Learn To Be A Fix & Flip Investor: Arizona home loan

Showing posts with label Arizona home loan. Show all posts

Monday, April 23, 2018

Why you shouldn't just rely on appraisals when it comes to hard money

A traditional appraisal is usually the most crucial estimate of a properties value with a conventional mortgage. The situation can be more nuanced when it comes to hard money loans. There are additional factors that fall outside of the scope of an ordinary appraisal, and the amount of financing offered will depend on the valuation of your property. By having your an understanding of what a property might be worth you maximize your chances of qualifying for a more substantial loan.

The standard appraisal is a report given by a licensed professional and usually ranges between 5-70 pages in length. The report will detail information the appraiser used to justify their opinion about a properties market value. A more informal valuation is a broker price opinion, or BPO, which is much shorter than a detailed appraisal and is usually no more than 2-5 pages in length. The value of a BPO depends entirely on the individual broker. Another option is to commission a review of your initial appraisal by yet another appraiser to get a different perspective.

So why can't you solely rely on appraisals or other professional estimates? Appraising a property takes time and in some cases considerable resources. You also need to be aware of things that may fall outside the scope of a typical valuation if you want to qualify for a larger loan, especially when it comes to commercial properties.

When it comes to hard money loans, you benefit by going above and beyond the initial appraisal, especially when it comes to commercial real estate valuations

Having an understanding of what is property is worth is especially useful if you are dealing with commercial property.Know that anything that positively or negatively impacts a commercial properties ability to generate income will have a significant impact on its value.An ordinary appraiser might overlook the impact of a floor plan, the availability of parking or a properties accessibility in their estimate. The usual appraisal might also disregard the potential expense involved in bringing a property up to code or the cost of complying with environmental regulations.

It is vital to perform your own due diligence to see things an appraisal might have missed and to plan for any unforeseen expenses.With asset-based loans, the loan amount depends in most cases on the value of the underlying property. Having a thorough understanding of how your property is valued can help you qualify for a larger loan.

When it comes to hard money loans, always consider the future potential of your project to qualify for the largest loan

In all likelihood, an appraiser will underestimate a properties potential especially if you are renovating a distressed property. An appraiser will never attempt to estimate a properties value in the future, based on your renovations or pricing trends in the immediate area. Projecting the market value of a property is simply beyond the scope of an ordinary appraisal

It is up to you to perform own assessment when it comes to pricing trends in the immediate area, vacancy or occupancy rates, or any potential zoning changes in the future. Any of these factors could cause a property to rise or fall In value in the near future.

Entirely relying on an appraisal could blind you to a project's potential. Do your research and develop your understanding of specific things that could impact the value of your property in the future. You can thoughtfully discuss the potential of your project by performing your own due diligence, allowing you to qualify for the largest possible asset-based loan.

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Tuesday, April 17, 2018

Tactics to secure a larger hard money loan: estimate the ARV

A hard money loan (i.e.,an asset-based loan) is any loan secured by the value of an underlying asset. Most of these lenders will only give loans of up to 65 percent of an assets market value.

But what if you intend to renovate a distressed property which is significantly undervalued at the time purchase? To secure more in the way of financing you need to understand what your property worth is after you’ve repaired it (the after repair value, or ARV).

Asset-based lenders could offer more financing if you can demonstrate the potential of a project. However, to explain a project's potential you need to understand property valuations. Relying solely on appraisals will limit your understanding and wont serve you in the long run as a real-estate investor. Professional assessments are also expensive and time-consuming.

Your best bet is to develop your sense of what a property is worth by comparing your estimates with that of a licensed appraiser. Educating yourself this way will develop your understanding of property valuations. An excellent way to start training yourself when it comes to property values is to use the comparable sales method.

You can begin to estimate the ARV yourself by utilizing the comparable sales method, which could help you qualify for a larger hard money loan.

The first step is to assess your subject property, look at its location, what is the neighborhood like and what impact does this have on the properties value? Figure out the lot size and determine the condition of the exterior. Find out essential details about the property, its size in square feet and its amenities (i.e., Number of bedrooms and bathrooms).

Find 5 to 10 properties similar to your subject through local listings. Only consider properties that have sold within the last 3-6 months, are in the same location and have a similar size and similar amenities. It is crucial that you don't look at distressed properties. Remember you are trying to determine your properties potential after you have made renovations.

