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Showing posts with label Arizona Hard Money. Show all posts
Showing posts with label Arizona Hard Money. Show all posts

Sunday, August 2, 2020

The Seller Financing Real Estate Option You Cannot Ignore

Have you ever found yourself out of financing options and wondering where the capital for your next deal will come from? Do you feel as if you have exhausted all your options? Do not worry, you are not alone. Far too many people simply do not realize the sheer volume of financing options made available to them at any given point in time. If you find yourself out of options, there is a good chance you have not looked everywhere. Do not ignore the one seller financing real estate option that could save your next deal: “subject to.”

Few things are more important to today’s real estate investors than constant, reliable access to capital. Outside of the actual knowledge required to run a competent real estate business and the relationships you make along the way, nothing is more valuable than the ability to finance a deal in a moment’s notice. After all, what is financing if not for a tool to facilitate each deal?

It is worth noting, however, that to retain the ability to finance a deal whenever the situation calls for it, you must have options. If for nothing else, real estate is a numbers game; the more financing options you have at your disposal, the more likely you are to receive the leverage you require. I maintain that those investors with the easiest access to capital are also those who will have a significant advantage over the competition, but I digress. Not all financing options are created equal, nor are they from the most obvious originators. However, those that not only know how to identify a good opportunity, but also take advantage of it, will find that the financial scale tips in their favor.

Whether you realize it or not, there are multiple financing options made available to savvy investors; you just need to know where they are and how to find them. Instead of relegating your search efforts to traditional financing, think outside of the box. There are a lot more options out there than institutional lenders and private money lenders. In fact, there is one financing option I don’t want investors to neglect: seller financing real estate.

As its name suggests, seller financing real estate will witness the seller play the role of the lender. In its simplest form, seller financing is a real estate agreement in which the financing provided to the buyer is offered by the seller. Often, seller financing real estate becomes an option when the buyer does not have the necessary credit to purchase a respective property. Provided the seller can offer terms both sides can agree upon, there is no reason seller financing real estate options cannot benefit everyone involved.

Provided the situation calls for it, seller financing can offer creative financing options for buyers, sellers, or even as a deal facilitator for other parties. There is no doubt about it: seller financing real estate has its place in the housing sector, and those that complement their existing financing options with it will find that buying a home is rarely ever out of reach.

”Subject To”: Your Best Seller Financing Real Estate Option

Before I get ahead of myself, it is worth noting that the following seller financing option falls under different naming conventions in different states. What someone may know in California as a “subject to” could be known as something different just one state over. That said, I highly recommend checking with a trusted legal advisor, accountant, and title company before you set out to acquire seller financing real estate options.

The most well-known, seller financing real estate option made available to buyers is known colloquially as the “subject to,” meaning the terms of the loan are subject to the seller’s existing mortgage. Otherwise known as “getting the deed,” “subject to seller” financing real estate options are probably the most well-known, but far from general knowledge. And since so few people know the ins and outs of a “subject to,” it is in your best interest to familiarize yourself with them. At the very least, it will give you one more option to choose from when the time comes to finance a property.

Typically, the seller will offer the buyer a Grant or Quitclaim Deed in exchange for some type of consideration (i.e. money, a note, or other assets). In exchange, the buyer is expected to put down “earnest money,” which is not usually a large sum of money; it is just a gesture to show your interest. In exchange, the borrower essentially takes over the payments of the existing mortgage. What is more, the seller will maintain the loan liability until all obligations have been met. The original terms of the note will stay the same, including the name on the loan it was originated for.

I want to make it abundantly clear; you are not assuming the loan. The terms you decide on are strictly between you and the seller, so long as they comply with the terms that were set forth in the original loan.

In the event you decide to pursue a “subject to” seller financing real estate option make sure the title is free and clear of any discrepancies. Hire a title officer to be certain that the home in question is void of liens against the property and that could cause problems down the road. Only once you are certain that there is nothing that could stall the sales process, or even call into question the real owner of the property, can I recommend moving forward with a “subject to.”

