8 Ways to Finance Your Real Estate Career Explore funding options you can rely on to launch your real estate business and manage the ups and downs successfully.

By Laura D. Adams

Opinions expressed by Entrepreneur contributors are their own.

Nora Carol Photography | Getty Images

If you're considering a real estate career, you may also be wondering how to finance it. The majority of residential sales professionals, commercial agents and property managers are self-employed independent contractors who earn commission-based incomes that vary from month to month. Building up your business and income may take some time.

Typical real estate startup costs vary by state and the arrangement you have with a sponsoring broker. For instance, they may cover some amount of insurance, office supplies and advertising. Your upfront costs may include:

  • Pre-licensing class
  • Exam and licensing
  • Association membership
  • Marketing and branding
  • Continuing education
  • Computer equipment
  • Customer management software
  • Miscellaneous business utilities

If you don't have ample financial runway to pay startup costs and cover your budget for at least six months, your real estate business could crash and burn quickly. As the owner of your business, you're solely responsible for its success or failure.

Consider using one or more of these eight funding options to increase your chances of success.

Related: Want to Make More Money in Real Estate Development? Use AI.

1. Maintain an income bridge

If you have a job, don't be in a hurry to quit. Use your current income to help get your real estate business off the ground. Or you might start a side hustle and save the money you earn for your new venture.

Another option is to work part- or full-time in your chosen real estate field. For instance, if you want to go into sales, you could work as an assistant for a successful agent. That would allow you to maintain an income and learn about your future career.

2. Use your savings

Tapping your savings is the easiest way to finance your real estate career. It may take longer to save enough money to get started, but the upside is that you won't give up any control or accumulate debt.

3. Liquidate valuable assets

If you're willing to sell valuable assets, such as real estate, vehicles, jewelry, antiques or investments, they could be a funding source for your real estate career. While retirement account balances might look tempting, be aware of the downsides of tapping them. With most retirement accounts, such as a 401(k) or IRA, you're restricted from taking early withdrawals and penalized if you're younger than age 59.5.

For traditional accounts, withdrawals are subject to income taxes plus an additional 10% penalty. If you have a Roth account, they offer more flexibility for withdrawing contributions that were previously taxed. However, draining your retirement account is typically a bad idea because it jeopardizes your future financial security.

4. Borrow from yourself

When you don't have any savings or assets to fund your real estate business, another option is to borrow from yourself. For instance, you might use the equity in your home to qualify for a home equity line of credit (HELOC) or a home equity loan. They typically require at least 20% equity but come with low interest rates.

Credit cards charge relatively high interest rates, but offer an easy way to finance the expenses required to launch your business. If you will carry a balance for the foreseeable future, use a personal or business card with the lowest rate possible so you can reduce interest charges. Getting a low-rate personal loan may be another option to fund your real estate career.

If your retirement plan allows a 401(k) loan, you can borrow up to 50% of your balance up to $50,000 with a five-year repayment period, including interest. Again, tapping a retirement account should only be a financing option of last resort.

5. Take a loan from friends or family

Many small business owners get started by taking funding from friends or family who can give you a loan. While they may offer flexible repayment terms or a low-interest rate, this option comes with risks if it jeopardizes your relationship.

Carefully consider what would happen if your real estate venture fails or it takes you much longer than expected to repay the loan. It's essential to document the terms of a loan from family or friends, so there aren't any misunderstandings later on.

6. Apply for a business loan

Many banks and credit unions offer business loans to start or expand your venture. Getting a business loan may require you to have good credit, collateral and a business plan with income and expense projections. Or you may need a co-signer with good credit who agrees to be fully responsible for the debt.

If you need a loan with fewer financial requirements, consider applying for a Small Business Administration (SBA) loan. They guarantee repayment to institutions that underwrite loans for entrepreneurs, making you a less risky borrower. SBA.gov has a list of lenders that offer SBA-guaranteed loans.

7. Get a business line of credit

A business line of credit from a bank or credit union allows you to tap funds up to a limit when you need them for your business. As you repay amounts withdrawn plus interest, your credit line increases to the original amount, which you can continue to use.

A credit line is one of the most flexible ways to fund your startup but qualifying may require good credit or collateral.

Related: 7 Quick Ways to Make Money Investing $1,000

8. Get partner financing

Suppose you're interested in having a partner or working with a complementary business, such as a mortgage broker, who could benefit from your real estate business. In that case, they could be a funding source and may also offer services, expertise or a network that would boost your success.

Once you know you want a real estate career, start calculating your startup expenses and saving money. Do your homework to figure out which funding sources you can rely on to launch your new business successfully.

Wavy Line
Laura D. Adams

Entrepreneur Leadership Network Contributor

Award-Winning Financial Author, Podcaster & Spokesperson

Laura Adams, MBA, is one of the nation's leading personal finance and small business authorities. She's an award-winning author, speaker and host of the top-rated 'Money Girl' podcast since 2008. Laura is an on-camera financial spokesperson, and her expert advice is frequently quoted in the media.

Editor's Pick

She's Been Coding Since Age 7 and Presented Her Life-Saving App to Tim Cook Last Year. Now 17, She's on Track to Solve Even Bigger Problems.
I Helped Grow 4 Unicorns Over 10 Years That Generated $18 Billion in Online Revenues. Here's What I've Learned.
Want to Break Bad Habits and Supercharge Your Business? Use This Technique.
Don't Have Any Clients But Need Customer Testimonials? Follow These 3 Tricks To Boost Your Rep.
Why Are Some Wines More Expensive Than Others? A Top Winemaker Gives a Full-Bodied Explanation.

Related Topics


The Return to Office Movement is Causing a Mental Health Crisis. Employers Are Part of The Problem — But They Can Be Part of The Solution.

Employee mental health substantially worsened with the return to office demands, and it's causing disengagement and low morale. The solution demanded by employees is the answer.

Business News

California Woman Arrested For $60 Million Postal Service Scam

Lijuan "Angela" Chen faces two charges that each carry a maximum sentence of five years in prison.

Business News

The 'Barbie' Movie May Have Caused A Global Pink Paint Shortage

The long-anticipated film is slated to hit theaters later this summer.

Business News

A Wegmans Employee Allegedly Stole Over $500,000 from the Company

Alicia Torres pleaded guilty to crimes carried out over nine years while working at Wegmans in Webster, New York.

Growing a Business

How to Harness the Power of Data Analytics for Business Growth

To thrive in the competitive landscape, entrepreneurs must understand and leverage the power of data analytics.