There are several available alternatives to beginner real estate investors, but as expected, a number of sources for funding could be very difficult to access, such as traditional bank loans. This is where hard money lenders come in as they can grant the beginners in real estate a level playing field and give them a critical say in the sector. Discussed below are a few of the available alternatives for funding for amateurs in real estate;
- Build to Rent Loans and Fix to Rent Loans
Build-to-rent loans are used to fund the construction of properties that will be rented out. Fix-to-rent loans are used to finance the renovation of residences that will be rented out. These loans are appealing because they provide a single closure for construction or rehabilitation to permanent funding, saving both borrowers and lenders money and time.
- 30-Year Loans
This type of hard money loan is perfect for lenders looking to expand their rental property portfolio with stability and long-term growth. In addition, the relatively low-interest rates and fast closing process of these loans make it a great fit for beginners looking to invest in properties.
- Bridge Loans
This kind of loan gives funds for a limited time until the borrower obtains permanent funding or repays the loan. Bridge loans appeal to hard money lenders because they allow them to lock up money for a short period while still being secured by real estate.
Click here to discover ways of financing your investment as a beginner in the real estate sector.
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