Investor Loans

Investor Loans in Maryland, Virginia, & Washington, DC

If you have the opportunity to make a worthwhile investment but don’t have the necessary funds together in order to do so, you may be thinking about taking out a loan. If you decide to take out a loan in order to make an investment, then you’ll want to consider investor loans, which are designed specifically for different investment opportunities – most commonly for the purchase of investment property.

What are Investor Loans?

Investor loans are provided to borrowers  for the purpose of investing in an asset that is expected to provide some kind of a return within a short period of time. In fact, investor loans are often structured as short-term debt instruments that come with a comparatively low interest rate, which as a result helps to increase the profitability of the person taking out the loan. This doesn’t mean that investor loans are only provided for investments that guarantee a short-term return – you can use the loan for a long-term investment as well. If your investment isn’t expected to provide you with a profit for a longer period of time, then the loan will most likely have repayment terms between five and 30 years.

Investor Loans for Real Estate

Investor loans are often used to for real estate purchases. Buyers will take out investor loans in order to purchase either commercial or residential properties, then upgrade or repair the properties before reselling them at a profit. This real estate investment strategy is known as “flipping.” Investor loans are perfect for flipping real estate since it is a short-term investment strategy. Buyers will typically take out investor loans to not only cover the cost of the property but also to cover the costs of the repairs or upgrades that need to be done, which include both materials and labor. Once such properties have been sold, the investor loans can usually be paid back in full, leaving the investor with a significant profit as well. If a property is sold faster than expected and the project finishes under budget, the loan can be paid off sooner. Depending on how your investor loan is set up, it could reduce the amount of interest that is due, thereby increasing the overall profit even more.

One thing to keep in mind about investor loans is that they typically require collateral of some kind. For example, if you are making a real estate investment, the property you are investing in may not have a market value that is high enough to justify the loan amount that you are requesting. In such a case, you’ll need to pledge additional assets as collateral in order to have your loan granted. Not only will providing additional assets as collateral help reduce the lender’s risk, it could also help provide a better interest rate on the loan.

Inquire About an Investor Loan in MD, VA, or DC Today

Investor loans are perfect for short-term investments since they provide competitive interest rates and beneficial terms. For more information about investor loans, be sure to contact us at Eagle Creek Mortgage today.