
Florida is a fantastic place to be in the real estate business. With numerous people looking to move, live, and work here every single year, Florida has long been one of the top destinations in the country. It also helps that Florida consistently ranks as one of the best states in the country for doing business.
Whether you’re starting your real estate business in Florida or you want to expand further, having access to capital is vital. Here are the top three ways to finance your real estate business in The Sunshine State!
Hard Money Lender
Arguably the best way to finance your real estate business is to use a hard money lender. These lenders are not like banks or other financial institutions. Hard money lenders control their capital. As such, they can make lending decisions quickly and efficiently.
Hard money lenders can specialize in real estate, meaning that these lenders can evaluate your real estate business and project on its merits. Consider Hard Money Lenders IO, a private lending company based in Miami, Florida. This company finances multiple loan types, including fix and flip, new construction, cash-out refinance, and rental property loans. Instead of applying for a generic “small business loan,” these hard money companies have specialized products for your particular industry. That generally makes them easier to qualify for, and they sometimes require fewer personal guarantees and a lower personal credit score.
It is worth noting that hard money lenders can finance any real estate transaction if they so choose. Other loan programs, like SBA loans, expressly prohibit real estate transactions. That’s one of the most significant reasons why hard money loans are preferable to other options.
Hard money lenders typically offer better interest rates than other loan types. Plus, they have the short duration necessary for some real estate transactions. It’s not uncommon, for example, to borrow money at 1% per month for the two months required to complete a fix and flip.
Indeed, contacting a hard money lender is probably the fastest and most straightforward way to finance your real estate business in Florida.
Microloans
In the business world, microloans aren’t that micro – they’re actually up to $50,000. These loans are typically for starting or growing a business, making them perfect for people who are beginning their real estate business in Florida.
Many different lenders are in this space, and you can easily find them using your favorite search engine. If you get an SBA microloan, interest rates typically vary between 8% and 13%. However, private lenders can also offer these types of loans, and they may have significantly higher rates.
Microloans don’t contain enough cash to complete many real estate transactions. However, they are pretty helpful if you’re looking to expand operations or you’re looking to avoid a potential cash crunch.
Crowdfunding
Another option for financing your business is to consider crowdfunding. If you have ever invested in Prosper, LendingClub, or Kickstarter, you’ve already experienced crowdfunding before. Indeed, crowdfunding was one of the top five ways to start investing in real estate. Instead of being the investor, though, you can have people invest in your company!
You can also crowdfund your entire real estate business through a loan from Prosper, for example, or you can crowdfund your particular project with entities like Fund that Flip or Groundfloor. These companies essentially make hard money loans and then sell pieces of them to investors, who then receive their money as you pay it back, with interest.
The only downside to crowdfunding is that it can sometimes be slow. You’ll need to get your project approved. Depending on how the platform works, your project might need to go up on the site where individual investors can contribute money. That also takes time. If you’re looking for working capital, though, crowdfunding can be a way to get the cash you need.
You Can Start or Grow Your Business in Florida
Between these three options, hard money loans, microloans, or crowdfunding, you should have enough possibilities to start or grow your business. No matter what your project is, whether you’re looking for the best hard money construction loans or a $20,000 microloan for an expansion, there’s a loan product that is perfect for you!
Disclaimer
The information contained in South Florida Reporter is for general information purposes only.
The South Florida Reporter assumes no responsibility for errors or omissions in the contents of the Service.
In no event shall the South Florida Reporter be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the use of the Service or the contents of the Service. The Company reserves the right to make additions, deletions, or modifications to the contents of the Service at any time without prior notice.
The Company does not warrant that the Service is free of viruses or other harmful components