How To Get an Investment Property Loan

Purchasing a property to rent or fix-and-flip is a wonderful investment choice. Like any investment, the venture offers great potential risk and reward. Choosing a solid property for investment is an arduous task by itself, but what about finding financing for it? How do you go about the process? With a little preparation, consideration, and ideation, real estate investors have numerous options in reach. Investment property financing appears in several forms with different criteria.

If you’re wondering which option is most viable for yourself and your financial circumstances, don’t fret. We’re here to explain the details of how to get an investment property loan that meets your needs and desires. Here’s what you need to know.

Banks and Financial Institutions: Conventional Loans

Those who already own a personal, primary residence will be familiar with conventional lending. This type of lending is a standard approach for many wondering how to get an investment property loan. That said, conventional loans are not one-size-fits-all. Lenders actively review a potential borrower’s assets and income alongside their personal credit lines and history to determine approval ability. If approved, these conditions will determine the interest rate applied to the mortgage. Do keep in mind the typical 30 percent of funding for the required down-payment.

HELOC: Home Equity Loans

Tapping into a home equity line of credit is another possible option to secure investment properties for long-term renting or flipping. However, the standards for lending on investment properties have been tightening over the years. Depending on the exact loan, this approach has its true pros and cons. Many real estate investors find the qualifying criteria rigid, as home equity lenders focus on affirming one’s ability to repay. Those who choose to go this route must know their requirements, maintain a high credit score, build up cash reserves, and be mindful of increased interest rates before taking the leap.

Private Lending: Hard Money Loans

Alternative financing prospects are private money loans. Within the realm of private lending, hard money loans are suitable for real estate investment properties. With hard money, borrowers secure loans based on the asset of the property itself. The ultimate upside to utilizing this form of financing to get an investment property is the less rigid qualifications. While borrower credit and income are loan considerations, the priority lies within the profitability of the selected property. Making a wise initial choice can help secure the necessary funding for future investment gains.

For a private loan for an investment property in Orange County, turn to Val-Chris Investments. We provide quality private loans for borrowers with flexible requirements and conditions. Our hard money investment property loan terms are an ideal alternative from standard terms to achieve your goal. No matter your financial situation or the type of investment property in question, we’re here to help uncover the best private loan for your needs as a borrower. Get in touch to learn more or start the application process today.

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