I frequently receive this question from real estate investors and business owners: “How do the wealthy fund deals without begging a bank?” The truth is, you don’t have to rely on traditional mortgage loans, banks, or higher interest rates to grow your portfolio. You can utilize proven alternatives to secure financing for real estate investments without the typical red tape.

Today, lenders are tightening requirements. Rising purchase prices, tighter debt-to-income rules, and rigid mortgage products make it harder to secure the right loan for your deal. FHA loans and fixed-rate mortgages are still viable options in some cases, but savvy investors prefer other financing options that offer faster access to cash and greater long-term control.

You can create your own liquidity and control your own terms using tools you already have access to. These strategies provide investors with funding for a range of real estate investments, including rental properties, single-family homes, and commercial properties.

Below are three legitimate, time-tested strategies I’ve used—and seen clients use—to finance investments on their own terms. None of these are gimmicks. When structured correctly, they provide you with control, speed, privacy, and, in many cases, tax advantages.

Prefer to watch? I walk through each strategy with simple visuals—watch the video now and follow along.

What Does “Being Your Own Bank” Mean for Investors?

Being your own bank is about utilizing your own resources—not relying on traditional banks—to finance opportunities. You skip mortgage brokers, high interest rates, and complex approvals by using tools you already control.

This strategy becomes especially powerful when you invest in real estate, as timing is crucial to success. When you compete for a distressed single-family home or scale into commercial property, quick access to cash can mean the difference between winning and losing the deal.

The wealthy have relied on these methods for decades to move money through their businesses, rental properties, and investments. They understand that financing should be integrated into the larger investment strategy, not a hindrance.

What Are the Three Main Ways to Be Your Own Bank?

There are three proven strategies for real estate investing funding options:

1. Cash-Value Life Insurance (IUL or Whole Life under §7702)
   
2. 401(k) Loans (if the plan allows it—not IRAs)
   
3. Business or Entity Lending (your company lending to you or another entity you own)

Investors can utilize these strategies to cover the purchase price, manage property expenses, or support a broader investment strategy.

How Can Cash-Value Life Insurance Create Liquidity?

A properly designed Indexed Universal Life (IUL) or Whole Life policy can become a personal financing tool. By overfunding the premiums, you build cash value that grows tax-deferred. You can then borrow against this value when opportunities arise—similar to other types of real estate financing.

Benefits include:

• No credit checks or bank approval
  
• Tax-advantaged loans (structured properly, they’re generally tax-free)
  
• Continued compounding—your cash value grows even while you borrow against it
  
• Flexibility—you decide repayment terms

Practical example: Imagine an investor using cash-value borrowing to put $100,000 into a down payment for a small apartment building. 

Instead of taking on a second mortgage with a higher interest rate, the investor taps into their policy loan. The policy continues to grow tax-deferred, and rental income from the property covers the repayment. The result? Liquidity, control, and preserved compounding.

When you pass away, the death benefit pays off any outstanding loans, and your heirs receive the remaining balance, tax-free. The key is to design the policy correctly, because many agents sell commission-heavy setups that don’t perform well.

This method can provide funds for real estate investing without relying on FHA loans, fixed-rate mortgages, or traditional banks.

How Can I Use My Retirement Plans to Lend to Me?

Many 401(k) plans—and Solo 401(k) plans—allow loans of up to $50,000 or 50% of the vested balance, whichever is less. Unlike a distribution, this is a loan, so you don’t trigger taxes or penalties. You repay the loan with interest, but that interest is reinvested in your own account.

Why this works:

• Lower interest rates than credit cards or hard money loans
  
• Payments go back to your retirement account
  
• Fast access to cash for short-term needs

Practical example: A small business owner needs $40,000 to close on a single-family home rental property. Instead of applying for a mortgage loan with higher interest rates, they borrow from their 401(k). Rental income pays back the loan over five years, while the remaining 401(k) balance continues to grow in the market.

This strategy is especially effective for investors trying to raise money for real estate investing without waiting for bank approval. Investors often use it to fund rental properties, manage the purchase price of income-producing assets, or cover short-term property management costs.

How Can Business or Entity Lending Work for Investors?

If you own a closely held business—LLC, S-Corp, or C-Corp—it can lend money directly to you or to another entity you control. This way, the interest income stays inside your ecosystem, while the borrowing entity may deduct the expense.

To do this properly, you need:

• A promissory note with clear terms
  
• Commercially reasonable interest rates (at least AFR)
  
• Payment schedules that are followed
  
• Collateral (such as a lien on property) for extra protection

Practical example: An investor holds cash in a Wyoming LLC. Instead of moving money directly into a fix-and-flip project (which carries risk), they structure it as a formal loan to their deal-specific LLC. The LLC pays interest, creating a paper trail. If the flip fails, the holding entity is a secured creditor, protecting assets.

This approach offers a smart solution for securing financing for real estate investments when traditional banks may not understand or support your deal. It also works well for larger projects, such as commercial property or even diversification into real estate investment trusts (REITs).

What Tools Do Most Investors Miss?

Beyond the three main methods, there are two overlooked real estate investing funding options worth noting:

• Home Equity Line of Credit (HELOC): Borrow against equity in your primary residence or rental properties. If investors use the funds for investments, they can generally deduct the interest against that activity. A HELOC can also help you close faster than waiting on traditional mortgage loans or FHA loans.
  
• Securities-Backed Line of Credit (SBLOC): If you own a portfolio of REITs or blue-chip stocks and bonds, most major brokerages allow you to borrow against it at competitive rates. Your portfolio continues working for you while you access quick liquidity—ideal when you want to expand into types of real estate like commercial property or single-family homes.

How Do I Choose the Right Strategy?

Each method has a place, depending on your goals:

• For long-term, tax-advantaged growth and flexibility → Cash-Value Life Insurance
  
• For short-term cash needs without tax consequences → 401(k) Loan
  
• For keeping capital within your own entities and structures → Business Lending
  
• For quick liquidity from existing assets → HELOC or SBLOC

Think about your broader investment strategy, the type of loan that best fits your deal, and the expected return on investment.

Your Next Move Toward Smarter Investment Funding

The wealthy don’t let money sit idle—they circulate it. By setting up these strategies in advance, you’ll always have funding for real estate investments ready when opportunities come up.

Whether you’re buying rental properties, expanding into commercial property, or investing in REITs, the right financing options can increase your return on investment and keep your capital protected. Knowing how to get financing for real estate investments—outside of banks and traditional mortgage loans—gives you more control over your investment strategy.

If you’d like to see how these approaches fit your unique situation, book a free Strategy Session to get one-on-one guidance on structuring your own “bank”.

Make smart decisions, and keep more of what you make.