Seller financing real estate options are not as well-known as traditional financing options, but they are nonetheless an option. In fact, there are times when “subject to” financing options just make more sense for everyone involved. So long as everyone agrees to the terms, you may find that seller financing is the best way to go to acquire your next deal. Of course, mind due diligence and make certain that it is your best option, but do not simply ignore it; you could find it to be extremely beneficial.

 

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

NMLS 1057378 | AZMB 0923961 | MLO 1057378 
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027 
111 Congress Ave | Austin | Texas | 78701 
About:  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. 
© 2019 Level 4 Funding LLC. All Rights Reserved.

Copyright | Privacy Policy | *Terms & Conditions

       

Tuesday, July 21, 2020

Become A Private Money Lender: Tips From The Pros

Simply put private money lending allows you to act as the bank for other investors.

Rather than directly purchasing assets, you get the opportunity to fund those owned by colleagues and partners. By now you likely realize how beneficial this set up can be. However, there are a few more things you should know before getting started. Read through the following tips before taking on your first deal as a private money lender:

Start Out Small: Identify a range you are comfortable working with, and stick to it. The number one mistake private money lenders make when starting out is spreading themselves too thin. Assess your finances and your preferred level of risk and create clear guidelines for potential projects. If someone approaches you searching for more than you want to offer, do not be afraid to refer them elsewhere.

  •          Find A Good Attorney: Becoming a private money lender does not make you a lawyer. You will still need help when it comes to negotiating and reviewing contracts. Additionally, if you start a private money lending business there are several legal protections you need to have in place before getting started. Find a qualified real estate attorney in your area and bring them on to your team. Their role in your company will be invaluable over time.
  •          Work Locally: There are profitable real estate deals all over the country; however, there are also deals right under your nose. If you decide to start your private money lending business locally, you can meet face to face with investors. Additionally, you will likely be more available for communications and future investment options. Do not underestimate the potential of your own market, you never know what kind of deals may come your way. You can always expand in the future.
  •          Be Transparent: Avoid inflating your portfolio or background to attract potential investments. No matter what point you are at in your investing career, let your work speak for itself. You do not want to misrepresent yourself or your lending business. Always maintain transparency and stay true to your mission and values.
  •          Do not Forget About Yourself: Remember, just because you are not purchasing assets directly does not mean you aren’t an investor. Continue your professional and financial education even if you opt for the role of lender. You still need to stay on top of market trends, financial news and other factors impacting the real estate world. While you don’t have a hands-on role in the investments you finance, you still need to have a strong business acumen.
  •          Learn The Subject Matter: Review the types of borrowers listed above and familiarize yourself with the different deal types. Learn what factors go into a successful rehab, buy, and hold or rental property. That way when a borrower pitches a deal you know how to evaluate it for yourself. Obviously, they are going to paint the investment in a good light, but is it profitable? To be a successful private money lender it is crucial to understand exactly what goes on in the niche you choose to invest in.

What Is Hard Money Lending

Hard money lending is another alternative to traditional lending sources and allows borrowers to use the investment (in many cases a property) as collateral on the loan. While many lending sources rely on a borrower’s credit history, hard money lending relies on the asset in question. Hard money lending will typically require higher interest fees than traditional loans but can provide borrowers with increased access to capital and a more lenient approval process. Investors with low credit and high equity in a property will often turn to hard money for funding. Additionally, property owners at risk of foreclosure may also utilize hard money loans.

How To Become A Hard Money Lender

Hard money lending can represent a unique opportunity for investors with extra capital on their hands. Though, with any financial decision it is important to mind due diligence and premeditate any potential risks. If you are interested in becoming a hard money lender, here are a few steps you can follow:

  1.        Name your business and create your company structure.
  2.        Set up an online presence for your business.
  3.        Seek legal counseling on the creation of a limited liability company check regulations.
  4.        Investigate potential investment opportunities.
  5.        Make a business plan and draft the criteria of future loans.
  6.        Project the future financial outcome of any potential loans.
  7.        Launch your hard money lending business.
  8.        Pros Of Hard Money Lending

Hard money lending gives investors the chance to stay active in real estate, without necessarily adding a property to their portfolios. Some hard money lenders may never purchase a property themselves at all. This can be a huge perk for anyone without the time and resources to actually acquire a real estate deal, as it allows lenders to tap into the lucrative potential of real estate without “getting their hands dirty” so to speak.

