Learn To Be A Fix & Flip Investor: California bridge loan

Showing posts with label California bridge loan. Show all posts

Saturday, March 31, 2018

How to Qualify for Commercial Real Estate Loans

Understand that commercial real estate loans are nothing like residential loans, which means that the qualifications are drastically different as well. Understanding the qualifications before you apply for a loan is critical to securing the fund that you need.

First, it is important to grasp that commercial real estate loans and residential real estate loans have nothing really in common other than the word loans. The comparison is similar to that of a paper airplane and a jumbo jet; yes they both fly. So be prepared to learn about an entirely new set of loan qualifications before you embark on your first commercial loan application.

Lenders base a huge portion of their decision on your personal credit score when you are seeking a residential loan. And it is always good to have a respectable credit score, but it is not as critical when seeking a commercial loan. A credit score of below 600 will require an explanation but it is not a deal breaker. But a credit score of under 500 is likely to reduce your opportunities quite a bit. What lenders will be looking for to approve commercial real estate loans is a solid net worth. In general, lenders would like to see a net worth equal to the amount of the loan you are requesting.

Another important factor to qualify for commercial real estate loans is liquidity. The standard for liquidity varies among lenders but the rough average is 10-20% of the loan amount. What lenders don’t want to see is a borrower who scrapes up every last dollar that they have to make a down payment. Being cash poor could have catastrophic results if there is an unexpected expense which arises or some other type of emergency.

Your Experience

Your experience will also be a key factor in your approval. Demonstrating that you have the ability to manage the new property successfully means that you are most likely going to be able to make you payments on time and for the life of the loan. And if the property is quite large, the lender wants to know that you have the resources and staff in place to handle the management and ownership responsibilities associated with the property.

Income

As with any loan, there is a certain expectation for income. You need to have the income to pay the loan payment each month. This might be in the form of rental income once the property is up and functioning or it could be revenue from the business which is housed on the property, but the cash flow needs to be there to make the payments. Unlike on a residential loan, there is not real ratio such as debt to income that the industry uses as a standard. But you do need to demonstrate that there will be some type of cash flow to cover the loan payments for the life of the loan. All of these factors are blended to determine your ability to make the monthly payments on the loan that you are requesting unlike in a residential loan application where most of the weight rests on your income alone.

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

Saturday, March 24, 2018

How to Find Hard Money Lenders

There are various reasons that people turn to hard money lenders, but knowing the benefits is only half of the challenge. Now, you have to find the one that is right for you.

Hard money loans are often issued by individuals or companies. At one time, they were considered “last resort” loans for people or businesses with imperfect credit. In today’s world of fix & flip investors and contractors in need of quick funding, they are a part of most businesses and individuals lending portfolios. People often turn to hard money lenders when they are in need of a bridge loan that keeps them afloat until a property sells or is renovated. Other’s use this type of loan due to time constraints and when initial capital is required in a matter of weeks instead of months, such as when a hot property hits the market.

So, just where do you go to get these quick-to-fund loans? Ideally, it’s best to work with a lender that specializes in your specific business model or real estate segment. For instance, a hard money lender that understands construction loans will offer monthly quick-payout draws as well as interest-only payments, both of which are designed to take the stress off you and your company as you progress through the building process.

There are also hard money lenders that specialize in the fix & flip or buy-and-hold real estate segments as well as multifamily, office, warehouse and storage complexes. If you do not have a direct reference from a fellow business associate, you can turn to the many listings on the internet. If using this approach, be sure to look for recommendations from established businesses and don’t be shy when addressing your concerns. If you find a qualified lender that you can trust and has a large rolodex of private lenders to draw on, you will most likely find yourself turning to this funding source time and again for many of your capital needs.

Things to Consider When Interviewing Lenders

There are a few basic questions that you will want to address when undergoing an interview with a potential lender. One of the most important is their loan-to-value ratio (LVR). Because hard money loans are asset based, the loan value is determined by the appraised value of the property. Some lenders will use the potential value of the property once renovation has been completed, otherwise known as the after-repair-value or ARV. This approach, however, is very risky and, for those lenders willing to take this chance on you and your abilities, will often mandate a higher-than-average interest rate. Many lenders stick to about a 70 percent loan on the value of the property.

