If you’re thinking of buying a rental property and financing it rather than paying cash you’ve likely done your fair share of available financing and getting a good handle on how much cash you’ll need at the closing table. There are two primary sources for long term financing and they both require at5 sources for funds leasta 20 percent down payment, this on top of closing costs and reserve requirements.

That leaves many scrambling for funds to close if they’re not prepared. Here are some sources for funds that lenders will accept.

Personal Checking and Savings. The first choice when it comes to funds for most borrowers. Lenders will verify the funds deposited belong to the borrowers and come from a legitimate source. If there are two or more people on the account and only one is buying the house, the borrower can use his share but not the amounts that belong to others.

Business Checking Accounts.  This can be an option but lenders will ask for a letter from the company’s CPA that withdrawing business funds will not harm the operation of the company and the borrower has the authority to withdraw the funds.

Retirement Accounts. 401(k) accounts may be borrowed against, first timers can tap into an IRA without penalty and the funds must be sourced. Any withdrawal penalties will be deducted from the available amount.

Self-Directed IRAs.  A self-directed IRA account holder may use these funds at any time without penalty as long as the property is a rental and not a primary residence.

Sale of Property.  Any appraisable asset may be sold. The asset can be real estate, an automobile or anything of value that can be independently appraised. The lender will want to see evidence of value, the sale and the deposit of sale proceeds. It is also possible to borrow against such as asset while documenting the new note and being able to afford the monthly payments. Borrowing against credit cards or any unsecured loan is not allowed.

Investors shouldn’t have to search for funds to close but be part of a well thought out investment plan. However, sometimes an unexpected property pops up on the market that a little scrambling is sometimes necessary.