As a real estate investor just starting out, you might be at a disadvantage at first, not knowing what your options for financing are or where to start. You basically have two options available to you: bank loans and private loans. The process of getting financing through a private lender is unique in that there are many more ways to do it other than just going into a lending institution and filling out the paperwork. Here are some of the different loan options that might be available and how to approach each one.

Peer to Peer Lending

There are a lot of peer to peer lending resources available online. Peer to peer lending has changed dramatically over the years, particularly with the help of the internet. The internet has made it even easier to find peers with funding through massive banks of potential financiers that believe in your cause and ideas.

Crowdfunding

Crowdfunding is a bit more complicated than just posting a blurb about your real estate opportunity online and sharing the link to your crowdfunding site across social media. There are many things that you should do to prepare before you even get your crowdfunding site set up. Among other things, you will want to have your business entity set up, your accounting procedures in order, and get a qualified CPA on board.

Family and Friends

Asking family and friends for money for your business may not be easy. However, there are ways to approach this resource for private lending as well as some vital preparation tips that you can take ahead of time to make this a potentially lucrative resource. Although possibly daunting at first, working with the people you know for financing might be some of the biggest sources of support, both financial and otherwise, that you have available to you.

Specialized Private Lenders

Although when you hear about private loans, you usually think of these other three options, private lending companies exist and do have a lot of merit. The majority of private loans are acquired through existing business relationships, and so when you are seeking financing for a real estate opportunity, be sure to look to your existing network. You never know when a network connection is going to help lead you to the financing you need or put you in touch with someone who can help you.

Fortunately, when you need money for a real estate transaction, there are lots of ways that you can get the financing you need without ever stepping foot in an actual lending institution. Consider private loans for the financing you need and you may end up with more money quicker.