Another major benefit of hard money lending is the degree of control it offers. Hard money lenders get the final say in who they work with and on what terms. Anyone who has purchased a piece of real estate likely remembers the process of applying for funds, waiting on application approvals, and going through negotiations. Being a hard money lender puts you in the driver’s seat—and that is quite an attractive perk for many.

Cons Of Hard Money Lending

With any financial opportunity, there are going to be cons involved. For those interested in hard money lending, the most obvious challenge is coming up with enough capital to get started. The amount of funds required can serve as a steep barrier to entry, but it is important to remember that real estate offers a great way in. Investors can work their way up by managing successful real estate deals themselves; over time they can generate the funds necessary to start lending.

Hard money lending also has an inherent degree of risk for the lender.

By operating outside of the traditional loan application process that big banks use, hard money lenders can truly choose who they work with. This means taking a risk on an investor who may not be approved by some standards. To counteract this risk, hard money lenders must come up with standards of their own. Lenders should be prepared to research investors, properties, and ultimately trust their gut feeling about a potential candidate.

Summary

Private money lending can represent an attractive opportunity for both parties involved. Investors seeking alternative financing sources will find the benefits include a faster approval process and increased access to funding. On the other hand, those lending may find they have unique access to potential investments and deals. No matter which side of the transaction you are on, private money lending is a viable option for expanding your financial portfolio and wealth building.

Is a lack of funds keeping you from investing in real estate? Do not let it! Give us a call.

If You Are Not Using Level 4 Funding, You’re
Probably Paying Way Too Much

 

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

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About:  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.
© 2019 Level 4 Funding LLC. All Rights Reserved.

Copyright | Privacy Policy | *Terms & Conditions

Private Money Lending Guide: How To Get Started

Investing in real estate is essentially one of the smartest and safest strategies to promote wealth building.

With the proper foundation and knowledge, investing in real estate can be highly lucrative for anyone. But let us be honest, you already knew that. Of interest, however, is what an investor can do with the money they make from a profitable career.

While a portion of profits will undoubtedly be allocated to the lifestyle of their choice, investors are advised to be smart with their money. Of course, you can reinvest into another property, but if you are looking for an alternative there may be one option you have not considered yet: private money lending

Investors who have the funds to do so should consider private money lending in real estate. This process offers the same type of underlying security and profit potential as rehabbing or wholesaling, but without acquiring new properties.

What Is Private Money Lending?

Private money lending is when individuals lend their own capital to other investors or professionally managed real estate funds, while securing said loan with a mortgage against real estate. Essentially, private money lending serves as an alternative to traditional lending institutions, like big banks.

As rookie investors gain experience, they strive to aim higher. Leaving your hard-earned money in a savings account is no way to protect and grow your assets. At the end of the day, private money lending allows you to secure a loan with real estate that is worth much more than the loan. In some ways, this process can be less risky than owning real estate. That is why it’s important to familiarize yourself with the best real estate financing options available to today’s investors.

In the past, real estate financing typically came from banks, government agencies, insurance companies, and pension funds. However, with a list of strict requirements and a timeline not conducive to the average real estate investor, a need for alternative lending sources quickly developed. At the same time, it became obvious to those with appropriate funds that their money could better serve investors than large institutions. Now, private money lending is a critical component to the real estate investment industry. In fact, its presence makes it more possible for the average investor to run and maintain a sustainable career.

In case you were unaware, there are several benefits involved for those who choose to lend private money as well. If done correctly, offering alternative real estate financing options can mitigate risk while simultaneously establishing wealth. Of course, this is not a path for everyone. You need to ask yourself if you can afford to do so. Having a little extra money in the bank does not necessarily mean you should throw it at the first investor who comes your way. If you are equipped to mitigate potential risks and take advantage of the opportunities that present themselves, private money lending may warrant your consideration.

You may want to consider private money lending if one of the following applies to you:

·         You are a real estate investor looking to expand your portfolio.

·         You are a doctor, lawyer, CEO, or professional of another kind who has a great income or a surplus of cash.