After you have enough comparable properties, consider the ones that are the most similar and find the properties with the highest and lowest selling price to estimate a range of value for your subject property. These numbers will give you a sense of what the property will sell for after you make your repairs. With this understanding, you can thoughtfully discuss the potential of your renovation project with a lender and qualify for the best loan.

You can secure a larger hard money loan if you can explain the potential of your project

Even the most informed estimate of a properties value is only an educated guess. If you rely solely on appraisals, you aren't building your knowledge of property valuations. Using a simple comparable sales method is an easy way to increase your understanding of property valuations and the after repair value of your property. Having this understanding builds your lenders confidence in your project and increases your eligibility for a larger loan.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Saturday, March 31, 2018

How to Benefit From Hard Money Loans

Though many borrowers are unfamiliar with the concept, hard money loans offer many benefits to certain borrowers. Understanding how these loans work can make them a great financial tool to have at your disposal.)

Hard money loans are simply short term loans which are secured by real estate. The loans are often referred to as non-conventional as they are provided by private lenders rather than traditional lenders or banks. Unlike the more traditional loans offered by banks, there are much less stringent requirements to qualify for these private loans. This is one of the main reasons that many borrowers elect to use a private lender and hard money.

As a rule, private hard money is seen as a faster and less difficult solution for many real estate investors. With less documentation required for the application, not only is this a less stressful process for the borrower but it is also faster for the lender. For these types of loans, the lender is primarily interested in the value of the property which is going to be used as the collateral on the loan and not the borrower’s financial health. So rather than spending days or weeks verifying credit history and credit reports, the lender is only seeking the current market value of that one property. If the loan amount is less than 70% of the property value then the lender is most likely ready to draw up the agreement and fund the loan.

Who Benefits from Hard Money Loans?

There are four main ways that hard money loans can be used to a great benefit for borrowers. The first is in the case of flippers. This is an investor who is buying a house that needs work and will be completing a renovation with the intent of selling the property for a profit and in a very short time. A private loan is much faster and easier for this process. Builders will also use this type of loan to purchase a lot to build on. Once the structure is complete, they sell it and pay off the private lender with the profit from the sale. Investors also favor a private loan when they are in need of funding very quickly. Opportunities can be very time sensitive and making the initial purchase using a private loan is much faster. Then the investor has the option of securing a traditional loan to lower their interest costs once they have ownership of the property.

A Final Benefactor

The last type of situation which can require a private loan of this nature is a person who has bad credit. There are occasions when a person has saved enough for the down payment on a property but is still unable to secure a traditional loan for the purchase. Their credit is too bad or they have no credit history. In this case, they can use the private lender to secure the property and then refinance later when they are able to qualify for a traditional loan. All of these situations are clearly good options to take advantage of an opportunity that would otherwise be lost.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Wednesday, March 28, 2018

OCC Study reveals risks from Commercial loans

The OCC warns in its semi-annual risk report that relaxed underwriting standards may be putting some commercial loans at risk of default. Should you be worried?

The report warns that specific influences on the credit market may be causing some banks to lower borrower standards. "The credit market continues to be influenced by strong competition, particularly from non - bank lenders, and heightened asset valuations," the report claims. In effect, strong competition for new loans may be pressuring some banks to lower standards on borrowers.

The report also warns that the recent economic boom may be making some lenders complacent and that lenders may need to take greater caution in case of an economic downturn. "In addition, the long economic recovery and expansion may collectively increase lender complacency. In this environment, lenders need to focus on maintaining sound credit standards within risk tolerances and understanding the potential credit risks that may be exposed under less benign economic conditions."

The report claims banks need to be cautious and may need to diversify their lending activities. The authors of the report, the National Risk Coalition, cite commercial mortgage growth as a specific area of concern. The NRC claims,"increasing concentrations of commercial real estate (CCRE)loans highlight the need for sound risk management processes and the effectiveness in managing concentration risk for some banks."

