In real estate, creative financing is defined as non-traditional or uncommon ways of buying a property. This includes financing using a Hard Money Lender. Those who are just getting started in real estate will more than likely have more questions and concerns than someone who has investment experience. So, is it unwise for a first-time Real Estate Investor to use creative financing when they are just beginning their career? Should they just stick to a more traditional approach? The answer is no. Here’s why.
Whether you are using a traditional or non-traditional financing method for your property, you must first determine if the deal is worth buying. Then and only then, you should start to consider your options for financing it. If you move forward with a bad deal, you will experience issues and second guessing, no matter what type of financing you used to purchase the property. All investors want a good deal, so just because you found a great opportunity, doesn’t mean it will be available to you for very long. The availability and speed of funds that comes with using hard money loans is very helpful for investors and can make sure you close on your deal before another real estate investor does. Everyone wants to start their real estate career with a great deal, right?
Your first-time investment property could raise a lot of questions. Unlike traditional bank lenders, many hard money lenders have investment experience themselves. They could even potentially become mentors or close advisors to you, especially when you are first starting out. The founders of Easy Street Capital have flipped more than 2,500 homes in Texas and California, so they understand the adventure you are about to endure. Our team is familiar with the market and can provide their local expertise to make sure your project is a success. We recently sat down with one of our Houston borrowers (and first-time flipper) who claimed this was a major reason she wanted to move forward with a hard money loan. You can read her story here.
Another aspect of creative financing is moving forward with a partnership. Joining forces with a like-minded individual not only means less pressure of your shoulders, it brings the opportunity of multiplied knowledge, contacts, resources, and even capital. The moral support and the ability to talk through problems is another benefit, especially to someone who is new to the experience. Your first investment project might seem risky to some investors, but with a partnership both the reward and the risk is shared with both individuals. However, a bad partner can make or break your deal, so be sure to choose your teammate wisely. One of our DFW Borrowers completed his first flip project through a joint venture and had great things to say about his experience. Learn why his investment was so successful here.
There are many different types of creative financing that can help you reach your real estate goals. Just because you are just starting out, doesn’t mean these methods are out of the question. Are you just starting out and want to learn more about hard money loans? Contact us today!