Everyone with the slimmest slice of their peripherals on investment will have thought about delving into the world of property development. From the outside perspective, it looks like a dream; it looks like a pretty easy way to make money without much experience needed. All you need to do is buy an apartment or two, maybe a house in a student area, and, voila, you have all you need to make money, whether that be doing them up and selling them on or renting them out.
However, the reality is slightly different, by which we mean, you will find the first hurdle the hardest to clamber over. Mmm hmmm, we’re talking about getting the capital to buy a property or piece of land in the first place. If you have the money outright, then swell. But if you don’t have enough, then you need to know your options in order to be in a stable position.
So, let’s rock and roll should we:
- Commercial Mortgage
The clue is in the title for this one – they are for people or businesses looking to get into property development from a strictly commercial point of view. We’re talking about shops, warehouses, offices and anything else that falls under that bell curve. The way these mortgages differ from normal mortgages is you can spread the cost out over a much longer period of time, which makes it much more affordable. Of course, it is much easier to go down this route if you have a good track record as a business or investor.
- Construction Lending
If you are looking to develop real estate, as opposed to buying somewhere, then you might want to speak to someone like EquifyLLC.com who specialise in meeting the financial needs for any phase of a construction project. It is a lending service that is starting to grow in stature as a result of one overruling construction need: those who need to build, need land to build on, which requires its own kind of financing in the first place.
- Auction Sales
Another largely untapped resource for bargain buys are property auctions, and a big part of why this is still untapped is because a lot of people don’t know what to do or think they are unsafe ways of getting into the game. Our advice: use a professional service to help you out. That way you won’t a) end up missing out on a great opportunity or b) buying a property that will turn out to be a poor investment. The good news is, there are plenty of lenders that specialise in auction financing, which is necessary because, once you’ve won at auction, you have 28 days to cough up the cash.
- Bridging Loans
One of the most common disasters in the property development game is running out of cash during a process. That’s where bridging loans swoop in to save the day. They’re short-term funding options that are designed to help cover the additional costs, plug a gap in finance or just help you do a remodelling gig on a part of your property.