There’s plenty of legroom when it comes to rental loans, especially the down payment part. As an investor, you may be tight with funds or unwilling to spend more than the bare minimum on rental real estate financing.
The following are some ways through which you could buy rental property with little or no money to put down.
1. Borrow Informally
For beginner investors, down payments are all but unavoidable. If you’re one of them and don’t have sufficient capital to put down, all you have to do is turn to the people in close proximity. You can get acquaintances, like extended family, friends, and colleagues, to agree on a lower interest rate and lenient terms on repaying the down payment.
However, be sure to seal the deal with an IOU to cover the bases for both parties. Set out some degree of formality in case you’re unable to pay off an installment or the lender does something to intentionally or unintentionally violate your rights. Personal relations aside, be sure to protect both parties in the agreement.
2. Let-Out Some of Your Property
House hacking is the practice of listing rooms in a multifamily property, or portions in a single-family home, such as a guestroom, living area, or a repurposed broom closet.
Having an alternate income of this nature significantly improves your chances of having a loan approved without a down payment. Moreover, you can take a surefire approach by starting this side-venture to save up for a down payment.
3. Hard Money Loans
Hard money lenders follow less stringent vetting criteria as compared to conventional lenders. They don’t look at the borrower’s history, credit score, or cashflow because they have the first lien on the collateral. Therefore, these lenders will look at the collateral’s value instead of assessing the borrower’s financial position.
The application process for a hard money loan is much simpler and offers a much shorter repayment duration, meaning a lower overall interest on installments.
4. Private Hard Money Loans
Unlike conventional hard money lenders, private lenders like ourselves look beyond the collateral when evaluating the capacity of a borrower to pay back a loan. For example, they may look at the financial history of the applicant.
They’re also more flexible with their application process, with fewer bureaucratic hurdles for the borrower to go through in closing a loan. Instead of ticking a preexisting checklist, private lenders look at each case individually and try their best to align the loan structure with the borrower’s needs and lower the risks on their end by underwriting them financially.
Request Swift Private Money Loans for Real Estate Online
All you have to do is fill out an application form that’ll give us a fair idea of where you currently stand and wait for us to respond with an offer of our own. We’ll make sure to minimize the paperwork and get you that loan as quickly as possible.
For inquiries, write to our private hard money lenders.