Mortgages & Creative Financing

3 Loan Programs to Help Sell Your Investment Property

Expertise: Real Estate Investing Basics, Landlording & Rental Properties, Real Estate News & Commentary, Mortgages & Creative Financing, Real Estate Wholesaling, Personal Development, Flipping Houses, Business Management, Real Estate Deal Analysis & Advice
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loan programs for real estate investors

So you bought that investment property, rehabbed it from top to bottom and now you’re wondering where the buyers are.  Unfortunately this economy is nothing like Field of Dreams – “If you build it, they will come” does not necessarily work anymore.  With so many discounted properties on the market right now, the fix and flip model is trickier than ever. Investors need as many tools as possible to make this strategy work.

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With such a high degree of competition, anything you can do to set your property apart from  other rehabbed or discounted properties is a huge plus. Doing a high-quality rehab is obviously one of the best ways to set your property apart. However, while this will give you an edge over much of the competition,  it may take more than this to get the prospective buyers interested in the property.

I learned a few years ago that marketing a property with favorable loan programs or even grant programs can expand my pool of potential buyers significantly. Interestingly, there are many programs available to potential buyers that the general public is clueless about.

Here are 3 potential loan programs that all investors should be aware of as possible marketing tools for selling property:

203K Loan – HUD developed the 203K loan through FHA a number of years back as a tool to allow homeowners to purchase and renovate their primary residence through this rehabilitation loan. The guidelines are similar to an FHA loan except the 203K actually lends the money for the acquisition as well as the repairs with minimal down payment. As an investor, marketing a wholesale property that has not yet been fixed up in conjunction with a 203K loan is an excellent way to find possible buyers. I would suggest that an investor partner with a local loan officer who has a lot of experience and success with this loan program before marketing it with the property.

Federal and Local Grant Programs – Most metropolitan markets have benefited from federal and local grant programs such as the HOME, HOPE, and Community Development Block Grant Programs developed under HUD. As this grant money finds its way down to state and local municipalities, money becomes available for specific neighborhoods and individuals to help with down payments, closing costs, etc. As an investor, becoming aware of the various grant programs in your area can be an incredible tool in helping to market your properties. I have found that many of the larger lenders in a particular region, especially those that do a large number of FHA loans, have access to and knowledge of these types of grant programs. Aligning your marketing efforts with a lender who has access to grant money can be a very effective strategy.

USDA LoansUSDA loans, also called Rural Development Loans, are typically only available in slightly more rural locations. The program was developed to help rural communities thrive by making land and property more affordable for individuals. I have found that while it’s intended for rural communities, many locations qualify for these loans that are not as rural as you might think. The great thing about USDA loans is that borrowers can get 100% financing with some flexibility on credit requirements. Investors should always check the USDA website to see if their property may be eligible for a USDA loan. If so, it’s a great way to market a property with 100% financing.

As always, the more educated an investor can be in regards to financing, the better off he or she will be.  Having the ability to present favorable loan programs to entice prospective buyers is an essential tool for any investor.

Ken Corsini G+ is the host of the Deal Farm Podcast (on iTunes) and has 10 years of full-time real estate investing experience...
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    Sharon Vornholt
    Replied over 8 years ago
    Ken – this is great information especially for rehabbers.