Learn To Be A Fix & Flip Investor: January 2019

Thursday, January 31, 2019

Why Borrowers Are Considering Commercial Texas Hard Money Lenders

Borrowers who are having trouble obtaining loans from traditional lenders often have to turn to other sources. Read more below to learn about untraditional lenders, and why borrowers are seeking alternative loan agreements.

Obtaining funding for a loan can be difficult. Factors vary for each individual, and depending on the requirements of the lender, obtaining funding isn’t always a simple process. More often than not, low credit score and a weak financial history makes for rejected loan appeals, causing borrowers to look elsewhere or cease searching.

Fortunately for borrowers serious about obtaining funding and working towards a stronger financial ground, other options are available. After being rejected by a traditional lender like a bank, borrowers often turn to commercial Texas Hard Money Lenders to obtain the funding they need.

Cons of Working with a Private Loan Investor

Private loan investors offer hard money. These lenders may be an alternative loan agency, a company, or a wealthy individual looking to make a profit. One thing to know is that not all private loan agencies are legit—and, if they are, they often have higher interest rates and the possibility of hidden fees within the loan agreement. Doing research into your commercial hard money lender is essential. There are many valid options but turning to an unreliable and predatory lender won’t help your case. Additionally, it is always a good idea to research their project history—what kinds of borrowers they have helped, and their success rate. If you fit into their category of borrowers, they are likely a great option for you. As long as you take into account the short repayment period and higher fees, it is likely you are eligible for a hard money loan and will find success obtaining funds.

Pros of Working with a Private Loan Investor

Though working with a private loan investor will require assurance, there are benefits to working with private investors. Unlike banks, they are able to approve a wider group of people because they consider the property’s collateral before they consider the borrower’s financial history. This does not mean they do not review your past finances. It just means that they are likely to approve someone with an imperfect credit score if they see value and potential profit in the loan investment. Not only are private investors able to approve more people, but they are able to approve them faster. Sometimes, the loan process can begin as soon as the day of—public lenders like banks are not able to do this. Public lenders usually need about a month to get started. The flexibility of private investors is seen in their ability to approve and their speed. Inherently, flexibility often leads to other things, like a transparent relationship and an individual experience. While hard money loans are expected to be paid on a short term time period, there is usually the ability to work with the lender and expand it, if necessary. Working with a commercial hard money lender has many benefits, and if you do your research to find a reliable local investor, it is likely you will find in them an alternative to traditional lenders.

Dennis Dahlber Broker Ri CEO Level 4 Funding LLC Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

How to Bridge the Gap with Arizona Bridge Loans

Obtaining funding for your next home can be extremely stressful, especially if you are struggling to sell your current home or wishing to move into your next home first. Fortunately, “bridging the gap” is a great option if you are in either of these situations.

“Bridging the gap” is another way to refer to swing loans or, more commonly, Arizona Bridge Loans. The referral to any references the ability to borrow using the down payment on your current home, with the intention of using it to purchase the next. It is an option that allows people the freedom of contingencies in contracts that require that the current home be sold first. The transitional metaphor of moving from one home to the next as such is seen in the word “bridge.”

Benefits of Arizona Bridge Loan include a lack of major transition period between buying and selling your home, without having to utilize a temporary living space. Freedom is also found in the ability to search for homes with no limitations or pressure when the ideal home is found. These loans are also common solutions for small renovations or relocations. These benefits to the borrowers are contrasted by the benefits to the lenders which include high interest rates and short-term, low-risk repayment.

How to Know What’s the Best Decision for You

Qualifying for these loans means having a great credit score and low debt-to-income ratio. If you meet these requirements, you should also consider these other factors before diving right in. Eligibility is great, but eligibility for the loan doesn’t cover a few other things, which includes the fact that you will have to pay a mortgage for two properties. Not only that, but they are expected to be paid off in 6 to 12 months, which is typical of short-term loan repayments. And, while loan interest rates vary from lender to lender, they are typically 2% higher than most on the market and will be affected by the home’s loan to value ratio LTV and your personal financial history. Doing research on the current real estate market will help you evaluate how your home will fare on it, though it should always be done anyway before making any fast decisions. It’s not unheard of for loan extensions to be offered, should your current home be struggling to be sold on the market.

Being Successful with Alternative Options

A lender for Arizona Bridge Loans can be found at your local bank or credit union. Alternative routes also include seeking out information for a 401 k or a home equity loan. Home equity loans are common solutions, despite the requirement of needing a high credit score and steady income. These loans work by taking a second mortgage on your home that is then used towards new loan funding. If you are seeking something with low interest rates, personal loans are a great option that can be combined with other types of loans if needed. Before making any fast decisions, it is important to thoroughly analyze all of your options and determine what short- and long-term goals you have that would be benefited by each type of loan option. If “bridging the gap” is not the right option for you, there are plenty of alternatives that promise success in various situations so that you can have your dream house.