·         You have a sizable retirement savings account.

·         You are a retiree looking for a passive income investment.

·         You are owner of an estate or other trust fund.

·         You are a tech entrepreneur who owns a successful startup.

·         You are a lottery winner.

·         You want to and can help a friend or family member.

Still on the fence? Don’t worry; the following will answer any questions or concerns you may have about pursuing a private money lending business:


The Anatomy Of A Private Money Loan

The concept of a private money loan is relatively simple, three elements are required for a loan of this nature to transpire: a borrower, a lender, and a lot of paperwork.

For all intents and purposes, private money lending is perhaps your best chance to invest in real estate with no money of your own. If for nothing else, private money loans can provide for investors in need. While they seem to serve the same purpose as traditional lending institutions, there are several key differences. Private money loans typically charge higher rates than banks, but they are also more available in cases an average bank would pass on. Additionally, banks and other financial institutions typically do not provide the same combination of speed and transparency in the decision-making process.

How To Become a Private Money Lender

As I mentioned above, private money lending can offer several benefits for everyone involved. It is not uncommon for investors to eventually expand into private money lending themselves due to these benefits. If you are interested in private money lending, there are a few steps you can follow:

1.      Establish your business and obtain the required insurance.

2.      Meet with a lawyer to create your company structure and review regulations.

3.      Identify your preferred lending focus.

4.      Join a peer to peer lending platform or network to find possible investments.

5.      Evaluate any potential clients by calculating potential returns and risk levels.

6.      Start your business in private money lending.

Private Money Lending: How To Identify Borrowers

The concept of private money lending is relatively simple: without money, real estate investing does not exist. Money, like in every other industry, is the lifeblood of an investor. Real estate investors need to actively work on securing private money loans to fund their deals. Often, the average investor isn’t capable of funding a deal with their own money. Moreover, even if the funds are readily available, investors will seek the assistance of private money. Regardless of a investor’s situation, there is a particular likelihood of them needing private money assistance. Instead of having to pool money or stretch every dollar, investors are given more options to grow their business with the use of private money.

Perhaps even more importantly, is the speed and efficiency in which private money may be obtained. The speed of implementation is critical to an investor, and it can mean the difference between closing on a deal and losing one. Having the money in a timely manner can make it that much easier to close on a deal.

With private money lending, you will be confronted with several types of borrowers. While each is unique, they are all looking for the same thing. Here are the four types of borrowers you may encounter:

·         Rehab/Sell: This type of investor will typically purchase a residential property and complete renovations with the intention of reselling it once the project is complete. Borrowers in this sector find private money attractive because conventional banks will often not lend to properties in poor condition. Perhaps even more importantly, access to private money is more conducive to a timely and profitable flip.

·         Rehab/Rent: These investors typically purchase a residential property and complete renovations with the intention of renting the property for cash flow purposes. These borrowers find private money attractive for the same reasons as investors in the rehab/sell category.

·         Builders/Developers: Builders and developers will purchase vacant land to permit and develop into residential or commercial use. Borrowers in this sector are interested in private money primarily based on the speed with which the funds can be available. Also, many banks will not lend on speculative development.

·         Commercial Investors: This population of investors may seek to use private money as a “bridge loan” for a commercial property when a conventional bank will not lend on an un-stabilized asset.

Money Lending: How To Get Paid

Private money lending is attractive because of the flexibility it offers, not only to borrowers but to lenders as well. You see, with a traditional loan lender will generate income through interest payments made by the borrower. Private loans, on the other hand, allow lenders to negotiate exactly how (and when) they will be paid back for the loan. This opportunity opens several perks not traditionally offered to investors. Read through the following agreements to learn more about making money as a private lender.

·         Joint Ventures: As a private money lender, a profit split can be one of the most attractive options for financing an investment. Investors can negotiate to a receive a percentage of the final profits in this type of agreement. The amount will vary based on the contract and the investment, though it could be quite profitable. In some cases, private money lenders will even find borrowers who propose this option. Just make sure you believe in the potential success of the deal and you are all set.

