Creative Financing: Tips and Tricks of the Trade
by: JamesL.Hardcastle |
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If you live in Australia yourself, particularly Victoria, it is hard to be unaware of the boom in property investment which is currently underway. Even if you live on another continent, you may well be aware of this situation. Regardless of where you are, the time to invest in Australian property is now.
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
There are three things you need to know in order to get started. If you really want to be a successful property investor and increase your portfolio you need to be educated on the many different financing techniques available to you. You need to know what these techniques are and have a few examples explained to you. Then you need to know how to find the right independent financial investor who can provide tailored service and advice.
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.
The aim of using these creative financing techniques is to aid you in purchasing properties when either the investor doesn't have enough capital of their own to invest, or they don't want to use their own funds. This type of financing is sometimes known as leveraging other peoples money.
Creative Financing Techniques:
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.
Can determine which lender will view your unique situation in a favourable light.
They can save you a lot of time by doing the research for you.
They will investigate the available options and help you to find the best one for you.
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.
They can offer you offer personalised service.
They can show you techniques which will save you a lot of money in the long run.
Using the services of an independent financial advisor can give you access to resources which the lenders won't tell you about. These creative financing techniques can have you quickly adding to your investment portfolio.
So if you really want to capitalise on the property investment boom in Australia and you need to know how you could finance your investments, consulting a financial advisor and searching out creative investment ideas will aid you in increasing your investments . Just imagine, you can go from owning just 2 properties to owning up to 20 or more inside of 2 to 5 years.
About the Author
Author: James L. Hardcastle reveals hidden tricks about buying multiple Australian properties on the website where he explains valuable information about property investing in Australia.
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