Real Estate Investment Financing For Investment Properties

Jeff Lindikoff discusses real estate investment financing in this short Q & A:

What can you tell us about real estate investment financing for the properties that we offer on RealEstateIO.com?

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Sure. There’s a lot of um…a lot of…false…thought (misinformation)…when it comes to financing investment property.

People are hearing out there that there is no financing available.

We have financed several, several investors throughout the last 12 months.  That didn’t even think they could even get financing. So that….there is financing available for investors. Banks are loaning on Real Estate.

It is more challenging now than it was in ’05 when everybody could get a loan if they had a pulse and a bank account and a social security number. It’s much more challenging but there are banks still loaning money on investment property.

Real Estate Investment Financing: Programs Available For Those Who Can’t Qualify

We do have great programs on some properties that when people cannot get financing on through a bank. We can get them financed through a private channel: Through seller financing. Now something to keep in mind with seller financing, you pay a little bit higher interest rate but the properties are cash flowing beautifully. So again it’s how you buy the property, the price you’re buying, the interest rate can vary but it’s the cash flow and your return on your investment.

In ’05, a 10% return on investment was unheard of. Now with owner terms you can get greater than a 10% return….much greater than a 10% return. And so, don’t let that, the higher interest owner financing throw you off too much.

Real Estate Investment Financing: Owner Financing Reduces Buyers Risk Dramatically

The other thing to keep in mind when you’re working with owner financing, the seller, the owner is taking a huge risk. Most people, when they sell a property, they don’t want to have anything to do with it. They want to wash their hands clean of the property.

When you have the seller offering financing, something to understand is that those properties are pretty darn good properties cause they’re taking the risk of default, the borrower defaulting and foreclosing on that property.

That means they have to take the property back. In my…in my world, that’s a gem of a property if the seller is offering terms like that….if they’re willing to take that risk the property has to be in a good area for them to want to have it back.

So it’s a risk that they are taking and it’s a risk that the buyer needs to take a look at. If it’s a risk for the seller it’s good for the buyer.

Now for what you’ve seen from seller financing, how much down do they usually ask for?

Oh, we’ve seen it from anywhere from about 30% to 50% down and we’ve seen interest rates anywhere from 7% to about 12%….averaging to about 8%.

You know…and investors shouldn’t let that….”well, the banks are offering 4% why would I pay 8%?” but you may not qualify for the 4% at the bank but you’re still able to buy at 8% interest rate through an owner and probably still cash flow $300  a month.

That’s a darn good investment. It’s going to be an even better investment a few years down the road when you can go to a bank and refinance…and do even greater cash flow.

Getting Real Estate Investment Financing Is Still Possible

If you’re interested in finding out more about real estate investment financing or still have questions about real estate investing you can get in touch with Jeff Lindikoff directly at (541)537-2042.

Keep in mind that many of our rare real estate investment opportunities are sold within 24-48 hours time as soon as we make them available. Call Jeff to be added to the notification list for new real estate investment deals as soon as they become available.

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