At Level 4 Funding, our loan-to-value goes as high as 90 percent with 100 percent of rehab for fix & flippers.

Of course, loan-to-value is just part of the equation. The other all-important consideration is the interest you’ll be paying on your loan and the terms the lender offers. At Level 4 Funding, our interest rates start at 7.99 percent with terms anywhere from 3 months to 5 years. Call us today for a no-obligation quote.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Friday, March 16, 2018

Why Commercial Real Estate Loans are Beneficial for Small Businesses

It can be exciting when it is time to expand your new business, but it can also be stressful when you need to start looking for extra funding for your expansion. Applying for commercial real estate loans can be a grueling process, but in the end, it is well worth it.

Always do plenty of research and compare all of your options. This way, you will be prepared and know what to expect. Working with a lender you can trust is very important because then you will feel comfortable asking all of the questions you need to ask to ensure you understand everything. Commercial real estate loans can be used for many things like a new location for your business, renovation of your current location or expansion of your current location. Really, you can use it for any of your real estate needs. Especially if you are looking to purchase new property. This can cost a lot, leading to the need of extra financial help.

Find the right lender to work with. They will open with you about the entire process and will discuss the terms and fees that come with borrowing. Reputable and honest lenders will discuss with you what will happen if you decide to pay off the loan early. In this case, you may be responsible for some fees. If you are open and honest with your lender from the beginning, then you will not be hit with any hidden terms or hidden fees.

Interest rates will also vary when it comes to commercial real estate loans. It will depend on many things like your credit history, financial situation and type of business. These loans will usually come with higher interest rates than compared to other types of loans. The interest rates can fluctuate, but the average rate will most likely be between 3.5 percent and 6 percent.

Be prepared to now only pay higher interest rates, but also higher additional fees.

Upfront fees and additional costs aren’t that uncommon for commercial real estate loans. Just like with interest rates, these additional fees are going to be higher with these type of o loans. Some of these fees could include: legal costs, loan application fees, survey fees, property appraisal or even an annual fee.

Higher interest rates and higher fees can be difficult, but working with the right lender will make it worth it in the end.

There are many reasons for why you may need to extra funding. And even though it takes some time, work and a little bit of stress to apply for extra funding, if you work with the right lender and are prepared with what to expect throughout the process, then all of your hard work will pay off.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Wednesday, September 14, 2016

Phoenix Real Estate Is Booming–So is Everywhere Else!

Based on the data provided by S&P Case Shiller, the bottom is over (See Graph Below) and we are moving up again and this time it’s going to be even bigger!

It appears from the graph of the Phoenix House Values below, that the real estate market in the Phoenix area is heading up. Is it time to buy real estate again? How long will it take to come back to normal? Should I get out of the market and wait? These are hard questions to answer but Dennis makes these recommendations:

The upturn in values are due to LACK OF INVENTORY AND RECORD LOW INTEREST RATES.

Keep your home if possible. Do whatever it takes to keep the current home.

Do a Mortgage modification? HAPR 2. Its possible but there are very few who are successful.

If you ‘bail out’ and let the bank foreclose, you will not be able to purchase a home for 5-7 years, maybe even never again!

Inflation will it come back and will the value of the dollar drop dramatically? (This could change if the USA will cut spending and raise taxes, cut medical/social security, and increase the tax rate by 45%. I don’t think this will happen.)

The amount of debt in the USA will continue to grow. The amount is very frightening.

At this rate, in 5-7 years, it will cost $10 to buy a loaf of bread. Gasoline will cost $25/gallon. And the average starter home price will be $600,000.

Get out of debt; get rid of the credit cards and pay them off. Purchase only if you have the cash. Do not get into any debt. (I sound like your mother here, but she was correct.)

Start a side business. It’s too difficult to explain why here, but the best reason is the potential tax advantage and the possible income. Your own side business is the LAST area the government has yet to attack. Make it simple and get going. An extra $400 per month really helps.

