How do you access equity to fund a property deal?

How to access equity to fund a property deal?

You have found the site.

You have crunched the numbers.

You are ready to get started.

But...

You need to fund it!

One of the first things to do when considering doing a development is to work out how to get access to equity to fund your deal.

This was one of our greatest hurdles when we first started. 

We had to sit down and explore all our finances before jumping into developing our first development. 

The takeout here is that this is the first hurdle to jump straight over!

There are a number of ways to free up equity to fund a project. 

Here are some tips and ideas to consider to help you do just that.

Refinance your existing mortgage

If you own your own home, one option is to refinance your existing mortgage.  

This is how my husband financed our first property development.

It sounds like a bold move... and it is.

But if you do your numbers right, the risk is low and it will allow you to use the equity in your home to fund your development project. 

However, many do not wish to risk their home so you may want to try another option!

Sell an existing property

If you own another property, you have the option to sell and free up equity for your development deal.

This could include a rental property or a vacation home.

There is no doubt this represents a sacrifice in lifestyle and assets held, but this tactic has less of an impact on your daily living.

Take out a line of credit

Another option is to take out a line of credit.

Either against your home or another property if you have one.

This can provide you with access to cash that you can use to fund your development project.

This keeps your assets intact, but it’s important to understand your repayment plan.

You don’t want it eating away at any profit you might make.

Partner with others

If you don't have enough equity to fund the project on your own, consider Joint Venture partners.

This is now how my husband and I manage our development deals.

This could include family members, friends, or business partners.

This option will mean you share the profits.

But it also means you share the risk!

It also may allow you to do more than one development at a time.

Scale up!

Long term and very profitable partnerships are achieved using this tactic.

Seek out investors

Find financial investors interested in investing in your development project. 

This could include private equity firms, venture capitalists, or high-net worth individuals. 

These relationships, if beneficial and fair, can offer profitable long-term solutions to funding deals. 

It is a good idea to seek legal advice to set these relationships up so that they are transparent, fair and binding.

As you will see, there are many ways to access equity to fund property development.

During your journey it is likely that you will employ more than one.

Getting the funds is the first step in getting your deal off the ground, everything else comes after that.

At Rising Star we spend a considerable amount of time on this first step, and provide many resources to attract, set up and secure these funds.  

This is the same strategy which has helped build my wealth, and that of countless others, using property development as a tool. 

Believe me when I say, it's not hard, but it is about understanding the steps and then following them.

It’s about knowledge, planning and working towards wealth creation in YOUR own time and when YOU are ready.

If you would like to know more about the Rising Star and if it is a fit for you, contact us [email protected] and we will be happy to assist.

It could be your first step to starting your first deal!

Until next time.