In spite of the dangers key commercial loan metrics remain are strong

The report claims that key metrics of commercial credit quality such as delinquencies, nonperforming loans, and net charge-offs remain positive. These key measures improved over the second half of last year and remain elevated above historical averages. Commercial credit quality is stronger than any time since the 1980s according to the statistics. New business loans have moderated from the 25% growth levels seen in recent years but remain above GDP according to the report. Non-depository groups such as investment firms and finance companies receive the majority of these new loans.

Smaller banks may be relaxing underwriting standards to fuel commercial loan growth, which could be a dangerous trend should an economic slowdown occur

Assessments by OCC evaluators reveal a gradual easing of borrower standards at many banks. Since the first quarter of 2016, the majority of banks have relaxed lending standards, rather than tightening them. The trend reflects a gradual easing of underwriting standards which began in 2013, as the economy started to recover from the recession. Even though banks are relaxing their standards, the report concludes that the majority of banks are still lending within their risk tolerances and are maintaining relatively safe underwriting practices.

However, there remains a concern that the growth in commercial mortgages may be putting some lenders at risk. Specifically smaller banks with less than a 1 billion dollars or less in assets. While business lending declined overall last year, the majority of new business loans originated from these smaller banks. Data indicates that these groups are supplementing a declining volume of residential mortgages with commercial mortgages. This narrow and specific focus on commercial mortgages may put these smaller financial institutions at risk if economic conditions change and more borrowers default.

However, the report also claims underwriting standards remain reasonable, credit quality is high, and that the economy is strong. Whether banks will heed the conclusions of the report remains to be seen.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Thursday, March 22, 2018

Defining Working Capital Commercial Loans and Their Good and Bad

Do you wish you could obtain working capital commercial loans to help your business? Level 4 Funding shares the pros and cons of these loans.

The amount of cash a company has to cover standard business operational needs like employee payroll, rent, monthly utilities, paying vendor and more is called “working capital.” Working capital can really come in handy if a new or growing business hits a slow patch or is having growing pains while expanding. Without an extra cushion of working capital to cover these everyday expenses, a company could go out of business or have to file bankruptcy or foreclose on their property. So working capital commercial loans really can be the difference between your company’s success and its downfall.

Working capital loans have lots of benefits. They generally have a very quick approval process, which means you can receive the money you need often inside of a week after the loan is approved. Unlike other types of conventional loans from traditional lenders, there are no stipulations on how the funds from the loan are used. The application process is not as complex as others can be and even if companies don’t have perfect credit or are still establishing credit history, they can still have a chance of getting approved for these types of commercial loans.

There are some drawbacks to these loans, as well, that lendees should know about. For example, due to the fact that they are bit more lenient in some ways, such as credit check and application process approval, these loans typically require that borrowers to put up a specific amount of collateral to obtain the loan. Because they have shorter terms, working capital commercial loans also have higher interest rates than longer-term loans from conventional banks’ repayment schedules.

These loans are ideal for businesses that aren’t “typical” and therefore don’t usually have an easy time getting loan approval from other lenders.

Sometimes lenders require the funding to be used in a certain way (such as for equipment like machinery or computers). But because working capital loans don't, this can be beneficial for companies that don’t need equipment or small or new businesses that could really use the cash to get up and running or through a difficult patch when cash flow is tight. This is also great for niche companies that need supplies or equipment that doesn’t fall in the typical range of what traditional lenders recognize.

If you need cash and you need it now, this is the type of loan for you — and there are lots of lenders that specialize in this exact type of loan.

It’s important to work with a trusted and experienced lender — regardless of the type of loan you need.

Regardless of your business status, credit history or any other factor, it’s important to deal with a lender that you trust to get you the best loan for your needs with the best terms. Do some research on local lenders in your area that specialize in these loans and don’t assume the first lender you meet with will be the right one. Be patient and don’t jump into this important decision too quickly.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Saturday, March 17, 2018

Why Commercial Loans Had a Successful 2017

The end of 2017 wasn’t quite the strongest quarter, but overall 2017 was a really good year for commercial loans. Just recently, Bank Financial Corporation released their impressive numbers from 2017 and many others in the industry shared the same success.

With a 20 percent increase from last year, Bank Financial Corporation recorded a net income of $9 million dollars. There was a decline in the 4^th quarter from previous years, but it was mainly due to accelerated payments and also prepayments of leases. On top of that, the reduction of wholesale deposits did cause a decline in total deposits in the 4^th quarter, but 2017 still saw an overall increase.

