Investing in real estate can be a good way to make some money, but like with any business venture, it might require a significant amount of capital. To buy your first commercial property, you’ll need money set aside for down payment, closing costs and renovations. Here are three methods of obtaining capital for real estate investing.
Borrow Money from Private Lenders
Although it may not be the simplest option, you may be able to find a private lender eager to participate in your real estate endeavor. Friends and family members who are ready to lend you money to start your business or make additional purchases might be a valuable resource. However, to attract individuals to help you, you need to offer them a larger rate of return than they can achieve from their present investment methods.
Employ the Services of a Hard Money Lender
To secure their loans, hard money lenders use equity-based lending. Lenders evaluate the current equity in a property that you own outright and then offer you a share of that equity, which is backed by the property. As an owner of business properties this can be very useful, but new real estate investors may have equity in a property that can begin the process. Using a hard money loan is simple and quick, and it avoids the red tape that comes with traditional lenders.
Form a Partnership
In the end, you may want to look for a financial partner to help you invest. However, be warned as it’s possible that the terms of your partnership bind you financially to your partner. Any monetary entanglements they may have should be on your radar. Make sure you choose a partnership structure that reduces your personal liability if your possible partner isn’t truthful about their financial status.
Monroe Funding Corp has a wealth of experience and knowledge to help you reach your investing goals. To learn more about Florida Commercial Real Estate Loans, contact us online or by phone at +1 (954) 419-3539.