Recommendations from friends also are a good way to vet lenders, and investors shouldn't be afraid to inquire about their credentials, and then verify them. "What is their background?" Huettner asks. "Do they have a college degree? Do they belong to any professional organizations? You have to do a little bit of due diligence."
Ask for owner financing
A request for owner financing used to make sellers suspicious of potential buyers, because almost anyone could qualify for a bank loan, Huettner says. But these days, it's become more acceptable due to the tightening of credit.
However, you should have a game plan if you decide to go this route. "You have to say, 'I would like to do owner financing with this amount of money and these terms,'" Huettner says. "You have to sell the seller on owner financing, and on you. You need to present a picture to someone so they're not filling in the gaps with their worst fears."
Think outside the box
If you're looking at a good property with a high chance of profit, consider securing a down payment or renovation money through home equity lines of credit, from credit cards or even from some life insurance policies, says Ben Spofford, an Ohio home remodeler and former real estate investor. As always, research your investment thoroughly before turning to these riskier sources of cash.
Financing for the actual purchase of the property might be possible through private loans from peer-to-peer lending sites like Prosper.com and LendingClub.com, which connects investors with individual lenders.
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Just be aware that you may be met with some skepticism, especially if you don't have a long history of successful real estate investments. Some peer-to-peer groups also require your credit history to meet certain criteria.
"When you're borrowing from a person as opposed to an entity, that person is generally going to be more conservative and more protective of giving their money to a stranger," Spofford says.