How To Get Investment Property Funding? By Thomas Rothstein

Written by admin on April 1st, 2011

How to get investment property funding? By Thomas Rothstein

I can remember in the not so distant past it seemed that the primetime line up’s were filled with TV shows like “Flip this House”, but now you can hardly from any new episodes of the once hit reality show. The reason is 2006 hit with the US Real Estate Market with the force of an atomic explosion, and the devastation was the exact equivalent.

We all have heard the countless stories of how banks simply pulled the funding on projects before the foundation cement had a chance to dry. Many investors who relied on the TV show as a step by step guide on how to get rich flipping properties had no idea of the looming foreclosure surge that was headed our way.

In the aftermath many investors lost big time in the real estate market. Some even emptied out their retirement accounts in hopes of cashing in on the flip boom only to discover that they now they have to eat another mortgage.

As bad as it all sounds there were a few investors who still made money throughout the crisis. This savvy group came out of the whole entire ordeal without a scratch and never lost one dime of their own money. Up until now the term Hard Money Lender is still as foreign to most people as a calculus equation, but for the small percentage of investors that are familiar with the term the end results can equal pure profits.

Hard Money lenders assume the majority of the risk in real estate investing by only investing in properties at a profitable LTV (Loan to Value) Percentage. The actual investment property is used as collateral therefore there is no need to use the investors money, or in most cases their credit. Hard Money Lenders are simply looking for really good deals, and to establish a profitable relationship with investors based on their ability to eventually sell the investment property.

The sweetest deal going right now is offered by a company called The Alternative Funding Group. Despite the fact that they will only invest in the deals within  certain states, there are not requirements that you actually live in one of their servicing states. The basic requirement is that you have at least a 680 FICO (credit score), and at least four months of monthly mortgage payments in the bank.  

If you meet these simply requirements then they will cover 100% of the acquisition cost including all closing cost. I found that pretty amazing, just the fact that I would not have to come out of my pocket with one dime prove to me to be a really good deal. 

As the real estate market rebounds investors will need to get theirs hand on needed funding before the properties values return back to normal. Once you rehab a property at the current LTV then sky is the limit as to how much you will make on the actual flip, but you will need to have a strong funding partner.

If you are seeking funding for a renovation project please consider the wonderful people at Alternative Funding Group.

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