Investment capital is the money required to buy and hold, fix and flip, or build a real estate property. It involves the total costs of acquiring, holding, renovating, and selling a property. The current real estate market is booming in the US, and it’s the best time for investors to make money.
However, not having adequate financial capital is a primary concern for many. Funding a real estate investment can be tricky if you’re unable to balance your debt and equity. Thanks to reliable private money lenders like GCP Funds, you can now obtain easy and fast hard money real estate loans across Illinois.
In this article, we’ve shared the three most popular and rewarding ways to raise capital for your next real estate investment. So let’s get started.
1. Opt for Hard And Private Money Loans
The best way to raise sufficient investment capital is to seek a hard money lender’s assistance. These companies offer adept lenders who are experienced and well-versed in the real estate market trends.
At GCP Funds, you can apply for flexible money-raising solutions such as hard money for land acquisition, bridge loans, and construction financing in Illinois. The best part about private money lenders is that investors only need to have a strong assets rental income to get their loan application approved.
Hard money loans offer more security, high value against collateral, and flexible repayment terms. Based on your rapport and relationship with the lender, you may also enjoy additional benefits such as payment terms modifications and lower interest rates.
Traditional lenders such as banks and credit unions may take ten or more days to process one loan application, whereas a hard money lender’s processing speed is at least five times greater.
2. Try Peer-To-Peer Loans
P2P loans have also become quite popular in the real estate industry. However, they involve more stringent policies and terms, unlike hard money loans.
You can partner with other investors, real estate developers, and capital investors to fund your next real estate project. P2P loan operators can be found online or in physical real estate marketplaces.
While a P2P loan may be quicker than a traditional bank loan, it involves higher red tape, stricter payment guidelines, more interest, and less flexibility than hard money loans in Illinois.
3. Self-Directed IRA Accounts
Investors also tend to use their self-directed IRA accounts to raise capital for real estate investments. This strategy requires the account holder to transfer all the account holding capacity to the custodian.
This IRA custodian has the decision-making power to sell or limit asset movement. In some cases, investors may leverage the opportunity to draw money for real estate without a penalty. The profits, however, will not be obtained right away. Investors will receive the returns in their IRA account.
All in all, the best way to raise capital for real estate investments is to opt for hard money loans in Illinois. GCP Fund offers flexible hard money solutions across the US. They help you raise capital for capital selling, buying, and improvement projects while expediting overall profits.