Oct. 20, 2010

Waikiki Real Estate Financing Ideas

You may have heard a thing or two about creative real estate financing, but do those techniques actually work?  It can depend heavily on understanding how the principles actually work and where each technique has gone wrong in the past.  Here are some creative real estate investment methods for you to consider:

 

Borrow from hard money lenders.  Hard money lenders focus on high interest loans with short terms, and you can find these lenders online or through word of mouth.  You can use this method for buying Waikiki property quickly, fixing it up, and flipping it back for another quick sale.  Since interest is high, you have to work fast to make a profit from quick sales.

 

Retirement savings accounts.  You can work with tax lawyers to help you understand laws on how to borrow money from your own retirement savings plans in order to make real estate purchases in Waikiki.

 

No-documentation loans.  Loans that require no (or low) income or credit documentation can be found online through bank websites.  These loans may allow you to borrow up to 70% of the property price and then the other 30% can be made up by yourself, through personal loans, or even a loan from the seller.

 

Seller financing.  There are banks out there that will let you borrow 90% of a property value and let the seller take a 2nd mortgage form you for another 5% of the value.  This leaves you only 5% to come up with for the down payment on the property.

 

Note buyers for Waikiki real estate.  A seller who needs money quickly can arrange to buy a promissory note from a lender.  For example, a seller wants to sell you his property in Waikiki with no down payment for $100,000 so he can take 2 mortgages from you at $10,000 and $90,000, then arrange for a note buyer to give him $80,000 in cash to pay off the bigger loan.  Then you’re left to pay $10,000 each to the 2 note holders, which you could do instead of the down payment.

Leverage property.  You may have taken out a loan against your home’s equity and then not hard to use the money after all.  You can think about using it instead to pay the down payment on another property as an investment.  This will help you to use the bank’s money instead of your own to start your property investment.

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