Financing is a major part of your real estate investing business and can take on many different forms, including bank loans, discount notes and mortgages, equity loans, exchanges, government grants and loans, lease options, owner financing, partners, and private money. It is important to understand the financing options available as well as how to create a strategy for each one.

Your business plan and financial plan play a critical role in implementing your financial strategies. For example, when applying for a bank loan, you must do your homework and find out what documents the bank requires before you actually apply for the loan. Then you want to make sure that your application is detailed, organized, and presents a clear picture of your ability to repay the loan. All banks want to lend money, so it is your job to have a professional loan application package when applying for any type of loan for your business.

Government grants and loans also require homework to make sure the necessary paperwork is completed to the exact requirements. This process is usually tedious and time consuming, but the payoff can often be substantial.

Other forms of financing include owner financing and discount notes and mortgages. These work best for properties with long-term seller financing where the properties have substantial equity and can often be converted into purchase money loans. Understanding exchanges gives you another financial strategy to capitalize on that many investors don’t even think about, and Lease Options give you the strategy to buy real estate with little or no money down.

Other alternatives include finding a money partner or private moneylender. Financial partners are often investors who want to profit from real estate investing without being involved in the business. Private moneylenders are also looking to profit in real estate, and they focus on the value of the property instead of the creditworthiness of the borrower.

With so many financing strategies, where do you begin? The first step is learning what the strategies are and when and how to use them. A Creative Real Estate Financing class will give you that knowledge. With this financial knowledge, you’ll then have the ability to grow your business and meet your goals as a successful real estate investor.