Investment Property Funding Solutions
Real estate investment is a popular source of income for all types of people. Finding the right type of investment property funding is key to ensuring financial success in this venture. To generate profit through rental income or the future sale of a home, you’ll need to find flexible funding with great rates. Whether you’re considering investing in your first property or are a seasoned fix and flipper, Debbie Mishko at American Pacific Mortgage has solutions for you.
Short- and Long-Term Funding Options
Investment properties can be short- or long-term investments, depending on what you do with the home you purchase. To be considered an investment property, you must not live in the property either permanently or temporarily. There are all types of investment properties, including single- and multi-family homes, condominiums, and townhomes.
Short-term loans are used to purchase a residence that will be resold within a short amount of time with the hopes of making a profit. Commonly known as fix-and-flip homes, short-term property mortgages are used to purchase a home at the lowest-possible price, then renovate the property to increase its value for maximum profit. Also known as buy and hold loans, long-term investment financing helps clients purchase property that provides rental income over time.
These are some types of investment property funding to consider:
- Hard money loans – Hard money loans are approved using the value of the investment property as collateral, with minimal weight placed on the investor’s own financial standing. Hard money loans typically have high interest rates.
- Cash-out refinance – Cash-out refinance allows borrowers to receive cash in exchange for the equity they’ve built in a different property. This cash is then used to purchase a new investment property and/or for renovations to the property.
- Bridge loans – These are temporary loans used to “bridge” the gap between two real estate transactions. If a fix-and-flip investor has another property that will be sold soon, it can be used as collateral in some cases to secure a new loan to purchase another investment property. They have volatile interest rates and must be repaid quickly.
- Home-equity loans – If you have an existing property in which you’ve built a substantial amount equity, you can leverage it to obtain a new loan for an investment property. These loans are also known as second mortgages, which are piggybacked on top of the initial mortgage used to purchase the property.
- HELOC – like home-equity loans, HELOC is secured by the equity a borrower has built in a different property. HELOC stands for home-equity line of credit, because it provides the borrower access to a stream of cash as expenses to refurbish a home arise.
Discover Financing That is Tailored to Your Investment Needs
If you’d like to learn more about investment property funding, Debbie Mishko at American Pacific Mortgage is your home financing guide. Whether you’re interested in short- or long-term property investing in Gig Harbor, WA, we’ve got solutions to meet your needs. Contact us to get started today.