It’s a fact that many new real estate investors purchase properties solely with cash. Commonly, this is because they have the money available and don’t want to deal with banks or other lenders. But, this is a sign that their investment kung fu is weak. They think that getting a loan to purchase real estate comes with extra costs and restrictions, and while they’re kind of right, that doesn’t mean that using a loan is necessarily a bad thing. There are costs involved with using loans for your real estate investments, but they are often greatly outweighed by other benefits – specifically, that of utilizing leverage.
It’s not always easy to get investment real estate financed. This is especially true for investors looking to purchase properties that aren’t in the best condition, or for people who have trouble borrowing from traditional lenders. Luckily, conventional mortgages aren’t the only options – there are a number of other great financing sources that wise investors use every single day to purchase real estate.