Investing in property can be incredibly lucrative, but it requires capital. A traditional mortgage requires piles of paperwork and credit checks, and it can be a lengthy process. On the other hand, a short-term caveat loan can provide the perfect solution.
How Does a Caveat Loan Work?
A caveat loan doesn’t require a credit check; you simply need to own real estate worth at least as much as what you need to borrow. Repayment terms are flexible and convenient, ranging from interest only payments to principal and interest, depending on what works best for you. Normally the term is between two and twelve months.
The application process is simple, and you will receive approval in as few as two hours. Funding can often be completed three days after the approval. Besides their convenience, simplicity, and flexibility, these loans can provide a real solution to an investment opportunity.
There are different investment property opportunities that appeal to different people. You may want to purchase a home that needs to be fixed up. As long as your real estate collateral has enough equity, you can borrow the money to purchase and renovate the investment property. Once you sell it, you can repay the loan.
Another option is to purchase a commercial property. You may find one that already has a built-in tenant, and you know that you will receive income as soon as you close. This is a great time to use a caveat loan, as you already have the income in place to repay the loan. Once the loan is paid, the profits all belong to you.
The Value of Flipping Investments
There is a great deal of potential for profit in the home flipping industry. Most people just don’t have the extra capital to get in the door. There are homes for sale that are slightly distressed, but with a little work, they can be transformed into somebody’s dream home. Even if you take out a mortgage, you won’t have the cash for the renovations. With a caveat loan, how much you can borrow is based on the value of the real estate you put up for collateral. In essence, as long as your real estate has the equity, you can borrow enough to purchase the investment and make the necessary renovations.
Once you flip your first home, you may have extra money left over. You can continue to build on this process, borrowing less money each time. Eventually, you will be using your profits to make more profits without the need of a loan. A caveat loan is the tool that can catapult you to this level of financial freedom.
For example, a few days before Christmas, Cricket Captain Steve Smith moved into his new home, which he purchased from Yanis Derums, owner of Mango Credit. Derums purchased the property in 2008 and has almost doubled the value. For more information on this, click the link: https://www.domain.com.au/news/steve-smiths-new-innings-at-a-knockdownrebuild-in-balmain-20160128-gmfrvi/
A caveat loan is a simple and quick solution to the need for capital. When you want to buy an investment property, the goal is to turn it over and reinvest. This kind of loan provides the solution to your capital needs.