Buy and Hold loans
Real Estate Investing Dictionary
Capital Preservation Loan
Here's a way to buy properties while keeping CASH in your pocket:
When you find a property you can purchase significantly below market value, purchase it with a 6-9 month hard money loan with little or no cash down, then refinance it with a traditional bank loan – paying off the hard money loan and keeping the cash in your pocket!
Example -Make this a link to a separate page
Capital Preservation Buy & Hold Loan Example: You find a property in Colorado worth $200,000 that you can buy for $140,000.
Step 1: Purchase the property. We will lend you the full $140,000 (70% of the value). A bank will only lend 80% of the purchase price, or $112,000 which would require $28,000 out of your pocket!
Step 2: Refinance with a traditional bank to take advantage of their lower rates based now on the $200,000 value @ 80% = $160,000 – more than enough to pay off the hard money loan and keep the cash in your pocket!
This strategy works particularly well when your goal is to acquire multiple rental properties. If you had to put $20,000 to $100,000 down on every property you bought, you might run out of money very quickly. Using an Investor's Source hard money Capital Preservation Loan helps you keep cash in your pocket so now the sky's the limit on the number of properties you can purchase.