Accessing Equity to get involved in Joint Venturing for Real Estate developments.
So if you are looking to invest in real estate development with Bima Properties, congratulations. This is an incredible opportunity for you to and we at Bima Properties are here to help you so you can expand your income stream and ensure stability for you in the future.
In past articles, we have described how the concept of Joint Venturing works whereby the Developer is the Operating, or General partner whereby they provide expertise of sourcing, acquiring, managing and developing the real estate project and the Investor who is the Limited partner help to provide financing for the project.
But many people wonder how they can acquire the funds to get involved in real estate development projects with Bima Properties.
The biggest resource that many people actually is the Equity they have in their own home.
REFINANCING YOUR OWN HOME
One option for tapping into your home equity for the purpose of investing in real estate is to refinance your mortgage. Essentially, mortgage refinancing means getting a reevaluation on your home and then redoing your mortgage based on the current value. This will allow you to tap into the equity your home has built over the years, and pull out the extra funds for a down payment on your secondary property.
Keep in mind, when using some of your current equity, it will increase the principal amount and the interest payments on your mortgage as the mortgage is now refinanced at a higher amount.
Using a HELOC
There is a second option to unlock your home equity, which is through a line of credit or a HELOC, which stands for “Home Equity Line of Credit”. This option allows you to borrow money using the equity in your property, with the property as collateral.
A HELOC serves as a revolving line of credit to allow the borrower to access funds, as needed, letting you utilize as much (or as little) equity as required. Another benefit to this is that you will only pay interest on the amount you actually use. This can provide financial breathing room, especially during tight months. That said, if you do choose to pay the interest as well as a portion towards the principle, it can help you pay off the loan much faster.
You can utilize a HELOC in two ways:
1) You can tie it to your existing mortgage
2) You can apply for a HELOC separate from your mortgage
In Canada, you are able to borrow up to 65% of your home’s value using this method.
Many of our existing Investors have acquired the funds to invest with us in our projects via these routes of Refinancing their home or by using a HELOC.
There are many who worry about paying the additional interest on these loans so they don’t have further debt. But when you see that Bima Properties provides investors with a 15-20% annualized ROI and the interest you are paying is only 3.45% (prime +1.00) for a HELOC as of Jan 11, 2021 or a blended rate of 3-5% for a Refinance (depending on the lending institution you go to). You are still earning 12-18% return on your investment once the project is completed and sold. Bima Properties Track Record has shown this to be true.
Putting your investment in Stocks, GIC bonds, ETF’s would not produce those types of yields.
Feel free to contact us at Bima Properties to discuss how we can help grow your income stream using these methods and put your money to work.
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