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Why You Should Choose a Specialized Real Estate Lender over a Bank for Your Investment Funding

As many real estate investors know, it’s hard to pass up a great deal and opportunity for profit when you see it. A great price on a fixer-upper in a prime neighborhood or even a fantastic apartment building with lots of potential could be the key to your financial independence. If you’re looking for funding for your next investment, it’s best to avoid banks and traditional lenders and instead choose a lender that specializes in real estate investing. Here’s why. 

The Money Aspect of Real Estate Investing is Complicated

It might seem like your bank is a great place to take out a loan for a real estate investment opportunity. After all, they funded your mortgage, so why wouldn’t they be willing to finance your investment property, too? Believe it or not, this is all a bit too complicated for many major banks to handle, and they use the same criteria to qualify you for an investment loan as they used to qualify you for your mortgage. This means that no matter how great your found investment might appear, if you don’t qualify for the loan due to the bank’s criteria, they’ll still turn you down. 

Specialized Lenders Know Real Estate Investing

Though there are some exceptions and some banks truly do understand the complexities involved in real estate investing, it’s always best to seek a highly specialized lender for large loans like this. These days, you can find real estate investment companies that not only manage their own properties, but also provide funding for new and experienced investors alike. Rather than focusing solely on your income or your debt-to-income ratio, these lenders look at the actual property and the potential for you to turn a profit, then qualify you for your loan based on that information, too. In fact, these lenders often qualify people for loans who have been denied multiple times by their own personal banks and lenders. 

They Work with You to Find the Best Rates and Terms

When you choose to borrow from a specialized real estate investment lender, you can also rest comfortably in the knowledge that they understand how and when things might sometimes go wrong. For example, if the pandemic prevents your plumbing crew from showing up on time, which in turn pushes back your sale, they are far more likely to work with you and help you find the best way to proceed. Rather than simply being your all-or-nothing lender, they serve as your partner and provide you with more than just funds. They also provide you with knowledge, resources, and expert advice to make your investment experiences as smooth and as profitable as possible

Banks and other financiers certainly play an important role in many peoples’ lives. Banks are the number one provider of mortgages across the country, and independent financiers can provide personal loans for emergencies, large purchases, and more. Only real estate investment lenders truly understand how complex the industry can be, though, so if your bank says no, they may still say yes.

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