When investing in real estate, lenders, who are normally banks, require you to place a down payment before they advance a loan. In most cases, the bank will request for no less than 10 percent of the property’s value. Unfortunately, strict lender requirements have locked many homebuyers out of commercial real estate loans.
Re-ignite your investment dreams
You can still achieve your investment dreams through peer-to-peer (P2P) lending. The concept involves a process where a company like Blackhawk Corp matches lenders to their potential borrowers on their platform. The lender then has the opportunity to review and decide whether or not he or she would like to proceed with the loan and its terms. At the appointed time every month, the borrower pays back the loan in the agreed manner and if the borrower defaults, the lender acquires the borrower’s real estate as collateral.
Where everyone ends up happy
There are lenders who prefer to give money so long as the venture involves developing property for re-sale. In some peer-to-peer lending arrangements, lenders own equity in your investment.
Proper homework required
Real estate investment can generate excellent returns for you as a lender. On Blackhawk’s peer-to-peer lending platform, annual returns can range from 6-11%. Take time to find out the going rates for properties in the targeted area. Get to understand which properties clients prefer most. These aspects will give you an insight on whether the area is good to invest in or not.