Secure A Real Estate Investment Loan & Create Your Own Blueprint For Success

A real estate investment loan is somewhat different than a conventional loan simply because the property will not be used as a primary residence. As the buyer, what does that mean for you? In short, it may mean a larger down payment, shorter loan term and the possible requirement of collateral.

Once you locate a property, whether it be raw land or a home, your first step is to make sure that the price is reasonable. In order to accomplish this, you will need to hire an inspector and possibly even an appraiser to evaluate the property.

This information will be helpful when you apply for a real estate investment loan and, depending on the results, may even entice the lender to approve the application.

The process of having an inspection and appraisal completed may take some time, which means the property owner may require an earnest deposit from you in order to hold the property while you procure the findings and an investment loan.

When it comes to the actual loan process, lenders often require a larger down payment for raw land or other investment properties. Depending on the lender, you may be required to pay a minimum of 35% of the purchase price as the down payment. This means that you would need at least $3,500 for a property priced at $10,000.

Although the down payment is larger and it may be somewhat difficult to work it into your current budget, the end result is a shorter loan term and less interest paid over the life of the loan. A typical real estate investment loan is payable for 3-8 years depending on the lender policies, the buyer’s finances and the property itself.

A real estate investment loan is a terrific way to build or add to your portfolio, but what happens if a potential lender denies your application?

There are several options that you may use to help improve your chances of getting an approval for an investment loan, including being able to provide additional collateral to secure the loan. In some instances, this may be the deed to another property or the title to an automobile.

This may sound unique, but lenders are more likely to approve a real estate investment loan if they have absolutely zero chance of losing their money. One of the best ways to ensure this goal is to secure enough collateral to cover the purchase price of the new property.

As you begin to repay your real estate investment loan, your property should begin to appreciate and you will build equity very quickly. Once the loan is paid in full, you will be able to either sell or retain the property for future growth potential. When it comes to investing in real estate, an informed buyer is a wealthy one.


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