Do you need a lot of money to start your real estate business? The answer is both yes and no. You do not have to own the money to start your business. However, you need business funding options for real estate and need to find this capital to set your business operations in motion. In many cases, real estate agents obtain their specialized training and certification with the help of loans. The process of establishing your own real estate business is no different.
SBA Loans
Small Business Administration loans or SBA loans are quite popular among all business owners across the USA. The SBA can provide loans to real estate agents for any of the three purposes – purchase, refinancing or construction of commercial real estate properties. These are all term loans, but the repayment terms can be quite amicable. You can opt for up to 25 years term depending on the amount and the APR.
SBA loans provide easy access to all kinds of real estate agents and businesses to easily available, fully amortized loans. These are extremely low-risk loans that have their own cost. You need to undergo thorough credit checks. Sometimes, businesses have to wait for a month or more to receive the cash from the SBA.
Realtor Commission Advance
This is very different from any of the loans you have come across this far. Unlike most other business loan sources, the realtor commission advances require no credit check. Therefore, these realtor commission advance no credit check are highly coveted among all new real estate agents. You do not need an extensive history of business credits or a detailed financial profile to qualify for these advances.
The principle of these companies is quite simple – you are receiving early access to the cash you have already earned from your sale. These companies give you a percentage of the commission as a cash advance in exchange for a small fee (fraction of the commission). You do not have to worry about repayment since the companies collect the pending amount from the party paying you the commission.
Rollover for Business Start-ups (ROBS)
ROBS is an excellent way to fund a business that needs cash immediately. However, this is not akin to a business loan. You can invest over $50,000 from your retirement find for your business processes, but it is nothing like a 401k loan either. Several new and old real estate agents often opt for ROBS to fund their businesses, acquire new open houses and expand their offices. People do not have to pay large interest rates, so most real estate agents who opt for ROBS in their time of need show higher chances of success.
Conclusion
The three methods described here are the most common and the most rewarding among all real estate business funding options. Each one has their own set of pros. Pick one or more sources of capital depending on the unique needs of your business. Do not opt for a funding source simply because it worked for your friend’s business or because popular real estate agents are doing it.