Investing in property is a great way to diversify your income and effectively start your own commercial real estate business. However, finding ways to pay for those purchases can feel a bit overwhelming and confusing. While using your personal savings is always an option, most real estate investors prefer to use different loans to pay for their properties. Here are a few great options to consider.

1. Loans from Hard Money Lenders

Hard money loans are issued by private companies that specialize in helping people interested in investing in real estate finance the purchase of investment properties. Instead of looking solely at your credit score to decide if you’re worth lending to, hard money lenders look at the overall value of the property.

If they deem the property valuable enough, they’ll lend you the money. If you accept the loan, the property you’re buying becomes the collateral for the loan.

These loans have incredibly short repayment periods with most lasting for just 3 years. You must pay the loan back in full by the end of the loan term. If you can’t, the lender can take possession of the property and use it to settle your debts.

2. Traditional Mortgages

Believe it or not, you can always use a traditional mortgage to buy real estate that you’re planning to use for a rental or other income-generating property. To apply for these loans, you’ll need to head to your local bank or credit union or partner with a mortgage broker online.

To qualify for these loans you’ll need to have 20% of the purchase price of the house as well as a good credit score. If you don’t have either, you may still qualify for the loan, but will likely get a higher interest rate for the life of the loan.

Most traditional mortgages will last between 15 and 30 years and require monthly payments until the loan is repaid completely.

3. Loans Issued By Private Individuals

You don’t always have to go to a professional lender to get a loan for your investment property. If you have friends, family, or industry connections with money they’re willing to lend out, approach them.

These loans typically have lower interest rates, more favorable terms and are secured by the property itself. If you don’t repay the loan in full by the end of the loan’s term, the private lender can take possession of the property and sell it to settle your debt.

If you’re thinking of getting started in commercial real estate investing, familiarize yourself with these lending options.