One thing I’ve noticed with real estate investors is that finding a good deal and being financially positioned to move on it are two completely different things.
An investor might already have money lined up for the property itself, but still need additional capital for renovations, materials, contractors, carrying costs, marketing, or keeping enough cash reserves available for the next opportunity.
That’s where having multiple funding options available can make a difference.
Depending on the business and borrower profile, that could mean business lines of credit, 0% APR business credit cards for 9–12 months, term financing, or revenue-based options.
For agents who regularly work with investors, having a knowledgeable funding resource in your network can help you solve a problem that might otherwise prevent a client from moving forward.
I’m curious, for the agents here who work with investors, how often does access to capital become an issue after your client finds a property they want?
CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
2w
Nicholas, I think the biggest issue is that investors often solve for the purchase price and underestimate how much working capital the project itself will consume after closing.
On a flip, BRRRR, or value-add deal, I'd want the full capital stack mapped out before the offer goes in: acquisition, rehab, carrying costs, interest, utilities, insurance, taxes, contractor draws, contingency, and enough reserves to survive a delay.
That matters from the tax side too. The source and use of funds should stay clean, especially if someone is using a HELOC, business line, private money, or multiple accounts. Interest deductibility can depend on how the borrowed funds are actually used, so sloppy tracing can create problems later.
If the investor is doing repeated flips or development projects, I’d also review whether the active business side should be structured separately and whether an S-Corp makes sense once profits justify it. If they also hold rentals, I’d keep those in separate LLCs because the tax treatment is very different.
The best funding setup is usually the one that gives the project enough margin to survive being slower and more expensive than planned.
Feel free to DM me, I’d be happy to send over a few resources that might be helpful.
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