Where do I find cash to buy Foreclosures?
You might be surprised to know that there are several sources of investment capital available for funding foreclosure deals. These sources fall into four main categories:
- Conventional financing
- Partners who will supply cash to invest
- Lines of credit from a variety of sources, and
- Hard money lenders
You can obtain conventional financing from any number of commercial banks and mortgage companies. This type of source can be very cost effective, providing you have good credit. Many buyers of foreclosed properties use conventional financing to fund their purchase. Conventional financing sources would be the same sources you would use if you were buying a non-foreclosure property. Try your local bank or mortgage broker because both of these sources should have competitive rates and terms.
Partners are individuals, including friends, relatives, and other investors, who would be interested in providing some or all of the money in exchange for a percentage of the profits you will make when the property is resold. You can advertise by word of mouth, via the Internet, or in local newspapers. You can use existing lines of credit from home equity loans against your own property or from credit cards to fund your deals when you are first beginning.
You can also use hard money lenders who are in the business of providing loans for real estate deals. These sources require you to make monthly payments on the loan until you sell the property and pay off the balance. Check local sources, including the newspapers, for ads from hard money lenders and investor-partners, or consider advertising your interest in meeting such persons for the purpose of making foreclosure investments. Read more inside our Members Section
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