Commercial loans and industrial loans san an increase in $53.5 million dollars in 2017. Also, seeing increases, multi-family residential real estate loans increased by $45.5 million dollars and middle market commercial leases grew by $18.1 million dollars. Bank Financial Corporation wasn’t the only company that saw an increase throughout 2017. Many in the industry also saw just as impressive numbers when it comes to all the different types of loans.

It was a favorable year for Bank Financial Corporation set a new record with commercial related loan balances of $1.22 billion dollars. The total retail and commercial deposits didn’t grow, but it also didn’t decline either, leading to stability throughout the year. Stability isn’t the best scenario, but it is a lot better than seeing a decline. Which is why many in the industry are hoping that the numbers continue to increase or at least be stable as we continue into 2018.

Bank Financial Corporation thanks the positive trends due to a new organization structure.

With such a great year with accelerated growth with commercial loans, Bank Financial Corporation has given credit to the success to new key business plan objectives that they were able to execute for a successful year. The company is hoping to continue to improve and become more efficient throughout the new year. The company was able to organize their plans to successfully deliver the business that their consumers are looking for.

The momentum from 2017 is expected to continue through 2018.

Due to the successful year, Bank Financial Corporation has been able to obtain new customers, acquire new account types and even expand relationships with existing customers. Bank Financial Corporation is the holding company for Bank Financial National Bank, who currently have 19 offices across the United States and offer things like commercial loans.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

How to Raise Your Business Credit Score for Commercial Loans

Your business credit score will play a role in approval for commercial loans. If your business is just starting out, you might not have an impressive credit score, but there are things you can do to boost your credit score to avoid denial.

Credit score is reflection of your financial history and that means you want it to be great because it says a lot about your business’ credibility and stability. It also plays a part in getting approved for extra funding and is a good way to avoid having to pay higher interest rates or higher fees.

There are things you should do to boost your credit score. One of the easiest ways to do this is to always make payments on time to creditors. Making payments early will boost your credit score even more. Those with perfect credit scores are known for having a track record of making payment early. Start doing this sooner rather than later, the longer you do this, the better your score. You want to use your credit cards, this can help increase your credit score, but avoid hitting the maximum limit.

Keep in mind that public records will also play a role in your credit score on top of getting approved for commercial loans. Things filed like judgements, liens and bankruptcies are public record and could have a negative impact on your credit score. That means all of the hard work you have put in boosting your score could go down the drain. You want to avoid having anything financially wrong on your financial record.

Borrow from the right lenders, ones that actually report to credit bureaus.

It is okay to be picky when it comes to choosing the right lender. Commercial loans can boost your credit score but making payments on time, but they need to be reported to the credit bureaus. That is why you should always ask your lender beforehand if they report. Banks usually always report, but it is not a requirement for lenders to do so.

Building a better credit score has its many benefits.

Having a good credit score will help with many things like lower interest rates on commercial loans or credit cards. Plus, you will usually be able to come to better terms with supplies, attract new customers and establish a good reputation with existing customers. Of course, credit scores can be calculated in a variety of ways and can vary, but always try to keep as up to date as you can on your current credit score.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Friday, March 16, 2018

Why You Might Be Getting Denied for Commercial Loans

Getting approved for commercial loans can be tough. Luckily, some small businesses are being able to get a helping hand from lenders and banks. This can lead to a boost in economy and job growth. But some denials are still occurring, so why?

Applying for the loan can be the easy part. Waiting for the answer is what is that hard part. There are many reasons for denials, but one of the most common is insufficient revenue. Showing lack of cash flow is going to turn any lenders or banks away from wanting to help fund you. Your business needs to be able to prove that you have a successful cash flow and are deserving getting extra funding.

Other factors also play a role in approval of commercial loans. Lenders and banks will also take at all equipment that is available or being used. They will also look at the location of your business and the inventory quality. Having issues with any of these things can be reason for denial.

The stability and credibility of your business is also going to play a large role. These things can be proved with an excellent credit score. Coming up with a plan to present to lenders and banks about why the extra funding is needed and how it will boost your revenue is another way to avoid denial. Proving that you have a stellar financial track record and that there is good reason for the funding will almost always guarantee approval on all commercial loans.

