Learn To Be A Fix & Flip Investor: hard money commercial loans

Showing posts with label hard money commercial loans. Show all posts

Thursday, May 10, 2018

How to Make Getting Hard Money Business Loans Quick and Easy

When it comes to getting approved to hard money business loans, it can be an arduous process. But Level 4 Funding offers simple “ABCs” to help you become eligible for loans and get approved fast!

When you decide you want to get hard money business loans for your company, there is a lot you can do to prepare before you ever even meet with a lender. For example, as with most anything, research can begin on the Internet. Do some digging about the types of loans available to business owners like yourself in your same industry and specific to you needs (for example, are you looking to purchase equipment or a building? – there are specific loans designed for each of those needs).

Once you’ve done some initial research about the types of loans out there, do your due diligence on lenders. While there online marketplaces that make getting a loan without ever leaving the comfort of your coach very doable, it’s also important to make sure you have the proper expertise and guidance — especially if you are first-time borrower. That comes from working with a professional lender.

Look for lenders that are local, have experience with loans in your specific industry and who can share their portfolio with you. Getting a good feel for your lender and moving forward on the same page makes the process of applying for hard money business loans much quicker and easier.

When you have made the decision on a lender, you can then decide if you need a short-term or long-term loan.

There are so many different ways to go about obtaining the loan as well as the kind of loan. Once you begin the application, you and your lender can work together on fine-tuning the right terms for your loans.

Once you submit your application, there are some evaluations that take place.

While with conventional banks and long-term loans, the process is much longer, requires a more complex application and proof of multiple forms of documentation, financials, credit reports and so on short-term loans with an alternative lender move much more quickly. The application process and fairly straightforward and the lender is mainly interested in collateral — and not much else. So if you want to move the process along, be prepare to prove what you can provide as collateral to secure the loan. It can even be the equipment or property that you intend to purchase with the loans. It’s a good idea to obtain legal advice when it comes to reviewing the term agreements. Be sure to take your time with all the documents that will require your John Hancock. These terms are binding with that signature. This is also a good time to review the entire contract with a fine-tooth comb to ensure that you haven’t missed any clauses about additional charges, fees or even pre-payment penalties. When you are ready to find a loan that’s right for you, call us at Level 4 Funding today.

Saturday, April 14, 2018

Commercial Real Estate Loan Rates

Do you have an office building, a rehab, or a multi-unit apartment building? With commercial real estate loan rates at one of their lowest, now may be the right time to consider a loan for your next real estate investment.

If you are an owner or looking to purchase a commercial property, there’s good news to be had: Commercial loan rates remain at an all-time low. With the Federal Reserve promising four rate hikes this year, this may not be so in the future. For this reason, this may be the perfect time for you to purchase or refinance a commercial property. Level 4 Funding has the team that can help guide you through the process and help you feel like a well-informed purchaser. Let’s take a look at how commercial real estate loan rates work and the interest rates the different types of lenders charge.

If your Credit Score is 680, you’ve been in business in 2-plus years, and plan on occupying 51% of the building, you may qualify for a SBA 7 (a) loan. If your project is between $2 and $3 million dollars you may want to explore the opportunities for financing from insurance companies and conduit lenders.

Commercial Real Estate loans have lower interest rates because they are collateralized by the commercial property. There are four factors that affect the interest rates for the Commercial loan. They are:

1) The Business and Customer creditworthiness: Your rate will be determined by the credit score of the customer and business, the higher credit score the lower rate.

2) Is the commercial real estate loan fixed or variable? A fixed rate loan is a loan that has a fixed rate for the term of the loan. The variable rate loan is reset from 1 to 5 years and will be adjusted based on current rates. Most people will not qualify for fixed rates.

3) What is the term and size of the loan? Hard money lenders offer loans with higher rates and shorter terms while conventional lenders offer longer loans with lower rates.

4) Prevailing Market Rates: Interest rates move up and down based on the government bond market. Keep informed about the movement in the government bond market and how they will affect your rate.

The Lender Has the Biggest Impact on your Rate

1) SBA loans--rates run 4.75% to 9.25%, the 504 loans are best for loans over $1, 000,000 and come in three parts: 50% from the bank, 40% from the SBA and 10% from the borrower. You will need a credit score of 680+.

2) Hard Money Loans--Rate run 10% to 18% and covers about 20% of the market. The rates are high because the loan is not based on the credit worthiness of the borrower but the value of the property. The loan-to-value runs around 55% for many hard money lenders.

3) Other Lenders--Only a small amount of loans come from Insurance companies and Conduits.

Commercial loans can be structured in three ways: fully amortized loans, interest rates resets, and balloon payments.

You may want to purchase commercial Real Estate or refinance a commercial property. There are wide varieties available for high credit scores and lower credit scores. Call and counsel with Level 4 Funding to find what works best for you in your situation. We offer rates as low as 7.99 percent.

Friday, March 30, 2018

How to Find the Right Commercial Real Estate Loans Online

Level 4 Funding explains simple ways to find the right commercial real estate loans… all from your computer. Read on to find out the key ways to choose the right online lender.)

It’s easier than ever to obtain things today. No more running out to the store for clothing, furniture, even groceries can be delivered right to your door! Practically anything you need or want is available at your fingertips and is just a mouse click away! Even when it comes to finding commercial real estate loans, you can turn to the trusty Internet to help you find exactly what you need.

