If you are new to real estate investing, you may need loans to pay for your first investments. You have many options, including residential loans, commercial category loans, and other financial solutions.

Real estate investment loans are essential for many beginner investors. If you’re just getting started in real estate investing, you may not have the profits and capital yet to start reinvesting the money you’ve made into real estate. If you’re like many new investors, you’re likely either just moving away from or are still working at a job in which your income is directly tied to the amount of time you spend at your work. Hourly wage type jobs rarely give you enough money to start investing in real estate heavily. In fact, many investors start investing in real estate because they want to get away from the limits of a wage based job and start pursuing the real freedom that comes from passive income.

Real estate investment loans are the solution. You can find these loans through a number of sources. Credit unions, savings and loan associations, savings banks, commercial banks, insurance companies, mortgage bankers, finance lenders, mortgage trusts, investment trusts, and pension funds and all resources to get financing for your real estate investment. Even private individuals can offer loans specifically created for the real estate investor.

There are in fact two types of loans that you may be interested in as a real estate investor. These are commercial and residential. Residential loans are often called Non-Owner Occupied (NOO) loans, and these loans are used to purchase investment properties which are to be used for rental income and eventual appreciation. Usually, you get these loans for properties that have less than four rental units. Commercial category loans are used to buy commercial apartment buildings, or any type of apartment building with five or more units. If you want to buy stores, mixed-use buildings, warehouses, and other commercial buildings, a commercial category loan is also ideal. In both types of loans, the interest of the loan is paid from rental income. For both types of loans, your ability to secure a loan will depend on your credit scores, reserves, and your income. However, even if your income is small and your credit scores are not ideal, you may be able to still secure loans if you can show that you have a good business plan and tenants ready to take residency in your investment properties.

Real estate investment loans are provided, often with no limits, as short-term loans, interim loans, or long-term loans. If you are in an urban area and want to flip homes, hard money loans are often the best choice, especially and if your credit is not perfect. If you want to stay away from flipping houses, you have many other options, including equity financing, mezzanine financing, construction loans, structured financing, bridge or interim financing, and residential repair funding. Speak with your lender about the best options for your specific situation.

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