Funding options for buying property in the USA

When buying property in the USA, there are many options that will get you into the investment game ... photo by CC user John Phelan on wikimedia

With the bad memories of the crash in 2008 fading and optimism returning to the streets of America, those that have been diligently saving since then are starting to get interested in real estate again.

If you find yourself in this situation, and want to do something better with your cash then have it sit around collecting 0.25% interest in a savings account, then you might want to get back into the USA property market.

If this sounds exciting to you, here are three different ways you can get funding to buy investment properties in the USA…

1) Get it from private money sources (relatives, friends, fellow investors)

Sometimes, it is as easy as reaching out to people within your personal network when it comes to securing financing for a real estate deal you wish to complete.

You might be able to convince your parents, relatives or siblings of the financial viability of the properties you plan on purchasing, but if that falls through, there are plenty of people with a few degrees of your friends and family that have the capital you need, and are actively on the outlook for great deals in which to put their unemployed cash to good use.

Talk to everybody you know and let them know of your desire for buying property in the USA, and you just might find someone that is able to help you.

2) Use funds contained within a self-directed IRA or 401(k)

Saved up a decent wad of cash in a 401 (k) or in a self-directed IRA? In many of these funds, you aren’t just limited to investing it in stocks or bonds, as they may give you the option of using it to fund a down payment on a property. Some also allow you to use your IRA/401(k) to pay for repairs as well, and once you have tenants in the home, you can set things up so that their rent money flows directly into your retirement accounts.

3) Use your home as leverage to fund a down payment on an investment property

Already own a principle residence, but looking to obtain additional properties so you can get into the investment real estate game? There are a couple of ways that you can take advantage of this situation, the first of which involves re-financing your current mortgage to obtain the required capital to make a down payment on your first rental home.

If your home has appreciated in value since you purchased it, this will work out nicely, but if you bought in before the crash of 2008 and have yet to recover, taking out a line of credit from your bank is an option that might be open to you.

So long as you have a good credit history, not only will you get the cash you need, but the interest rate on the line will be far lower than what hard money lenders offer, enabling you to hit the ground running in real estate without getting hammered by double digit rates that the latter vendors extract from their clients.