Coming up with money for a down payment and closing costs for a property is one of the first considerations both a buyer and a lender address. How much money is needed in order to get a loan? The financing investment real estateprimary location is from a buyer’s checking or savings account. Yet there is another way, known to few, to raise funds for the purpose of investing in real estate.

 First, any funds used in a real estate transaction cannot be drawn on an unsecured account. That means a bank won’t allow a cash advance on a couple of credit cards to be used in a real estate transaction or otherwise borrowed in any fashion not secured by property the borrower owns.

The borrower can sell assets to raise money. The asset can be another investment property or even an automobile or an expensive watch. The key here is that the asset must be able to be appraised by an independent, qualified appraiser.

In the example of an automobile, it’s easy for a bank to look up the value of a car. A car might appraise at $20,000 retail and the bank won’t get suspicious if the $20,000 suddenly shows up in the borrower’s bank account. To validate that however, the bank will want to see a bill of sale and a copy of the title that shows the borrower sold the car. If the car is worth $20,000 and there’s a new $35,000 deposit, the bank won’t think the borrower is just a savvy car salesman but find out where the extra $15,000 came from. If it’s borrowed from someone, the funds can’t be used.

If it’s appraisable, it can be sold. Even a 1957 Topps Mickey Mantle baseball card in mint condition can be used. No, you won’t bring your card to the closing table, but you will have an appraisal and a paper trail documenting the sale as well as the deposit in your bank.

Is selling baseball cards or automobiles a common way to raise real estate investment funds? No, not really. But it’s possible.