·         Exit Fees: This loan structure requires the borrower to pay a predetermined amount at the end of the loan term. The exit fee is often negotiated as a percentage of the overall price of the investment. In some cases, lenders may even negotiate an increasing exit fee that changes depending on when the loan is paid in full. For example, if the borrower needed a few extra months to repay the loan, then they would pay a larger exit fee.

·         Interest Payments: As I mentioned above, interest payments are one of several ways to generate income from a private money loan. In fact, this is the most common set up in private money. Lenders can set an interest rate at the time of the loan approval and sit back and wait for the money to arrive. Typically, private money loans are associated with higher interest rates than other loans, making this a particularly attractive arrangement for lenders.

·         Points: Points are essentially fees paid by borrowers in exchange for lower interest rates. Points are calculated as percentages of the overall loan, with one point referring to one percent of the loan amount. The reason some lenders prefer this system is that points allow them to be paid in larger sums, with additional interest payments to follow. Often, points are paid at the beginning of the loan term and are suggested by the borrower as an incentive for granting the loan.

 

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

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About:  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.
© 2019 Level 4 Funding LLC. All Rights Reserved.

Copyright | Privacy Policy | *Terms & Conditions

Tuesday, June 4, 2019

Why Savvy Millennials are Turning to Hard Money Lenders

Millennials have struggles prior generations didn’t. However, many are now making their dreams come true with the help of Arizona hard money lenders anyway.

Millennials often get a bad rap for their tendency to stay at home with their parents longer than prior generations have, plus this is the same generation that popularized ridesharing and home-sharing. Necessity is the mother of invention and, undeniably, has caused people in this age group to adapt in ways their parents and grandparents didn’t.

Research from Business Insider indicates that wages are up 67% since 1970, which sounds great until you realize that rent costs have risen nearly 100% in the same time period and tuition at public colleges have jumped more than 200% since 1982. Not surprisingly, the credit bureau Experian now reports millennials have more than $80,000 in debt on average. A staggering amount of this is student loan debts, but credit card debt accounts for a large portion of it too. Credit scores are suffering as well, with the average millennial only managing to obtain a “Fair” FICO score, sitting a significant number of points behind national averages for all age groups. This makes it hard to cover daily living expenses and get loans, which makes it all but impossible to get ahead.

These are some big challenges which have caused younger Americans to delay milestones such as homeownership and starting a family. It has also led to a rise in sharing apps, like Uber and Airbnb. The savviest millennials, however, are eschewing the norms altogether though. They’re working with Arizona hard money lenders in a number of areas to improve their lives today and get a head start on growing their long-term wealth.

Side Hustles Funded by Alternative Lending Give Millennials a Helping Hand

One of the key components for millennials who get ahead in today’s economy is having a side hustle, which can often be financed by hard money lenders. The ideal side hustle can be carried out without quitting one’s day job and involves skills which coincide with skills the individual already has. Current trends include house flipping and home rehabs, running an Airbnb or other vacation home, and starting up grow operations.

A broker can help you even if you’ve got rotten credit!

Banks turn people down when they’ve got bad credit or are getting into certain types of businesses, but Arizona hard money lenders don’t. Instead, they look at the overall business plan, it’s potential profitability, the risk involved, and the skill of the entrepreneur. This makes it easy to get approval even if you haven’t been in business long, are struggling with student loan debt, or have rotten credit. If you’ve got a great idea for a side hustle, but can’t find the funding you need to get it off the ground, speak with a broker who specializes in alternative lending and can match you with a private individual who has the cash to help you get started, knows the industry you’re getting into, and wants to help you succeed.

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Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Private Hard Money Lender
Tel: 623 582 4444 level4funding.com

NMLS 1057378 | AZMB 0923961 | MLO 105737
22601 N 19th Ave Suite 112 Phoenix AZ 85027

What do borrowers say about us?

