Best method for buying investment properties?

[cgalexander]

What are your suggestions on the best method for purchasing investment properties? I purchase single family homes and keep them as rental properties. Should I pay cash? Or should I take out a line of credit and use the home as collateral? Or should I take out a personal loan? I am in the process of starting an LLC but unsure as the best method to use to fund these deals going forward.

[justin0419]

If you need to finance it, why not do it the old fashioned way by just getting a mortgage and putting some down?  You could use cash to buy the homes and then re-fi your money out later.  That would be another way.  If you buy homes and leave them free and clear, it will really slow down your rate of purchasing properties.  A personal loan is going to come at a higher interest rate and you probably won't get too much money that way since it's an unsecured loan, so I wouldn't go that route.  My wife and I have an LLC and we just get mortgages in the name of the LLC.  We have to personally guarantee the loans.  It's worked well for us.

[satarnag]

What are your suggestions on the best method for purchasing investment properties? I purchase single family homes and keep them as rental properties. Should I pay cash? Or should I take out a line of credit and use the home as collateral? Or should I take out a personal loan? I am in the process of starting an LLC but unsure as the best method to use to fund these deals going forward.

You should speak with an accountant and a financial planner to see what is the best strategy based on your assets and income.

[lauraalamery]

Of course if you have money and good credit it is easy: you can get a conventional loan and out down a downpayment.
The real question is for people who want to invest, but have no money or credit. And yes, it is possible. I have done it myself and I teach investors every day how to do it.
Options include: Subject To, Lease Options, Joint Ventures, Private Funding, Syndication, etc.

Where there is a will there is a way!

[Leonard Vice]

Grab a good realtor partner before starting your investment. Someone who knows better off in the property market and who knows more than the language you know in banks.

[SWEATequity]

I have used conventional financing on my last 4 deals. I was able to get a HELOC off my first property. I have used it to fund the other three deals.

I use my HELOC to pay for the down payment, closing costs and repairs.  Once the repairs are completed I refi and pay back my HELOC and then repeat.This may not be what is recommended but it has worked for me.

Personally I would not tie up my funds or take a HELOC out on my primary to funds deals. I try to keep investing as self sufficient as possible.

[Bay Area Brian]

All depends, I prefer keeping my cash and using other peoples money and assets, and then when it is necessary to have a large amount of cash to swing a deal I can pull the trigger and get it done. Especially when interest rates are as low as they are now I'm happy to build as much low interest rate debt as I can and save my bullets.