What Are the Best Loan Options for Real Estate Investors in 2025?

By Shelby Campbell

With over two and a half decades of unwavering commitment to the mortgage industry, I am your seasoned Mortgage Loan Officer dedicated to helping individuals and families achieve their homeownership dreams.

If you have cash available, it may seem like the easiest option to simply write a check and close the deal. But here’s the thing: paying all cash might not be the smartest move if your goal is long-term growth and building a scalable portfolio. In today’s fast-paced Spring 2025 market, leveraging strategic borrowing can help you do more with less, reduce your risk, and increase your overall return on investment (ROI). Here are three powerful loan options you can use to grow your real estate business faster and smarter:

1. Conventional mortgage loans. Conventional loans are a popular choice for buy-and-hold investors, and for good reason. These loans come with a lot of benefits:

• Low interest rates
• Long repayment terms
• Predictable monthly payments
• Strong potential for rental cash flow

These loans are backed by Fannie Mae and Freddie Mac. While they require good credit, income verification, and asset documentation, they are still one of the most cost-effective ways to finance rental properties. Additionally, you get to keep your cash liquid for other deals or property improvements so you can scale your business faster. Think of conventional loans as the foundation of your investment strategy: strong, stable, and built for the long term.

2. Hard money loans. If you’re flipping properties or buying something in need of serious renovation, hard money loans could be the perfect solution. Here’s what makes them stand out:

• They’re asset-based, meaning they focus on the value of the property rather than your credit score.
• They’re quick to fund—sometimes in just days, not weeks.
• They’re great for short-term projects.

Hard money loans are typically used to purchase a property quickly, make necessary improvements, and then either flip or refinance it into a longer-term loan. The trade-off is that interest rates are higher, but the speed and flexibility they offer are hard to beat when a deal comes up. The key is having a solid exit strategy. Hard money isn’t meant to stick around forever. It’s a tool for rapid growth when you need it.

3. Private money. Private money loans are a great option when you’re doing creative or unconventional deals. These loans come from individuals, like family, friends, or other investors, and offer a lot of flexibility:

• You can structure the terms, interest rates, and repayment timelines to fit your needs.
• You can move quickly, even when you don’t meet the requirements of traditional lenders.
• You’re building long-term partnerships with other investors.

Private money loans allow for more creativity in structuring deals, making them ideal for investors who don’t want to stick to the traditional lending path. However, even if you’re borrowing from people you know, it’s important to treat it like a professional transaction. Use legal documents, outline clear repayment terms, and be upfront about the deal. When done right, private money can help everyone grow and create mutually beneficial partnerships.

Use leverage to scale smarter. You could pay all cash, but should you really do that? Here’s why using leverage makes sense:

• You keep more cash in hand for future opportunities.
• You can buy multiple properties at once.
• You can spread your risk across a more diverse portfolio.
• You increase your overall ROI.

Leverage is a powerful tool to help you grow your business quickly while keeping your finances flexible. If you want to be profitable in real estate investing this spring, you can call, text, or email me today. I’ll walk you through your options, run different scenarios, and help you find the smartest financing strategy based on your unique goals.