“Top notch loan broker. who was awesome, quick, prompt, and most importantly, delivered. I would say don't even waste your time with another broker - these folks get the deal done, period. As a lawyer, they have helped me and many of my clients with a can-do attitude, and professionalism that is unmatched. A definite recommendation.” Paul Nordini

“I was working with a hard money lender (OF) for the past ten days. 24 hours before my loan was supposed to close they called me and told me they were lowering my loan amount by 15%. I called Mark G at Level 4 Funding and told him the situation. If you want work with someone honest and professional call Level 4 Funding today.” Roger Johanson

“After hearing, the good things about this company, I think they are on top of their game. I will keep recommending people I know in Arizona to level 4 Funding.” Rick Carrol

"I was scared and not certain about the deals, but when I talked to my attorney I realized the investment was safe and secured, I was ready to go” David F.

What is Private Hard Money?

It is usually a loan from a private person/individual not a bank for financial institution.  Yes, there are people with a boat load of money in the bank and they want to lend it to you.  This is legal, and it happens all the time. It’s their money and they will make a deal with you.  Its easier and faster because the person making the decision is the person who has the money in their possession. It’s called hard money loan because when the loan is made, the collateral backing up the promise to pay by the borrowers is a hard asset. Typically, a piece of real estate or something of value. It’s a promise to pay, backed up by the borrower’s hard asset. So, its private money from an individual backed up by a hard asset. Which means if the borrowers do not pay, the lender goes and “grabs the hard asset” and the borrower loses the asset (home).

Things to Consider When Obtaining Hard Money Loans

Are you wondering what Arizona hard money loans are and where they fit into your investment strategy? Here are the basics of these types of loans and what they can do for you as an investor.
This type of loan is an asset-based loan.  The borrower wishes to secure a loan backed by real property.  Private investors and companies are typical issuers of these loans.  Unlike banks, Arizona hard money loans can carry higher interest rates.  These interest rates are higher than a convention real estate loan because of the higher risk and the duration of the loan which is shorter than conventional real estate loans.

People using Arizona hard money loans are usually looking for funding for projects lasting from a few months to a few years.  The criteria for lending and borrower costs are similar to bridge loans. In fact, many hard money lenders specialize in bridge loans. Bridge loans are used for properties that are in transition and may not be able to qualify for traditional financing.  An example of a bridge loan is when a home buyer finds a new home they’d like to buy before their old home, which is on the market, sells.

Many hard money lenders will lend 65% to 75% of the current property value. The amount of the loan is determined by the loan to value or LTV. It is figured by the ratio of the loan amount divided by the value of the property. Arizona hard money loans are mainly used for commercial property.  These types of loans first started in the 1950s and have been growing in popularity.

Although mostly unregulated by state and federal laws, some restrictions on interest rates by states, commonly known as usury laws, prohibit hard money loans. Two of these states are Tennessee and Arkansas.

Federal Guidelines

Since the 2009 mortgage crisis and the passing of the Dodd-Frank Act, these loan programs have greatly expanded.  This is in part due to the strict regulations that were put on banks and lenders after the passing of this act. Truth in Lending and Dodd-Frank set out Federal guidelines for lenders, mortgage originators, and mortgage brokers requiring them to evaluate the borrower’s ability to repay the loan.  The ability to repay the loan is on the borrower’s primary residences. If the lender does not conduct the proper due diligence, they are faced with high fines for non-compliance.  Hard money lenders mostly lend on commercial loans or business purposes so that they can avoid non-compliance with TILA, HOEPA and Dodd-Frank guidelines.

Before any offer of financing, the lender will want to determine the LTV (loan to value).  The basis for the loan is the liquidation value of the collateral.

A BPO (Broker Price Opinion) or an independent appraisal by a licensed appraiser in the state that the property is located in, will value the property. Typical hard money loan interest rates range from 5% to 18%.  Despite these rates, investors often turn to them due to quick loan approvals, high flexibility, less documentation than conventional lenders, and offering the ability to put a bid on a property that may go quickly after hitting the market.



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


NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701  

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.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Thursday, November 8, 2018

HELPING YOU UNDERSTAND ARIZONA HARD MONEY LENDING


iStock_000002512608_LargeWhat exactly is an Arizona hard money lender? How are they different from a traditional bank loan? How can they help you?

