Increase Your Investment Portfolio With Creative Financing

Posted by James L. Hardcastle

September 5, 2008

by James L. Hardcastle

If you live in Australia, particularly Victoria, perhaps you have noticed the investment boom around you. Perhaps you live on another continent but have overheard discussions of the housing boom and property investment opportunities. Either way you likely want to cash in on the deal while it’s still growing, otherwise you wouldn’t be here reading this article.

If you are serious about cashing in on the property investment boom and quickly, then you are likely looking for creative ways to invest in multiple properties. Perhaps you know a few. However, by utilising multiple sources you can go from investing in two properties to having an investment portfolio of 20 or more properties. How?

Creative Financing

There are three things you need to know in order to get started. If you really want to be a successful property investor and increase your portfolio you need to be educated on the many different financing techniques available to you. You need to know what these techniques are and have a few examples explained to you. Then you need to know how to find the right independent financial investor who can provide tailored service and advice.

In order to be successful in property investment and increase your portfolio significantly, creative financing techniques need to be used. Creative financing is a term used by real-estate investors and it refers to non-traditional real-estate financing techniques. These techniques are not commonly used.

Creative financing can help you to buy properties even when you do not have (or are unwilling to use) your own capital to do so. One way of financing your investments is to leverage other people’s money to make your purchases.

Some Creative Financing Techniques:

Simultaneous Closing: This gives the seller financing without having to actually take out a mortgage. At the time of closing, the title is handed over to the new buyer and at the same time, the mortgage is sold to a note investor as a cash sale.

Subject-To: This method entails the buyer getting the title to the property in question without having to get a note at all. The seller keeps all of the current financing in place - meaning that the buyer needn’t pay for any transaction or loan fees. This process is similar to assuming a loan, but be aware that if this is done without the knowledge and consent of the lender it can violate the terms of the loan.

There are other creative financing techniques available, including - land trusts, private mortgages, hard money loans, owner carry back, seller seconds, credit partners, retirement accounts, 1031 exchanges and many more.

The services of an independent financial advisor can be invaluable here. These professionals can help you in a variety of ways:

They can asses your borrowing capacity.

An advisor has the insight into the lenders guidelines.

They will know which lenders to approach; ones who will view your request favourably.

They can save you much time by doing the necessary research for you.

Explores all the options that are available to you and can help present the right ones for you to choose from.

They can show you opportunities which you may not have been aware of.

Organise the loan process for you.

Look after your best interests and help you to avoid lending pitfalls.

Looks after you before and after the loan process.

Personalised service.

Techniques that can save you thousands of dollars in the long run.

Using the services of an independent financial advisor can give you access to resources which the lenders won’t tell you about. These creative financing techniques can have you quickly adding to your investment portfolio.

So if you really want to capitalise on the property investment boom in Australia and you need to know how you could finance your investments, consulting a financial advisor and searching out creative investment ideas will aid you in increasing your investments . Just imagine, you can go from owning just 2 properties to owning up to 20 or more inside of 2 to 5 years.

About the Author:

About the author: James L. Hardcastle is a professional from Loans Australia and they know everything when it comes to investing in properties and will give you advice regarding financing at Loans Australia.

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