High interest rates are making deals harder to close. Banks have become stricter and more expensive. That’s why smart investors are looking for creative ways to finance their deals. If you want to stay competitive, you need to know these alternatives.

Moving Beyond Bank Loans

Traditional bank loans just don’t work for many deals anymore. Banks typically lend 65-75% of a property’s value. But rates are high. Getting approved takes forever. And banks have strict rules.

Smart investors have found better ways. They’re using flexible financing options that make more sense for their deals.

Seller financing is making a comeback. Here’s why it works: Some sellers want to avoid big tax bills. Others want steady monthly income. These sellers will often finance part of the sale themselves. The terms are usually better than bank loans. You might get:

• Longer payment periods
• Interest-only payments to start
• Payment plans that match your business timeline

Mixing Different Types of Financing

Many deals today need money from several sources. Here’s what a typical deal might look like:

• Bank loan: 55-60% of purchase price
• Mezzanine loan: 10-15% more
• Preferred equity: Another chunk
• Your own cash: The rest

Yes, it’s more complex than one simple loan. But this approach helps you buy properties you couldn’t afford with just bank financing.

Mezzanine loans cost more than bank loans. But they have benefits. Some let you delay payments until later. Others let you convert debt into ownership. The trick is finding terms that work for everyone involved.

Partnering Up Through Joint Ventures

You don’t have to go it alone. Joint ventures let you do bigger deals by teaming up with others.

Right now, there’s a perfect match happening in the market. Some people have money but lack experience. Others have experience but need capital. When these groups partner up, both win.

Syndications have also gotten easier. You no longer need to know wealthy people personally. Online platforms help you raise money from investors who want real estate returns without the hassle of managing properties.

Using Bridge Loans for Quick Deals

Sometimes you need money fast. That’s where bridge loans come in. Private lenders can close deals in weeks, not months. They’ll also lend based on what a property could be worth, not what it’s worth today.

But be careful with bridge loans. You need a solid plan to pay them off. Have at least two or three exit strategies ready:

• Refinance with a regular bank once you fix up the property
• Sell to another buyer
• Switch to different long-term financing

Never take a bridge loan without knowing exactly how you’ll pay it back.

Taking Advantage of Tax Benefits

Some financing strategies come with major tax perks. Opportunity Zone investments are a great example. They let you:

• Delay paying taxes on capital gains
• Possibly avoid those taxes entirely if you hold long enough

You can even combine strategies. For instance, use a 1031 exchange to buy an Opportunity Zone property. Now you’ve stacked tax benefits on top of each other.

These strategies aren’t simple. You’ll need expert help. But the tax savings can turn an okay deal into a great one.

Getting Expert Help

Every deal is different. What works for one property might not work for another. The key is knowing all your options and picking the right mix.

Need Help With Your Next Deal?

Williams Capital Advisors creates custom financing solutions for complex deals. We have connections to many different lenders. We know how to structure deals that banks won’t touch.

Let’s talk about your next project:

Phone: (213) 880-8107
Email: francisco.Williams@williamscap.ai
Website: williamscapitaladvisors.com