Creative Financing: Tips and Tricks of the Trade
If you happen to live in Australia, especially if you live in Victoria, you have probably seen an explosion of investment activity in your area. You may even live on the other side of the world and have still heard people talking about all of the property investment opportunities available in the area. No matter where you live, now is the time to get in on this market.
To make the most of these investment opportunities, you’ll need to be able to invest in many different properties. You might already know some ways to secure financing for this, at least on a smaller scale. However, if you can use several different creative financing techniques, you could increase the size of your portfolio; going from just a few properties to dozens - and creative financing is the way to do this.
Creative Financing
In order to get in on this market, you’re going to need to know a few important things. To really make the most of your opportunities on the Australian property market, you’ll have to learn about some of these creative financing techniques. I’ll go into a few of them in this article. You would be best off getting the advice of an independent financial advisor as well to ensure that you are getting some expert advice and personalised service.
To be a success in property investment, you’re going to need to employ creative financing techniques. Creative financing denotes non-traditional funding sources, in this case for real estate investments.
Creative financing can help you to buy properties even when you do not have (or are unwilling to use) your own capital to do so. One way of financing your investments is to leverage other people’s money to make your purchases.
Creative Financing Techniques Examples:
Simultaneous Closing: This gives the seller financing without having to actually take out a mortgage. At the time of closing, the title is handed over to the new buyer and at the same time, the mortgage is sold to a note investor as a cash sale.
Subject-To: This transaction is a creative finance technique in which a buyer is able to take the title of the property without procuring a note themselves. This involves the seller of the property leaving their existing financing in place then the buyer does not need to pay transaction costs or loan fees of any kind. This entire process is similar to assuming a loan. However, it occurs without the consent of the original lending institution and thereby violates the terms of the loan.
Many other creative financing techniques exist - land trusts, 1031 exchanges, retirement accounts, seller seconds, credit partners, private mortgages, hard money loans and more!
An independent financial advisor can assist you with their expert investment advice. These professionals can assist in many ways:
They can asses your borrowing capacity.
An advisor has the insight into the lenders guidelines.
They will have ideas to determine which lender will view your request favourably.
They can save you much time by doing the necessary research for you.
They will investigate the available options and help you to find the best course of action.
Provide a range of products and resources you may not be aware of.
Organise the loan process for you.
Look after your best interests and help you to avoid lending pitfalls.
Looks after you before and after the loan process.
Personalised service.
They can show you techniques which will save you thousands in the long run.
An independent financial advisor can grant you access to many options which lenders would happily keep you in the dark about. The creative financing techniques they can assist you with can quickly expand your property investment portfolio.
If you are serious about cashing in on the Australian property investment boom, you will need to learn about all of your financing options, consult with a financial advisor and look into creative financing techniques to ensure the healthy growth of your investment portfolio - just imagine going from owning a mere two properties to more than twenty in just a few years!
No comments yet.
Leave a comment
You must be logged in to post a comment.
