Tobias McCosker - Discover The Best Ways to Fund Your Real Estate Deals

Discover The Best Ways to Fund Your Real Estate Deals Tobias McCosker

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Any investor knows by now that the scariest step when your first starting out is to figure out how to fund your deals. I have taken the best ways that I personally use to get funds and hope to pass it on to you so you can start benefiting as well.

Business Partnerships: 

One of the creative ways to fund your real estate deals until you can actually qualify for financing is through partnerships. Just remember, if you're partnering with someone; make sure you know who you're getting in partnership with. It's one thing to do a partnership on one deal and another thing to create a partnership where you're going to buy multiple deals.

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Even if you know the person you are going into business with, treat each transaction as a separate partnership and only go in partnership with them per transaction because you never know what can happen.

Remember a partnership is like a marriage and you're tied to that person until you've dissolved that partnership or sold the property. It's always wise to partner with someone who has a talent or skill that compliments what you do.

Cash Partner: 

A cash partner is exactly what it sounds like. It's a partner that has and will be putting up their cash to fund the deal. You can structure the transaction and profits any way you want. You could split 50/50 or you could offer your partner the first 1020% of the profit.

Credit Partner: 

A credit partner may not have any cash but they have good credit and can qualify for a loan to fund the property. These are easier to find than cash partners. If you use a credit partner just remember that you may have to put the property in the partners name in order to get the loan. I suggest that you know them very well or have a good agreement in place prior to.

Hard Money/Rehab Loans: 

"Hard Money" loans or "rehab loans" refer to non-conventional real estate loans. They're usually funded by private money sources and specialty lenders. Interest rates and points on such loans are usually higher.

Terms usually range from 3 to 12 months.

Hard Money loans have one basic requirement. There has to be some substantial equity in the property to give the lender a reason to invest their funds in an otherwise risky venture.

Seller Financing: 

Another good source to fund your deals is to get the seller to finance it. This won't work all of the time as it takes a special situation to work. One of the things you always want to ask the seller is "what will you do if you don't sell the property?" If they say rent it then it's a good seller finance possibility.