Advantages of Commercial Texas Hard Money Lenders for Your First Fix and Flip

Choosing the next big investment is never easy—hours of binging HGTV doesn’t necessarily prepare you for what goes on behind the scenes. If you’re interested in learning more about the loan process for fixer uppers, pause HGTV and read more below!

It’s no question that the major personalities on HGTV today have the money to afford fixer uppers, with more than a little wiggle room for error. But what about the average person looking to break into the biz for the first time? Their wiggle room is certainly smaller, and their chances for error greater. So where do they go when they need to obtain funds fast for a fix and flip?

Oftentimes, people will turn to commercial Texas Hard Money Lenders. Commercial Texas Hard Money Lenders are untraditional alternatives to public lenders like banks and credit unions. What these untraditional, private investors do is evaluate the potential and collateral of the property. In this way, private investors are able to approve a wider range of people compared to public lenders because they highly consider the property’s potential profit line first. Though your financial history will be relevant to them, collateral comes first.

How Fixer Uppers Inherently Lend Themselves to Hard Money

Speed is one characteristic of hard money that can come in handy when obtaining a property off a competitive market. The ability to obtain the property with all of the ideal characteristics for a fixer upper will be ideal. Committing to a home that won’t provide any nasty surprises after the purchase will lead to more success in the long run. Being able to get funds fast may just allow you to get that ideal property for flipping. Commercial Hard Money Lenders allow for this and flexibility. Because they are more likely to approve you for a loan than a bank, it is also more likely that they will allow a little flexibility when it comes to repayment. The repayment period of hard money loans is short. This lends itself to fixer uppers because the goal is to fix, flip and sell quickly.

What You Need to Know Before You Move Forward with a Private Investor

While the short-repayment period and the fast funds make hard money a great option for people looking to flip, there are a few things to know about Texas Hard Money Lenders before diving in. First, Texas Hard Money Lenders have high interest rates. Their ability to approve a wider variety of borrowers is balanced by their higher interest rates. Coupled with a short-repayment period, this option may not be ideal for everyone, though there are benefits to consider. Second revolves around reliability. Reliable commercial Hard Money Lenders are out there, but so are unreliable agencies. Being confident that your lender supports the project and won’t pull out at the last minute is obviously going to be a concern to have. Researching their past clients and projects is one way to go about ensuring they are legit, but so is hiring a real estate attorney. A real estate attorney will be able to evaluate and determine if they are really a reputable agency and if they have any hidden fees and stipulations you may have missed. Doing thorough research will help you determine if Texas Hard Money Lenders are right for you and your personal financial situation, even though their process and typical benefits lend themselves to those fixing and flipping properties.

Do Private Money Lenders Work Like Traditional Loan Lenders?

Considering a private money lender is a common evaluation for anyone deciding on the best loan choice for them. It certainly was for Brianna and David when they didn’t qualify for a traditional public loan and learned the major differences between private and public lenders.

Brianna and David wanted to invest in a fixer upper. When they approached their local public lender, their nearby credit union, they found that they did not qualify for a major public loan. To do so, they needed a strong credit score and a solid debt to income ratio. Unfortunately, to seek out their dream of flipping a house, they would need to seek untraditional options.

Brianna and David were certainly a little wary of Colorado Hard Money Lenders—they were unsure what to expect, and the promise of an easy approval process made them suspicious. As they began to learn of their options, they became aware that private money lenders could offer a few things: money and speed.

Finding Success with a Hard Money Lender

Brianna and David didn’t rely on speed when it came to obtaining their loan. They weren’t working to prevent a foreclosure and their property wasn’t particularly competitive. Still, the prospect of speed was attractive. They found that their hard money lender could begin the loan process as soon as a day—something banks couldn’t get close to matching. Public lenders typically need a month to begin the loan process. As Brianna and David discussed prospects with their private money lender, they learned of their lender’s flexibility. For one, their lender could approve their loan request based on the potential of their property—and since the loan would be going toward a project that would be reaping benefits and a high probability of making a profit, they were able to qualify. Second, their lender was also open to expanding the terms of their loan agreement. Hard money loans work best with people seeking out funding for short-term projects, but they can sometimes be expanded with the right lender. Brianna and David were happy to learn their lender believed in their circumstances to support an extension.

Effects of Eligibility

Brianna and David were thrilled to come to an agreement with their private money lender. However, as they looked over the terms to the agreement, the major differences between a private and public lender were much more apparent. For example, private lenders have high fees and interest rates incorporated into the loan. This is something that banks do not do, and private lenders do this to weed out potential clients, and help ensure the reliability of their borrower, if it isn’t immediately reflected in their credit score or debt to income ratio. The high costs combined with the comparatively steep interest rates often weed out a lot of potential borrowers because, while the easy approval process may deem private lenders “affordable,” the hidden costs reveal they are not. Brianna and David weren’t thrilled about the fees, but found that, with some work, they could afford them provided their property didn’t come with any unfortunate surprises. Fortunately for Brianna and David, their hard money lender was a great option for their first fixer upper. Though it was costlier than they expected, they were able to complete their project successfully.

