You can obtain conventional financing from any number of commercial banks and mortgage companies. This source of credit can be very cost effective, providing you have good credit. Most buyers of foreclosed properties use conventional sources of funding, ie mortgage companies or banking institutions.

You can also find investors in private lenders ie. individuals, including friends, relatives, and others who would be interested in providing some or all of the money in exchange for a percentage of the profits you will make when the property is resold. You can advertise by word of mouth, via the Internet, or in local newspapers. You can use existing lines of credit from home equity loans against your own property or from credit cards to fund your investments. Regardless of who's providing the financing, you'll need to put together a loan package that outlines the viability of the investment.

Some investors use hard money lenders who are in the business of providing loans for real estate deals. These sources require you to make monthly payments on the loan until you sell the property and pay off the balance. Check local sources, including the newspapers and television, for ads from hard money lenders and investor-partners.

It’s important for a buyer to be pre-qualified before engaging in discussions with a seller. This ensures that the buyer is in a financial position to purchase the property, and is in the strongest possible position to negotiate.
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