If investing in a property is something you want to do, then there are things that you need to think about and make sure to do. This way you are as prepared as you possibly can be. One good step to start with is to ensure you have a sizable down payment. Mortgage insurance does not cover investment properties, thus you need at least 20% down in order to secure traditional financing. Without a down payment, you can try to get a second mortgage on the property, but this is very difficult.
Another good thing to do is to ask for owner financing. In the past, this used to cause sellers to feel suspicious of potential buyers. This is because anyone could qualify to get a bank loan, however it’s more acceptable these days because of the tightening of credit. If you go down this path, you should make sure you have a plan. Make sure to present your plan for payments to ease the seller’s fears.
Make sure to think smart. When looking at a property that has a good chance of making a profit, think about getting a down payment or renovation money through home equity lines of credit. This can be from credit cards or in some cases life insurance policies. However, always make sure to research this before going through with any plan to ensure you are willing to take the risks that come with it.
Financing for purchase of the property could be possible via private loans from lending companies. These companies connect investors with individual lenders. Just keep in mind that if you are new to this, and don’t have much of an investment history yet, you may be met with some doubt. Your credit may also need to meet a certain standard as well, so just make sure to be as prepared as you can!