If you are able, purchase quality single family homes in a good area and turn them into rental units. (Your side business?)

I’ve talked to a lot of people who feel that they can ‘let their home go and rent for awhile’. Rental rates are lower than their mortgage rates. Yes, they are! ‘We can save a lot of money by renting vs. paying the mortgage, and in 2 years we can purchase again and have a good down payment.’ Well, it’s actually going to be 5-7 years before your credit report looks good enough to purchase a home again. And can you really save the money? Most people will spend the money on toys. If hyper-inflation hits, like some economists predict, then you’ll be priced out of the market. Do you want to take the chance? Keep your home, do a HARP 2 Mortgage modification, and hang on — the next 5-7 years are going to be enjoyable.

Dennis Dahlberg is Broker/RI/CEO of Level 4 Funding, with many years of experience in lending, flipping and fixing. UPDATED 9/13/16

For Phoenix the bottom was officially September 2011.

For a PDF of this Graph Click Here

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: private hard money california,private hard money arizona

Saturday, August 6, 2016

Crunching numbers on hard money lending

So what are some of the many benefits to a hard money loan? Well, here’s some numbers for your calculator to use. But first, remember that a hard money loan is a form of asset-based borrowing instead that deals with real estate financing. Some borrowers also pursue Arizona hard money loans when their financing needs are super urgent and more traditional and conventional financing sources cannot respond in time.

In many cases a hard money lender Arizona will offer a smaller loan size based upon a lower "Loan To Value Ratio". This only means they may opt to loan no more than 65% of the property value. Therefore it is more common for real estate investors to offer additional real estate as collateral in order to obtain a larger loan amount. This is known as cross-collateralization.

Then, it’s simply a matter of contacting them with your idea or offer of investment. They’ll invite you into their office where they’ll give you free coffee (score!) and you can discuss all the grimy details of this exciting new loan available to everyone, even people like you.

Don’t think too much when dealing with these types of loans. Remember, you are a valuable person so fight for your right…. To vary!!! That means, don’t let yourself be jerked around by people who use a bunch of mumbo jumbo to confuse the drizzle out of you. You want your hard money lender to be your friend, because you’re already in a tight spot and could use a shoulder to lean on. That’s the whole idea behind hard money lending in the first place.

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 real estate loan,commercial hard money lender,commercial hard money lenders

Labels: commercial hard money lender commercial real estate loan

Friday, August 5, 2016

A different and quick type of loan

One of the easiest and quickest loans available to you today is a hard money loan Arizona. While everyone is aware the housing market is rougher than rough, even rougher than sandpaper toilet paper, there’s still a niche market where buyers are obtaining property, fixing it up and selling it for a profit. The only problem with this plan is that most banks and mortgage companies are wary of approving such loans. First of all, they want more long-term buyers out there and not some business-like entrepreneur that bends over backwards “experimenting” with tiling and painting and roofing. Second, most banks and mortgage companies are wary of approving anyone period. The market is so beaten and trodden down, there’s hardly any chance worth taking a risk for, because they’ll just get further and further in debt.

So one of the primary solutions is to just choose a private money lenders Arizona. These guys hardly do background checks or credit checks because they’re fully aware your plan is just to flip a property quickly. Since you’ll only be paying on the interest, doing nothing to the equity of the property really, it makes sense for everyone involved.

These things are also called asset-based loans or bridge loans. However, asset-based lending is a term more frequently used in conjunction with commercial real estate financing as opposed to simply hard money which is used for residential as well as commercial finance.

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 real estate loan,commercial hard money lender,commercial hard money lenders

Labels: commercial hard money lender commercial real estate loan

Sunday, July 24, 2016

Flipping hard money loans the right way

One of the largest challenges in the real estate “flipping” business (you know, when you buy properties only to fix ‘em up and resell ‘em for a nice profit) is getting approval for a loan. Most banks or mortgage companies will turn their nose up at you because this is all to familiar to them. They know this is a short term project and although probably a labor of love, not the kind of long term investment they desire. You’ll probably already consider finding a hard money lender Californiahard money lender California, but even that route has it’s bumps in the road. Even if you can get approval really quick, sometimes as little as 48 hours without much of a credit check or background check, you’ll want to do your homework.

