How to Find 100% Financing of Investment Property in a Bad Economy

For several years it was easy to find 100% financing of investment property. Just go to a bank and get an 80/20 no doc loan. You didn't need great credit, you didn't need cash and the investment didn't have to make sense.

But the credit crisis of 2008 forced the banks to pull back from their loose lending practices. Now most require 25% down payments when you are trying to buy rental property - if you can get a loan at all. Many would be investors seem locked out of the market at a time when foreclosures are creating many buying opportunities.

So what should you do? Well, some obvious points are:

* save money for a down payment
* improve your credit score

In bad economic times cash is king. Those with the cash are going to get the best deals. Period. But you can still buy investment rental property even if you don't have a lot of cash. (Though to be fair - you need cash once you own the property to handle vacancies, repairs, etc.)

One of the best actions you can take is to develop a good relationship with a small local bank. It was the big banks that were the most out of control (CountryWide, Bank of America, etc.). Many small local banks kept their heads on during the buildup of the real estate bubble and are in a good shape to loan money.

There are several alternatives to banks when it comes to getting 100% financing for investment property. The most obvious is seller financing. Now this won't work if the owner is a bank, but is a great way to find a win-win solution to the problems that sellers are having unloading their houses. And generally, a seller is not going to look too closely at where you are getting a down payment from.

If you have a good relationship with a local bank that knows local real estate values you also might be able to use the seller to carry the down payment as a second mortgage. The big banks are more likely to want you to have some "skin in the game".

If you are buying a property that needs a lot of rehab, the best option might be a hard money loan. Although hard money lenders now run credit checks, if you have some experience in real estate you can find this type of lender. If you are going to flip real estate and can get a deal that will sell quickly after making repairs, the higher fees and interest rates won't be a big impediment to using a hard money lender. A hard money lender will lend you money for the purchase and renovations.

You might have heard the term "private money lender" in your search for 100% financing of investment property. These are people that have either lots of cash or a self-directed IRA. With a self-directed IRA an investor can be a bank for you. He or she might be willing to lend you the money and give you a share in the property in exchange for a portion of the ownership.

For two of the best ideas of how to finance investment property with little or no money down see 100% Financing of Investment Property.

Is Real Estate the Best Investment in Today's Economy?

A good investment means security and stability in the future. People should know where to put their hard-earned money to be able to secure financial stability despite trying times. Investment, by definition is taking current resources and putting it somewhere else that may be beneficial in the near future. Everyone should be aware of the risks they need to take when investing their money. Some choose to invest in more tangible assets, such as jewellery, designer bags, cars, and the like.

Real estate investment is not something that everyone understands. There are a lot of seemingly complicated details when it comes to investing in real estate. However, there are glaring benefits why real estate can be considered a good investment. For one, investing in real estate is almost guaranteed appreciation. When you buy a house, for instance, your invested money is almost guaranteed to become bigger through time. It is also a great weapon against inflation. Real estate does not suffer the highs and lows of economic trends as much. Being a long term investment, it is a good source of stability. Another reason why it is a good investment is that real estate is a basic necessity. Just like food and water, everyone needs a place to live in. Buying a house is always the better choice than renting. Renting may seem more economical, but in the long run, owning a piece of property is still the best choice. Investing in more than one property will give you the competitive edge to dictate the prices on which you want to sell or lease your property in the near future. There are also tax advantages when buying condominium units, apartments, and houses. Long term appreciation is another convincing reason to think of investing in real estate. Buying a property in a good location will certainly prove to be beneficial. Renting out your properties to commercial establishments will earn you the money you invested eventually.

There is such a thing as pre-selling. This means that property developers sell the property significantly lower than its value as compared to when the project is finished. Buying during pre-selling almost guarantees bigger long term returns. Since the buyer is buying at a lower price, in time, his money will become bigger. However, one has to be wary of the reputation of the developer. It is important to do background research on the developers' portfolio. Before being hooked on the low price, make sure that the project will be finished as promised. Location is also very crucial in real estate investment. Research on the location of your target property. Developers usually know what kind of "environment" their properties lie on in the coming years. Do extensive research on the plans for the area in the next years. Remember, a good location means a more guaranteed high long term appreciation. When a property lies in a place that has a high commercial potential, buyers and businessmen will be more interested in your property.

Real estate is considered by many as a high-risk investment. However, long term returns prove to be worth it when properties are handled properly.