Keep in mind that credit always play a large role in approval.

Banks strongly encourage a credit score closer to 700. Lenders are a little less lenient, but still prefer a credit score of at least around 650. If you are having a hard time boosting your credit score. There are many things you can do. Start by making all of your payments on time. Also, start off small. You can try to obtain small loans to help build your credit up so that you won’t get denied when you try applying for larger commercial loans. Planning for the future is always a good idea and you can do this by starting off small and building your way up to larger funding projects.

Really consider if it is the right time to apply because you never want to get denied.

If you aren’t quite ready to apply and get approved for commercial loans, it might be a good idea to wait. It is better to wait for the time to be right than to be denied all the time. Denial can really take a huge hit on your ego. It is best to try and get approved on your first try. So, take your time considering all of the benefits and negatives of applying at this time. Do plenty of research and build a solid foundation. And also, never get a loan when it is not necessary.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Tuesday, January 3, 2017

Private Hard Money Lender In Arizona

Setabay LLC

22601 N 19th Ave Suite 112

Phoenix AZ 85027

Private Hard Money Arizona

Hard Money Lender Arizona

Trust Deed Investing Arizona

Wednesday, August 26, 2015

5 Things You Need to Know About an Arizona Bridge Loan

An Arizona bridge loan is a special type of short term loan that can help you buy a new home. It is important that you know your options and fully understand the terms of your loan to make an informed decision.

An Arizona bridge loan is a specialized short term loan that can be useful for real estate transactions. It is a short term loan that allows you to use the equity in your current home as a down payment on a new home before your current home sells. As the name implies, an Arizona bridge loan is designed to “bridge” the gap by giving you funds for a down payment. The loan is paid back with the proceeds from you home sale.

A bridge loan can be very beneficial in many ways because it allows you to buy a new home and put yours on the market without any restrictions. When you are living in a home while you are trying to sell it, scheduling showings can be a nightmare, especially if you have pets or kids. It is also difficult to keep your home show ready and leave at a moment’s notice. Many buyers will also have trouble picturing themselves in your home while your stuff is there. A bridge loan can allow you buy another home while yours is still on the market by fronting you the down payment.

An additional benefit of a bridge loan is that it is relatively easy to qualify for. There is not a lot of paperwork and since many borrowers will have a high debt to income ratio because they own two homes for a short period of time, debt and credit scores are not as important as they are in traditional loans.

Important Things to Consider when Thinking About an Arizona Bridge Loan

If an Arizona bridge loan sounds like it might be a good option for you, it is important to know all of the risks and benefits and know the ins and outs of your loan terms. Make sure you are in the driver’s seat and in control of your loan at all times. Here are a few things to keep in mind.

1. An Arizona bridge loan may have a high interest rate. Since a bridge loan is a short term loan and is secured by the sale of your current home, the lender is taking a fairly significant risk in extending you the credit. The more risky the loan, the higher the interest rate. Although interest rates do fluctuate, you can expect to pay more than the prime rate and your rate could climb as high as the double digits.

2. You can avoid paying interest. Although the loan itself has a high interest rate, shopping around for the right loan can help you avoid paying any interest at all. Many bridge loans allow you to skip the first few months of payments. If you can sell your home during this time period, you can pay the loan back before any interest accrues.

3. There will be fees. An Arizona bridge loan has several fees associated with it. You will pay an administration fee of about $750 and an appraisal fee on your current home to ensure it is worth what you need to sell it for. In addition, you will pay wire fees, origination fees, and points which will be dependent on the amount of your loan. When all is said and done you will probably end up paying about $2,000 to secure your bridge loan. For most borrowers this is well worth it to get them into their new home sooner rather than later. Also, keep in mind that the fees will vary depending on your lender so shop around.

4. A bridge loan can cause stress. If your current home does not sell quickly, you will end up paying the mortgage on it, the mortgage on your new home, and the payment on your bridge loan. Make sure to carefully evaluate your finances to ensure that you can make your payments for a short time if you need to. You can also help eliminate financial stress by pricing your current home to sell quickly.

5. A bridge loan can save you money. If you wait to purchase your new home until your old home sells, you may end up needing a short term rental. This is literally throwing money down the drain. Getting the right Arizona bridge loan and selling your current home quickly can actually save you quite a bit of money.

