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4 Alternative Funding Ideas to Start Your Real Estate Journey

Marathon Real Estate Investor Shaking Hands to Close a DealThinking about investing in single-family Marathon rental homes but don’t have cash? Don’t worry — it’s not just you. There are, however, many different ways to invest in rental real estate, even if you are a bit short on funds. You can still fund an investment property even if you don’t have all the cash. You just need to look for other ways to get that money. Through one or more of the approaches listed below, you may be able to own rental real estate, even when you don’t have all the cash ready.

1. Buy a Primary Residence

If you want to get started on your dream rental property, it is a very wise choice to first buy a house for yourself. Unlike loans for investment properties, there are many different programs designed to help first-time or other homebuyers purchase a home. Down payment requirements tend to be lower, and interest rates are often much more favorable for owner-occupied properties. It is not uncommon for many rental property owners to purchase a house for themselves, which they then eventually convert into a rental, This is a great way to kick things off as it can be the start of your own investment portfolio.

2. Buy a Duplex

Another great option would be buying a duplex. The wisdom behind going for a duplex is that you can avail of the same programs offered to owner-occupied properties, and you can rent out the other unit. However, it is understood that you will have to share a home with a renter. But the upside is that you will be collecting rent that may nearly cover your mortgage payment, reducing your living expenses and allowing you to save up for your next investment purchase.

3. Open a HELOC

There are other options available, especially if you prefer not to be in the same home as your renter. This is why you can choose to open a home equity line of credit (HELOC) on your residential property. If your property values have increased over time, you could potentially use the amount in equity to borrow as a means to buy an investment property. Just remember, lenders will only go as high as 80% of your home’s value. Hence, keep a close watch on your property values, and keep yourself updated on the actual equity that’s built up.

4. Reduce Closing Costs

So you have your down payment on hand. But, what about other expenses like closing costs? If you don’t have the budget for that, you can try to ask your seller or lender to cover for you. There are lenders who offer rebates to try and minimize the total cash amount needed for closing. If you’re lucky, the seller just might be willing to cover the closing costs to seal the deal.

Owning a portfolio of single-family rental homes doesn’t have to be just a dream. It can be a reality for you, if only you put yourself out there. Our professional Marathon property managers can help! We work with rental property investors, from beginning to experienced, to help assess prospective rental properties, locate off-market deals, and offer expert advice on everything from rental rates to marketing (and beyond). Contact us online to learn more.

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