Investing In Buy and Hold Properties

Buy and hold is a great strategy to earn passive income! Learn about buy and hold investments and what financing options to consider.

What Is a Buy and Hold Investment?

Buy and hold is an investment strategy used by real estate investors that are looking to build wealth over a long period of time. In other words, investing using a buy and hold strategy is not for those looking for instant gratification. This type of investment requires patience, however, the reward can be substantial and well worth the wait. Typically, investors planning on using the buy and hold strategy purchase a rental property and plan on holding onto the property for at least 5 years, if not more, and usually refinance or sell only if the timing is right.

“Don’t buy and sell, just buy!” - Forbes Councils Member

This idea stated by Forbes councils member, Simon Mass, in a recent article can be a very effective investment strategy. With the ability to pull equity out of a property using a cash-out refinance, the investor can then use that money to buy another property. The investor can continue to do this as they hold each property and wait for them to increase in value, eventually having multiple streams of passive income.

How To Get Started

First things first, you will need money in order to start making money. If you don’t have the funds readily available to purchase your rental property, then finding the appropriate financing is the first place to start. Fortunately, there are plenty of options available to investors who are using the buy and hold strategy.

Angel Investors

This type of financing comes from friends and/or family. A friend or family member can come into the deal as either a lender or a business partner. While this works well for some, it can be very risky for others, so when approaching a friend or family member for financing make sure they are serious and reliable.

Private Money Lenders

Private money lenders often provide more flexible financing options than traditional lending institutions, like banks, and are generally preferred by investors particularly with buy and hold properties. Loan terms are negotiated to fit the needs of the investor, however, you can expect higher interest rates in exchange for flexibility.

Creative Financing

With this type of financing there are a variety of options. Motivated sellers may be open to lending an investor the money to buy their property offering unique terms to get the deal done. If you choose to seek out creative financing, it is best to enlist the help from a lawyer to ensure everything is structured legally and properly.

Buy and hold is a great investment strategy whether you’re brand new to real estate investing or just looking to expand your investment portfolio. Find the type of financing that works for you and start earning!

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About CALCAP Lending

A division of CALCAP Advisors, CALCAP Lending benefits from the expertise of a seasoned team of professionals with extensive, successful track-records covering a variety of disciplines and leading large, nationally-recognized institutions. A private money direct lender, CALCAP Lending provides short to mid-term financing for property investors and businesses looking to purchase, refinance, renovate, and construct residential or commercial properties.

Lending FAQs

You've got questions, we've got answers.

What is private money lending?

Private money lending is a collateral-based lending strategy that is often associated with shorter terms and more attractive features. A private money loan offers more flexibility than a conventional mortgage or bank loan.

How does a private money loan work?

Private money lenders provide financing using money from private entities. Private money loans often work as bridges to help investors gather funds to achieve their short term real estate goals, but long term, permanent options may also provide.

Why would I choose a private money lender?

There are many advantages to using a private money lender for your real estate investments! Private money lenders can be more lenient when it comes to borrower credit issues, often there are no prepayment penalties, you can leverage your cash to buy multiple properties, and private money loans are quicker when compared with institutional loans.

Can I get prequalified for a loan?

CALCAP has a responsive loan team who are able to prequalify you. Contact a loan specialist at 833.816.5580 to get started.

How long does the lending process take?

Private money lending can be a quick and painless process. From start to finish, 30 days is common, however, turn around times can be as short as 10 business days.

Can I still be approved for a loan if I have bad credit?

Generally yes, we understand that people have temporary financial issues that come up, and we want to work with you to help you rise up financially to a better place. Offsets to credit concerns may include experience as a real estate investor, good cash reserves, and/or larger down payments.

I am a broker or investor, how can I work with CALCAP?

Business is built on relationships. Ours is no different. CALCAP Value and Preferred Partners receive exclusive rates and services. For more details and to submit your application, visit our partners page.

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