Investing in real estate can be a lifelong venture that offers financial freedom and retirement security.
If you never thought you’d be able to invest, due to a poor credit score or trouble qualifying for a traditional loan, you have other options. A private money lender can help you finance investment property by offering more flexibility and allowing you to build a relationship that can last your entire career.
From the outside, it can feel intimidating to take on this type of investment. But with some thoughtful planning and a solid support network, you can quickly and confidently finance your first investment property.
To help you begin, we will share tips and information on how to earn money from your investments, and how financing your investment properties with a private money lender might be the most beneficial choice.
Why invest in real estate?
It’s easy to feel overwhelmed with real estate investing before you even begin, but once you break it down, it will make much more sense. Plus, the benefits far outweigh the initial work you put into it.
Depending on your situation, investing in real estate can offer you a steady stream of extra income. This allows you to save for big purchases, everyday needs, and retirement security.
If you choose to rent to tenants, you’ll earn extra income every month. If you want to fix and flip houses, you can generate income as quickly as you can flip, and use that money for your next investment.
Through investing, you’ll also build a network of people who will help you create and fund each opportunity. If you enjoy choosing properties, finding tenants, or fixing homes, investing could be a lucrative hobby or it could become your full-time job.
It doesn’t matter what type of work you do, or if you work full or part time, you can begin investing in real estate.
Using a hard money lender to finance your investments makes the process much simpler and less stressful, because you don’t have to have an excellent credit score or wait months to find whether you’ve been approved. If the deal makes sense to the lender, they will do it.
How do you earn money from real estate investments?
The way you earn money from real estate investments depends on your personal strategy and approach. Some types of properties include the following:
- Fix and flip
- Rehab to rent
Renting out properties can include homes or apartments as living spaces, or vacation home rentals. Multifamily properties require large investments, so they’re something you can build up to after working with smaller properties.
Experts recommend sticking to one type of strategy to get started so that you can build a deep understanding and grow much more quickly.
Each type will take its own methods of research and support, but once you’ve decided the type of investment you want to do, it will narrow your search for properties. It also will guide you on finding appropriate market research, rental income, and expenses for the area.
As a beginner, establishing a team of people will help you be successful as you work on both early and future projects. The team should include the following:
- A real estate agent to help you find relevant properties for sale
- A private money lender who will help you make the deals you want quickly
- An accountant to help you with taxes
- A lawyer who will keep you informed about housing market laws
- A home inspector to make sure your properties are in the shape you need them to be
- Mentors with real estate investment experience who can share with you what they’ve learned
The most stressful part of the experience for many — finding the funding — can be simple with the right team of people. Building these relationships are mutually beneficial, so you can feel confident your best interests align with theirs.
Finance investment property with a private money lender
If you have a good credit score, cash reserves, and the time to secure your financing through a traditional institution, you might feel confident this is the best choice for you. For many, either one, or all three factors aren’t feasible, taking traditional lending off the table.
An option investors often turn to is equity partners or joint venture partners instead of lenders, especially if they think hard money loans are more expensive. But this often involves a 50-50 partnership. Even if they’re only looking for 25% of the profits, this still ends up being much more expensive than a hard money loan.
Non-qualified mortgages also have disappeared after COVID-19’s influence on the housing market.
Developing a long-term relationship with a private money lender means a level of comfort is established over time. Lenders often will provide better pricing to returning borrowers because of this relationship.
Financing with Marquee Funding Group
If you’re looking to finance an investment property in California, the team at Marquee Funding Group is interested in discussing your deal.
With a goal to simplify deals that are deemed too unique or complicated for traditional lenders, we make quick, common-sense decisions based on the information you provide. For the best chance at making your most exciting real estate deals, we close in as little as seven days, and provide same-day approvals.
Marquee also offers:
- Common-sense underwriting
- Loan amounts from $50,000 to $20 million
- Owner-occupied or non-owner-occupied consumer or business purpose loans
- Single-family, multi-family, commercial, industrial, construction, and land loans
- Loan-to-value up to 70% (deal specific), construction loans up to 80% loan-to-cost
Building relationships with investors is a high priority for us because it results in mutual confidence and a smoother experience on both sides. We want to do long-term business with you.