Finance New Investment Purchases with Investment Real Estate Loans

Multifamily apartment financing
An example of an excellent investment property purchase, a 6 unit apartment complex on a college campus.

Many real estate investors who can’t claim good credit or consistent income, don’t qualify at the bank. These investors have been using investment real estate loans to finance acquisitions of investment properties. These investment real estate loans have low or no credit requirements.  The application process is fairly straightforward, with little hassle. Some banks will require every piece of paper imaginable before they will even give you a preliminary approval! Borrowers can find out if they qualify for investment real estate loans much faster than bank loans.

But who is making these kinds of loans, these investment real estate loans? It’s the private money and hard money lenders that are leading the way in this particular niche of lending. Many banks have tapered off their investment real estate loans in recent years, thus creating more demand for these types of loans. Real estate investors who have had problems in the past obtaining loans, can quickly and easily obtain loans from private money lenders. With a ton of distressed real estate available after 2008, many real estate investors used investment real estate loans to buy these properties at deeply discounted prices. Without these loans being made available, most of these opportunities would have been wasted.

The requirements of investment real estate loans are typically based on the property itself that is being used as collateral. Where is the property? What are the characteristics of the property? These are elements about the loan request that are of highest importance to a real estate lender. A potential borrower should provide photos of the property, and any pertinent financials about rental income, property expenses, etc. If the property needs tenant improvements or repairs, a borrower should be prepared to provide a list of repairs or improvements to be completed with a cost next to each. In the initial application stage, a bonified bid from a contractor is not necessary if the borrower is experienced enough to know an estimate of work to be completed on the property. However, this will be a requirement of the loan to close, so borrower’s should obtain a bid from a contractor if a preliminary approval is provided by the lender.

If you’ve never used investment real estate loans to finance your investment purchases, take a look at our ‘Hard Money 101’ section here:

Or for information about our investment real estate loans, click here:

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Corey Curwick Dutton, MBA Park City, Utah

About the author

Corey Curwick Dutton, MBA Park City, Utah - 2005 MBA Graduate with 10 years experience in Business Management including International Management. Corey is a Private Money Lender and Loan Officer. In her spare time Corey enjoys writing on topics in the private money lending industry. She also enjoys hobbies such as mountain biking and skiing in the great outdoors of Utah.