For most people, real estate probably represents a pretty large chunk of one's net worth. Buying a house usually requires a lot of cash and the investment is fairly illiquid. In June 2020, according to the National Association of Realtors (NAR), the blended average home price was greater than $295,000 in the United States. Considering the median net worth of American households is just under $122,000, buying a primary property can seem out of reach and buying an investment property can seem almost impossible.
Real Estate Financing describes the way homeowners secure funds to acquire a target property. There are a ton of different financing options but typically, they fall under one of two buckets:
This list won't be exhaustive but will include some of the common forms of debt financing for Real Estate Investors:
As with the debt financing section, this list will not be exhaustive but will include some common forms of equity financing.
Though Debt and Equity financing options are popular, they come with drawbacks.
Nophin is trailblazing a better option: Receivables-based financing for Property Investors. Receivables financing is not counted as debt so it does not impact a Property Investor's outstanding loan balance. Receivables financing also requires no equity collateral so Property Owners are free to gain the appreciation benefits.
We are excited to offer this new type of financing. We know that life happens and sometimes having an extra cash cushion can make the difference.