How to get a real estate loan

I am looking for deals in real estate. So can anyone suggest some tips for financing investment property. Thanks in advance.

This is a good time for real estate investment. You can get finance loan using traditional route such as banks, home mortgage companies, credit unions etc. This is a great way to finance real estate investment. Another way is seller second means seller provides a second mortgage. Finally, If you can not find way for financing then you can use lease option.

I use seller financing, private investor funds, and lease purchases. With these sources, one could buy more property than they ever want to own. Incidentally, there are some 7 trillion dollars sitting in retirement accounts such as IRAs, Pensions, Profit Sharings, etc. With a self directed plan, those funds could be sourced for private investor financing to buy your properties.

Hope this helps.


Here are a couple other suggestions:

Pursue loans from out of the area banks.
Sometimes local banks can be very finicky about property investments. If you take the profit from the other two properties and accumulate at least a 20% down payment for a third property, you may have options from other online lenders.

Also, try financing for 15 years rather than 30 if you have not already done so. This is more appealing to lenders and in then end you will pay substantially less in interest.

Look into land contracts.
Much will depend on how active your market is. If there is a long holding period before a house sells, approach the owner and see if you can buy it on a land contract. The interest rate will be several percentages higher than a bank loan but it makes for a nice easy purchase.

Then after 3 - 5 years you will need to make a payment in full. By then you could qualify for a loan and wrap all your properties into one.

If the seller is in a pre-foreclosure, foreclosure or short sale position, you may want to contact their lender and see if you would qualify to assume the mortgage or “refinance”.

Hi Alice,
The type of loan you can get depends a lot on what you are going to do with the property. If you can’t get conventional financing as suggested above, a private money lender may be able to provide the funds. Private money (hard money loans) are most suitable for fix and flip situations.

Also, many people don’t realize you can invest in real estate out of your own retirement account with a self directed IRA. If you have a traditional 401K now, you may be able to roll over the funds into a self directed account. If that is not possible due to your employer rules, you can borrow against your 401K as well.


George Krajacic

The advice you are getting here are great. :slight_smile: Let me just one more. If possible, pay at least 25% downpayment to get a better interest rate. If this is not possible, you try the smaller banks in your neighborhood, they usually have reasonable deals when it comes to interests.

You go to a bank or mortgage broker and apply. The real estate itself is the collateral.

Doesn’t the fact that you have to pay a 20% down payment get in the way of this?

Also, is 100% owner financing something that you find regularly?

Please explain more…