Investing in property is one way to diversify your holdings. If you think you can do more than just invest in stocks or bonds, this is one of the better options. Although you may be tempted to flip a house, which seems like a faster way to get your investment back and profit from the sale, the reality is it’s not as easy as television reality shows make it look.
Buying a property for renting
The real money comes from buying a property or properties and renting them out. It’s easier to find tenants than buyers, especially in this age of the millennials. More of these young people are interested in staying at their parents’ home because that’s the best way for them to save money. If they are ever tempted to leave the nest, they look for a place to rent, not to buy. So flipping a house may not be as easy as it seems.
Renting properties is a far easier thing to accomplish. There are more ways to find the money to invest in a rental property, as well. You can apply for a Freddie Mac Small Balance Multifamily Loan in Utah, as Bonneville Multifamily Capital recommends.
What is this Small Balance Loan?
A Freddie Mac SBL is a type of loan on multifamily properties. The loan is for an amount between $1 million and $5 million, for a property with five units and above. The loan’s securitization is similar to that of a K-deal, which has the standard securitization structure under Freddie Mac.
The company lets private capital absorb the first loss risk. With an SBL, the Sellers have to buy the B-pieces that their underlying loans secure. The Sellers can sell these to other investors. The collateral used to secure the securities is entirely made up of small balance loans.
With proper planning and the right type of loan, you can bring success to your investment property venture. This can mean a great deal of returns if done.