1. Leverage (Other People's Money). Leveraging will make every dollar count. You do this by pooling you money with other people's money. It's simple: If you have $50,000 and pool with three other people with $50,000 each, together you have $200,000 to invest. This makes is it easier and more profitable for all of you. And because you organized this deal and worked to make the investment property profitable, you will keep the majority of that profit. The investors didn't have to do anything but put up their money, but they made a profit as well.
In order to gain the trust of other investors is by having a strong credit history, good character (ethical), and have good references. They need to know that they are doing the right thing by putting their money into your hands. This is a trust situation. They are trusting you to be who you say you are and do what you said you would do - turn a profit.
2. Pre-approval with an equity line of credit. If you're a property own now, and have a good credit history, you may be able to get and equity line of credit for the quick purchase of your investment property. This line of credit is drawn against the equity of your current home. You have a check book and a line of credit that you can draw funds from with little restriction. The interest is charged only on the current balance from this credit line. If you don't use it, you don't pay interest on it. But, when a property comes up that meets your criteria and passes all of your tests, you will be able to purchase it immediately with this line of credit.
3. Pledged Account Programs. This is a very short term line of credit, used to get the purchase of your investment property finished. It is a no down payment loan. This is also an adjustable rate mortgage plan, so selling quickly is extremely important. If you can't sell quickly, then refinance at a fixed rate to keep payments under control. Then you can use the property for rental purposes, with the tenant making the mortgage payment, until you can sell.
In a pledged account, the borrower or his/her relatives pledge certificates of deposit to a lender for security on the no down payment program. The principal and interest earned continue to belong to the borrower or their relatives. But, the CD secures the no down payment loan and lowers the lender risk.
There are other creative ways to finance the purchase of foreclosure property. Check with your local banks, credit union, or savings and loans.