If an Arizona bridge loan sounds like a good option for you, start looking at your options today!

An Arizona mortgage broker or private lender can help you get started on getting your bridge loan. Call our office today to schedule an appointment. You will be glad you did!

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

Tuesday, August 25, 2015

How to Use Arizona Bridge Loans to Benefit your Small Business

Arizona bridge loans are gaining popularity in the housing market as a way to bridge the down payment gap and allow buyers to purchase a new home before selling their current home. They are also a valuable tool for small business owners to get cash quickly based on business collateral and upcoming deals.

Arizona bridge loans are short term loans that are designed to bridge the gap between needing liquid cash and a future investment paying off. The most common use of Arizona bridge loans are during the home buying process to bridge the gap between needing a down payment for a new home and selling a current home. The bridge loan is secured to the original home, the one that's on the market. The funds from that loan are used as the down payment for the mortgage on the new home.

There are no strict guidelines when it comes to Arizona bridge loans so credit score and debt to income ratio are not usually factors that will automatically disqualify you. This is good news for borrowers with less than stellar credit or who may have a high debt to income ratio once they purchase their new home. Instead, bridge loans are based on a few different factors, including how likely it is that you will sell your current home quickly, and whether or not you can make both mortgage payments for a short time if it becomes necessary. If you default on a bridge loan, the lender has recourse to get their money back using the property you have on the market because it is the one that secured the loan.

A bridge loan can be a good option for individual borrowers who want to purchase their next dream home but have not sold their current home. A bridge loan usually has a higher interest rate but certain loans allow you to skip payments, making it unlikely that you will have to pay any of the interest as long as you sell your home quickly. A bridge loan also allows you to put your home on the market quickly and without any schedule restrictions. You can even stage it to make it sell more quickly. A vacant home will usually sell more quickly and for top dollar so a bridge loan can help you earn more money on your home sale.

How to Use Arizona Bridge Loans as a Business Owner

A less common but still beneficial use of Arizona bridge loans is to help your small business when you are strapped for cash. Sooner or later most business experience a cash flow issue. A bridge loan can help "bridge" the gap between today's need for immediate cash to pay bills and the final closing of a pending investment deal or long-term financing package.

If you find that you need some immediate cash before a big deal pays out, a bridge loan can be a good solution for your business. In order to secure the loan you will need to prove your ability to pay the loan back. A few ways to do that is through:

· Earnings. It is possible that a lender may be willing to extend a bridge loan on the basis of earnings alone. You will need to have a stellar credit history, a consistent track record of making profits, and strong sales to show you can repay the loan in a short amount of time. Unless you are able to fulfill all of these requirements, you will need to find another way to obtain financing.

· Collateral. If your earnings aren’t up to par, you can use business assets as collateral to obtain a bridge loan. Equipment, real estate, and other capital assets can all be used to secure a bridge loan.

Contact a broker or investment professional to get started on finding the best bridgeloan for your business today!

A broker can help you navigate the ins and outs of Arizona bridge loans whether you need one for business or real estate. Having the right financial professional by your side can help you risk less and benefit more. You can get the cash you need and help protect your current assets. Call our office today for more information on Arizona bridge loans.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

Monday, August 24, 2015

Self Employment Home Loans: A Win-Win for Business Owners

If you are self-employed, a self employment home loan might be a good option for you to purchase an investment property. Contact a mortgage broker to learn more about your options and loans today!

If you are self-employed, you know the benefits of having your money work for you. One r mark gowlovech.jpg

elatively easy and painless way to invest is with real estate. Although there have been ups and downs, experts agree that real estate investing has been overall stable and a way to increase your assets. Real estate has consistently appreciated in value over time and since it is a physical investment, you always have something to fall back on, even if the value goes down.

Although real estate investing may have many perks, it can also present unique challenges if you are self-employed. Since you own your own business, you can take advantage of many tax write offs that will save you big on your taxes. Everything from your office space to your paper clips are tax deductible. These deductions can make it look like your business is not making as much money as it actually is, and in some cases it may even look like you lost money.

