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Invest in Real Estate with Brusied Credit

January 10, 2012

Thinking of investing in real estate but have some bumps and bruises on your credit, there are still alternatives to take advantage of the great pricing on real estate and historically low mortgage rates.

Consider forming a LLC or investment trust with others that have good credit and like-minded investment goals. There are still a few lenders out there that will do real estate loans to a LLC without a personal guarantee.. You will need to do extensive research to find lenders in your area that will do loans in the name of a corporation. Banks that specialize in commercial financing are more likely to do loans in the name of a corporation. The tradeoff for getting financing in the name of your corporation is that the bank will typically require a larger down payment. The lower loan to value ratio provided by the larger down payment is the extra protection the bank needs to offer the financing.

Hard money bridge loans are making a comeback. Interest rates for hard money mortgage loans are typically higher than traditional mortgages, but the afford the investor an opportunity to get title to a property, make any necessary improvements or repairs to the increase the property value to make it a more attractive asset to a lender or sell at a profit.


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