Wednesday, January 30, 2019

Why Colorado Private Money Lenders Can Get You Money Fast

Who are private money lenders—and should you borrow from one? Read more below to find out the advantages of their speed and if they are the best choice for you.

Private money lenders are untraditional and alternative options to public lenders. They usually consist of private companies and investors. Traditional public lenders usually consist of banks and credit unions. The process of borrowing from private and public lenders is a little different, based on the requirements each type have. Typically, people who cannot qualify for a loan with a private money lender will be referred to a private lender who offers hard money. Colorado Hard Money Lenders evaluate the value of the property first. Then, they evaluate the prospective borrower. Because of this, they are able to approve more people for loans than traditional public lenders. While they are able to provide a rapid approval that is unmatched by banks, there are a few things to know before committing to a private lender.

Expectations of Colorado Hard Money Lenders

Private money lenders are a great alternative option, but it is important to know that their speed is accompanied by high costs. The ability to approve borrowers with credit that doesn’t meet typical standards is paralleled by the assurance they provide themselves by requiring their own high rates. These rates can be 5 percent higher than those on the average loan market. Additionally, the short repayment period is something that should be considered heavily. In combination with the high rates, repayment may not be as feasible as you think. Hard money lends itself to short-term scenarios. So, even if you can get approved by a private lender while you are struggling to be approved by a bank, it doesn’t mean it’s the best option for you.

Evaluating Your Loan Eligibility Successfully

Even though private lenders offer many benefits, like speed and flexibility, it is important to understand how other factors may affect the balance of the lending process. For example, it’s important to know other situations people turn to hard money. They turn to hard money when they need it fast, but they also turn to it for short-term projects. These short-term projects should also have solid plans, with little wiggle room for wavering, so that if you are hit with the unexpected, you can afford it. If you are unsure if you’re a great candidate for a hard money loan from a private investor, you can always turn to a real estate attorney. Real estate attorneys can help you analyze the terms of the loan agreement so you’re understanding of all expectations, and any possible hidden fees or stipulations. This would be one great way of moving forward with a private lender confidently. If you are wary of the situation, it is likely that is not the best option for you. Colorado Hard Money Lenders are there to help make your dreams come true—you just have to put in the evaluation and research to know if they are the ones who will help provide you a happy ending, or another alternative option with similar benefits.

Can You Really Qualify for Texas Hard Money Loans?

Interested in obtaining funding with an alternative loan but unsure if it’s for you? Continue reading to learn more about how you can be successful with hard money, and if it is right for you.

Hard money loans are offered by untraditional lenders. Untraditional lenders are usually private companies and investors. Normally, a traditional loan can be obtained from a bank or credit union. However, because traditional lenders have qualification standards, not everyone can receive traditional loan funding. This is why many turn to Texas Hard Money Lenders, and why you may be interested in learning more about hard money yourself. Hard Money Lenders utilize the property’s potential when approving borrowers for loans. The value of the property, its potential profits, and collateral are the overall determining factors. And while financial history is important, it doesn’t play as big a factor as the property’s value will.

Qualifying for hard money loans will certainly be exciting, especially if you have been turned down in the past by other lenders. Though before moving forward, you will need to consider a few things before accepting and signing the terms to your loan agreement.

What to Know if You’re Eligible for Private Hard Money

Private lenders have high interest rates and loan fees that accompany the terms of private hard money. The rates can be as high as 15 percent and meant to protect the lender for possibly risky loans and unreliable lenders. It is not uncommon, either, to see ill-intentioned individuals hide under the premise of these loans. Doing your research and feeling confident in the reliability of your lender is going to be as important as proving yourself a reliable borrower. It’s not unheard of to have lenders pull deals out at the last minute. Understanding their past success with previous clients will give you an idea if you make a good fit with the kind of work they are intending to do, but you should also be aware of common situations when hard money is completely ideal.

Is Hard Money Right for You and Your Situation?

The short repayment period of hard money loans usually means it is most ideal for short-term projects. Examples of this include: renovating a fixer upper, obtaining money fast to prevent a home from foreclosing or to grab it quickly off of a competitive market. Fixer uppers are great for hard money because the loan can be used for renovations before the home is sold for a profit, in a very short-term scenario. Using the loan for something like the necessities of a rental property, which involves a profit after obtaining a tenant long-term, would not be ideal. 12 months are usually given for the repayment period, unless another deal is compromised with your lender. Timelines are extremely important. It’s one thing to obtain funding, but it’s another to not be able to work with the given circumstances of the agreement. Knowing how the timeline of hard money functions within your own personal timeline will determine if you will find success with hard money.

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