Always, always have the proper documents ready. Hard money loans are primarily secured within the property but also knowing about the borrower is very important. You may be asked about credit, income and everything in between. Like a girl scout, be prepared.

Make sure you understand the history of the property. Whatever freak accident happened to it that got it into it’s decayed state and why. For example, if a Walgreen’s closed, it may be because property taxes were too damn high or the neighborhood was too dangerous or poor to afford visiting the place. You’ll want to be sure that the decay is more artificial than complete and utter destruction of the property.

Also, chat with contractors. Get a few estimates on what it will cost to paint, refinish, tile and otherwise repair the property. If you head into the private money lenders California office with information on restorations needed, a little history and an estimate of the costs involved, you’ll be that much more likely to get approved. Good luck!

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 real estate loan,commercial hard money lender,commercial hard money lenders

Posted Yesterday by Dennis Dahlberg

Labels: commercial hard money lender commercial real estate loan

Monday, July 18, 2016

Need Help? Hard Money California!

It doesn’t matter if you are in a tough financial situation or if you are looking to build or buy your dream home or business, Hard Money California can help!

Very few things are more worrisome than trouble in your financial world. Your financial past shouldn’t determine your financial future! That’s where Hard Money California comes in so darned handy.

While the interest rates may seem a little steep, you have to remember a few things about Hard Money California. First, keep in mind that Hard Money Lenders take a large risk in loaning their money to you. Not only do they loan the money to a complete stranger, they do not base the loan on your credit, income, employment history, or ability to pay. Can you imagine handing your money over to a complete stranger, never knowing if you are going to see it again?

Hard Money California Tried and True

Hard Money California is a tried and true method of receiving money fast. They are on you, the borrower’s, side and they want your property purchase to be successful. So many California citizens are looking to Hard Money Loans to make their lives easier. These money Lenders want to help you out and will be willing to do so if they can see that your investment or project would be profitable in some home.

Even if you have a bad credit score, that won’t stop you from qualifying for this type of loan. In fact, as long as you make your payments on time, it can actually improve your credit in the long run. Simply said, Hard Money Loans can be easily attainable and you can avoid a lot of the trouble and hassle of a bank loan’s paperwork.

Applying for Hard Money California is super easy. You just find a lending institution you feel good about and get on your path to success. You only have to deal with one specialist and you can often have your answer of eligibility within thirty minutes. Then, you can receive your money within 24 hours. This is great for houses and residential buildings that have a lot of bids on them because you can quickly and easily put in your offer and know you won’t be topped.

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: califronia hard money loans,california hard money

Learn To Be A Fix & Flip Investor

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Saturday, March 31, 2018

How to Qualify for Commercial Real Estate Loans

Understand that commercial real estate loans are nothing like residential loans, which means that the qualifications are drastically different as well. Understanding the qualifications before you apply for a loan is critical to securing the fund that you need.

Your Experience

Income

Saturday, March 24, 2018

How to Find Hard Money Lenders

There are various reasons that people turn to hard money lenders, but knowing the benefits is only half of the challenge. Now, you have to find the one that is right for you.

Friday, March 16, 2018

Why Commercial Real Estate Loans are Beneficial for Small Businesses

It can be exciting when it is time to expand your new business, but it can also be stressful when you need to start looking for extra funding for your expansion. Applying for commercial real estate loans can be a grueling process, but in the end, it is well worth it.

Be prepared to now only pay higher interest rates, but also higher additional fees.

Higher interest rates and higher fees can be difficult, but working with the right lender will make it worth it in the end.

Wednesday, September 14, 2016

Phoenix Real Estate Is Booming–So is Everywhere Else!

For Phoenix the bottom was officially September 2011.

Saturday, August 6, 2016

Crunching numbers on hard money lending

Friday, August 5, 2016

A different and quick type of loan

Sunday, July 24, 2016

Flipping hard money loans the right way

Monday, July 18, 2016

Need Help? Hard Money California!

Hard Money California Tried and True

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