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Refinance 101 for Real Estate Investors

In these times, there are bound to be situations where you took on a mortgage or bought out some other type of debt in order to obtain a specific property for your investment portfolio. Depending on the situation, you may have very little equity in the property, and even less capital available to make needed repairs or attend other matters.

On the other side of the equation, if you could get out of this financial bottle neck, you would zero out all debts associated with the property and also make decent profit. Did you know that you can refinance these properties– even though you don’t have a buyer or large amounts of equity on hand?

How Does Investment Financing Work?

Basically, investment financing is a special type of loan available to those who purchase real estate with the intent of reselling for a profit. In most cases, you will probably sell the property within months of obtaining the loan, and then go on to make other sales and larger profits.

Here are some things you can do with this type of loan:

* Install energy efficient features that will attract savvy customers capable of getting a good sized mortgage

* Install security features that will make properties in sub-par neighborhoods more appealing

* Fix roofs, floors, foundations, or walls in need of repair

* Bring electrical, heating, sewage, and water systems up to code.

What is an Equity Lender?

An equity lender is a special type of investor that understands the equity value of your property isn’t based solely on tax value minus debts and liens. An equity lender may look at appraised value, as well as projected values if you carry out certain repairs on the property.

For example, an equity lender may be interested in a property with a tax value of $10,000 and $9,000 worth of debts (meaning only $1,000 worth of equity to a conventional bank); yet $5,000 in repairs would bump the property value up to 75,000 and attract several potential viable buyers in a short period of time.

While a bank would never lend you the money to make the repairs, an equity lender would consider it.

What Can I do With Development Funding?

Development loans are ideal for any real estate investor with property that can be turned into some type of business or apartment space. You can use these loans to redesign structures, or even build new ones in their place. As long as you know how to make a profit after the repairs are taken care of, a development loan will help you get through the spending phase with ease.

Today, it is becoming almost impossible to find real estate without some type of lien or other financial encumbrance attached to it. If you are serious about selling property and making a profit, then you will need to know where and how to get the best deals in finance loans.  Apply Now or call us 612-926-1111 and ask our agents for more information.

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