Often, first-time investors use their own money to invest first. This usually works to buy a couple of properties free-and-clear but soon, most people run out of their own capital. which means they either have to stop buying real estate or they have to figure out how to buy more real estate without using their own money. florida wholesale deals

One way to finance your next investment is to borrow money through a bank or lending institution. If you have good credit, and enough money for a down payment, then this can be an effective way to acquire more properties ó potentially several more properties! Youíll need to make sure that your credit score is in good shape, so be sure to pay your debts on time and pay them off in full regularly to demonstrate a history of good credit management. Once you build up good credit, financial institutions will be willing to lend to you and you can go out and acquire properties.

At some point, however, your debt-to-income ratio might exceed a bankís desire to lend to you, once you have a certain number of properties under ownership. When this happens, then itís time to turn to other sources to finance your real estate investments. One very clever way of financing your real estate investing is to borrow against your existing investments and use that money to buy new investments.

For example, if you own a couple of properties and they have some equity in them, why not borrow against them (by refinancing them or by taking out a home equity line of credit) and using that money to acquire more properties. This is the power of leverage at work in your investments! Of course youíll want to be careful that your debt servicing payments are not more than the income you earn from your new acquisitions but there are investors who build up a large portfolio just with their own credit and this self-financing strategy!