While normally having a negative income stream is not a problem (as long as it is temporary, if it goes on too long, the IRS may object), it can present challenges when you are looking to make a real estate investment. This is especially true if you already own a property that you use as a primary residence. The bank may take one look at your tax returns and debt to income ratio and send you to the door, empty handed.

Being rejected for a loan can sting, but do not be discouraged. Instead, say good bye to the bank and hello to a licensed mortgage broker or private mortgage lender. Brokers and private lenders have access to different self employment home loans than banks do and can often work with you around mortgage requirements to find a loan to fit your needs. There are many options, especially if you are looking for a short term investment property like a fix and flip or short term rental.

3 Types of Self Employment Home Loans That Can Help You Make Money

Once you have found a mortgage broker or private lender, you will be given many different self employment home loan options. Like anything else in life, it is important to remember that all loans are not created equal, and the best loan for you will depend on your ultimate investment goals. A few loans to look into are:

Hard money loans. A hard money loan is a great self employment home loan if you are looking for a short term investment. A hard money loan is not backed by a bank but instead by an equity firm or group of investors. They evaluate the property you are purchasing based on its investment potential. This makes your income or other debts less important because their investment is protected by the physical collateral of the property in question. Once they decide a property is a sound investment, they give you the money and you pay interest on it. The interest rate is usually pretty high so a hard money loan is best used as a short term loan to fix up a property and sell for a profit quickly. Once you sell the property, you repay the investors and any additional income is yours.
Adjustable Rate Mortgages. An adjustable rate mortgage is a good option for a longer term investment. An adjustable rate mortgage or ARM has an initial fixed interest rate that is usually very low. The low interest rate means lower payments so it is easier to qualify for, even if you have other mortgage debt or a low income due to business deductions. After a period of 1 to 7 years, the rate resets to a higher rate and your payment goes up. An ARM is a good option if you are going to rent out a property for a few years or do a long term fix and flip. An ARM can also be a good option if you anticipate your income increasing and will be able to refinance before the rate resets.
Stated income mortgages. A stated income mortgage does not use W2’s and tax documents to verify your income but rather goes by what you state it is. This can be a good option if your taxable income and actual income are vastly different. Just keep in mind that you may pay a higher interest rate and it is important to not over-extend yourself.

With a variety of self employment home loan options, don’t let a bank keep you out of the property investment market. Call a mortgage broker and get started today!

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

Featured Post

Monday, April 23, 2018

Tuesday, April 17, 2018

Saturday, March 31, 2018

Though many borrowers are unfamiliar with the concept, hard money loans offer many benefits to certain borrowers. Understanding how these loans work can make them a great financial tool to have at your disposal.)

Who Benefits from Hard Money Loans?

A Final Benefactor

Wednesday, March 28, 2018

The OCC warns in its semi-annual risk report that relaxed underwriting standards may be putting some commercial loans at risk of default. Should you be worried?

Thursday, March 22, 2018

Do you wish you could obtain working capital commercial loans to help your business? Level 4 Funding shares the pros and cons of these loans.

Saturday, March 17, 2018

The end of 2017 wasn’t quite the strongest quarter, but overall 2017 was a really good year for commercial loans. Just recently, Bank Financial Corporation released their impressive numbers from 2017 and many others in the industry shared the same success.

Bank Financial Corporation thanks the positive trends due to a new organization structure.

The momentum from 2017 is expected to continue through 2018.

Your business credit score will play a role in approval for commercial loans. If your business is just starting out, you might not have an impressive credit score, but there are things you can do to boost your credit score to avoid denial.

Borrow from the right lenders, ones that actually report to credit bureaus.

Building a better credit score has its many benefits.

Friday, March 16, 2018

Getting approved for commercial loans can be tough. Luckily, some small businesses are being able to get a helping hand from lenders and banks. This can lead to a boost in economy and job growth. But some denials are still occurring, so why?

Keep in mind that credit always play a large role in approval.

Really consider if it is the right time to apply because you never want to get denied.

Tuesday, January 3, 2017

Wednesday, August 26, 2015

Important Things to Consider when Thinking About an Arizona Bridge Loan

If an Arizona bridge loan sounds like a good option for you, start looking at your options today!

Tuesday, August 25, 2015

How to Use Arizona Bridge Loans as a Business Owner

Monday, August 24, 2015