Many loan products that are designed for investment properties require a minimum of 20 percent down and carry a higher interest rate than mortgages for owner-occupied homes. Those terms can be difficult for new investors to handle, especially when they don't have excess funds or haven't yet generated a cash flow from their investments. There are methods you can use to work around the problem.

For a home, you can take advantage of owner-occupied loan programs if you are open to living in a residence that you are refurbishing. Lenders usually ask you to sign a form that states it is your intent to live in the house yourself for at least one year. Many loans, some for rehabilitation purposes and some with little to nothing down, are available to buyers who can answer “yes” to that question.

After the period you've agreed to, you can sell the house and start over with another. If you use that method a few times, you'll hopefully have enough funds to obtain more conventional investor funding for future purchases. It's a good way for beginners to enhance their cash flow since it means they only make payments on one real-estate loan at a time.

Home Equity Loans

If you have no desire to live in your investment property, your funding could come by taking a home-equity loan on your permanent residence. This method works well for those who have good equity in their homes, but equity loans can be a dangerous solution. If you do not repay the loan, the lender can foreclose, and you will lose your home. Use them only in an emergency for properties you know you can turn around quickly for a profit.

Credit Cards

Credit cards with cash access are another way to raise funds in a hurry. You'll probably pay high interest rates for the use of the money, so reserve this method as a short-term solution.

Private Investors

Mortgage brokers sometimes work with private investors who make real-estate loans. Using someone you know and trust is a better solution than contacting an unknown private investor who advertises in your local paper.