You have heard the term, “Arizona hard money lender.” But, do you actually know what one is? Arizona hard money loans are asset-based loans. With this type of loan a borrower must have property that will secure the loan. A traditional bank loan can be a grueling, time consuming project; and you may have to wait a long period of time for approval. Also, with traditional bank loans, your credit is of utmost importance. There is no elaborate underwriting when it comes to these loans so developers find them useful for time-sensitive projects.

Arizona hard money loans are primarily used for short duration projects. These types of loans are typically used for purchasing real estate, improvements, renovations and construction. There are a variety of other reasons for these loans. Most reasons involve some type of improvement that will add value to a property.

Hard Money Lenders Approach

Arizona hard money lenders are more concerned with collateral; unlike traditional banks who routinely dig deep into a borrowers credit. The value of your collateral gives the lender security; it is more important than your financial situation. If you are unable to repay the lender they can take your collateral, sell it and get their money back. Lenders will lend the borrower as much as their property is worth based on the loan-to-value (LTV). The lender determines this by the ratio of the loan amount divided by the value of the property. These lenders are able to make much quicker decisions because they don’t have to investigate your entire financial life. The loan will be a much shorter duration than a traditional loan, usually lasting between 6 months and three years. Arizona hard money loans typically charge a higher interest rate than a traditional loan, ranging from 10% to 18%. Arizona hard money lenders are able to help many borrowers who don’t have perfect credit; they can also help borrowers who are having financial issues such as bankruptcy. As long as you have collateral that can be used as security, these lenders can work with you. Also, due to the absence of a complex underwriting, lenders can work with a borrower on repayment schedules. The flexibility of these asset-based loans can save many hungry borrowers.

Things to consider when deciding if a traditional bank loan or finding an Arizona hard money lender will work best for you.

Working with Arizona hard money lenders will benefit borrowers that are working on a short duration project, may not have perfect credit (or have some marks on their credit) or need quick financing and own assets that will cover their obligation in case they are unable to repay on time. These lenders can be found in organizations that specifically offer these loans. If a non-conforming loan will not work for your situation you may find the funding, you require through a Arizona hard money lender.

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

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701 

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.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Sunday, October 28, 2018

How To Understand House Flipping Loans


4page_img5-bigNot every loan works for every project so it is important that you understand all of the aspects of Arizona house flipping loans. This is a huge first step in a successful project.

Flipping houses can be a great business and a great way to build your personal wealth. But it can also be a very difficult business is you are not familiar with the financial needs and the criteria for that makes good house flipping loans. You will quickly learn that a traditional loan is not a good fit for most flippers. The biggest drawback on a traditional loan is the extended time frame to secure the loan. In addition, you need to have very good credit to qualify for most bank loans. But fortunately, there are much better solutions for your house flipping loans.

The best way to avoid all of the runaround and document requirements is to avoid the traditional lenders. Using a private lender is a lot faster and easier. The cost can be a little bit higher but in most cases, you can tailor the loan to meet all of your needs including a fast approval and funding process. These types of loans are called Arizona Hard Money Loans or asset-based loans and they are offered by a private lender or a small group of people who function together as a private lender.

The lenders are not looking at your credit history, income or even your credit score to decide if they are willing to loan you the money. For asset-based lending, the determining factor is the value of the property that you are buying. The lender requires that you use the property as collateral for the loan so that it is secured. All the lender is concerned about is that the value of the collateral is always greater than the balance of the loan.

Calculating the Amount of House Flipping Loans

Lenders who focus on these Arizona Hard Money Loans have a set loan to value ratio that they are willing to offer borrowers. The LTV is normally somewhere between 70% and 80% of the value of the property. There are two reasons for this choice. First, this assures the lender that the property will always be worth more than you owe in the event of a default on the loan. Second, the lender knows that you are very motivated to get the deal done as you have invested your own money in the project to reach the asking price. This is known as having some skin in the game and is a good motivator.

Know The Terms

Flipping houses in Arizona can be a great business and can grow very quickly if you are aware of the proper types of funding for these projects. In addition, you need to understand that the conveniences of hard money only come at a higher cost. So it is important that you find the best deal possible to begin your home flipping business and ensure your success.

Dennis DahlbeDennis Dahlber Broker Ri CEO Level 4 Funding LLCrg
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

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701 

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.© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions