Home equity loan, a good source for capital to help a new investor begin the process can be found in the investor's own home or investment property. Many lending institutions make loans secured by the equity in your home or other properties, usually for about 75% of their value. If you look for special offers, you can get as much as 80% to 85%. The interest rate is usually tied to the prime rate: for example, prime rate plus 1% or 2%.
The payoff period, or time in which the investor is required to repay the loan, is 5 to 15 years, depending upon the lending institution. Most institutions do not charge any points (the percentage of the loan that the borrower must pay to the bank) for making the loan. In addition, the origination costs of the loan are very small.