While there are so many options and ways to obtain commercial real estate loans, the process can be started and even finished online. Via the Internet you can do a great deal of research about various loan types, the specialty type that might be best for your business, and even the application process. It can all be done online! However, it’s important to note that oftentimes, these virtual lending outlets may come with a higher interest rate to account for the risk factor. However, getting a loan without leaving your home is just so convenient, that the higher interest rate might just be worth it!

When you are looking for loans online, start at an online marketplace lender. These lenders allow borrowers the opportunity to obtain loans through online platforms. They are also more lenient for those that have less than desirable credit scores, dings on their credit history or who are just starting to establish a credit history for their business. The entire process happens online, so from the sourcing, underwriting, and services to the loan, then through the Internet, your loan is marketed to investors to receive funding. It’s fair to say that most online marketplace lenders are in the realm of short-term loans. However, that’s not to rule out obtaining long-term loans online, its just not as common.

Consider the many benefits of using an online marketplace lender.

Trying to get a loan in pajamas has to be the number one benefit! All kidding aside, the convenience factor is a big plus. However, the online marketplace does offer additional advantages for borrowers. The process is very smooth and efficient. So from the time you apply to the time you get approved (and get cash in hand) is quick and easy! It’s also ideal for high-risk borrowers that have previously been rejected by conventional lenders. Whether or not your loan is approved, there is not a long waiting period in which to find out.

While there are some benefits, there are also some drawbacks when it comes to obtaining commercial real estate loans via the Internet.

It’s important to note that these types of loans may be considered higher risk to lenders. And to ensure they cover their assets, borrowers will generally have to deal with higher interest rates to compensate for lenders’ risk. In addition to higher interest rates, there may be some costs, fees and other monies owned so it’s important to read all the fine print. If you have questions, see if the company has a live chat option or put in a call. You never want to go with a company that is unreachable. There are pros and cons to all things, so as long as you weigh your options and the goods outweigh the bads, finding a loan via the online marketplace can be a win-win solution!

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

Monday, December 4, 2017

What are Hard Money Commercial Loans and How Can They Help Your Business?

Hard money commercial loans are a great way to obtain needed funding to take your business to the next level. Read on to find out more about how these loans can get you the cash you need… fast.

Hard money commercial loans are private loans that are funded by lenders that investors and business owners can use when they need to seek alternative financing choices. They can be used primarily for real estate investment or foreclosure properties. These loans don’t require quite the amount of extensive paperwork or strict regulations as traditional or conventional loans do, so they are usually a bit easier to obtain.

These loans do have some cons in that they generally have high interest rates and you’ll want to make sure you fully understand all the fees involved, what the loan to value ratios are, and any other questions you may have including the timeline for turnaround of funding. It’s also crucial to understand that, as with any industry, there are less than scrupulous lenders that may try to swindle you. Take caution when you research lenders for your hard money commercial loans.

If you don’t have a good feeling about the lender you are talking with or they aren’t straight with you about the questions you have, it may be time to keep shopping. The right lender can be of great benefit in helping you negotiate the process of obtaining this loan and it can be a win-win solution for you and the lender.

If you are planning to use this type of loan to fix and flip investment properties, follow these tips.

With your loan funds, you can make a big difference in a real estate investment property. Be prepared by putting a plan into place before obtaining the loan. Make sure you have the home inspected and appraised. Don’t forget the importance of location, location, location and try to keep repair costs to a minimum. Create a budget for your repair and upgrades, and maintain a timeline that makes sense for you. Having a solid plan in place is an important element that makes lenders more apt to want to approve your hard money commercial loans.

After you’ve determined that you need this type of loan, don’t be hasty in finding the right lender.

Your lender is your partner is getting the best rates, terms and the total package when it comes to your loan. They can be your guidance and the person in your corner working to get the best loan for you. Spend as much time as you need to researching and even meeting with lenders to ensure you get a good feel about them, and that you can trust them with your loan.

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

Wednesday, November 29, 2017

Different Types of Hard Money Commercial Loans

Hard money commercial loans are a common go-to among developers and contractors for a variety of projects. These types of loans are often quick to both approval and funding, making them the perfect loan when capital is required in less than a week.

Developers and contractors use these types of loans to fund numerous projects including multifamily, industrial, office space, fix and flip, or buy and hold properties. In the present lending environment, underwriting standards are tightening and, when loans are approved, they are often for less than the total capital required to complete the project in its entirety. When developers opt to accept this type of funding, they are often left scrambling for additional capital part-way through the development. Not a good scenario.

Hard money commercial loans are different from traditional loans in that they are based on the hard-asset of the project, or other collateral, and can offer less stringent underwriting standards as well as increased loan-to-value ratios. Some hard money lenders will provide loans based on the after-repair-value, though these are more difficult to come by as the lender assumes greater risks. Some hard money lenders will even provide financing for the rehab costs, a practice that portends an even greater risk and therefore is also associated with a higher interest rate.

In order to obtain a hard money commercial loan, you need to have a plan, an exit strategy which shows how you intend to pay back the loan, and a bit of skin in the game. This ensures that you, as the developer, have something to lose as well and will, therefore, do all that you can to ensure the plans, building or renovation, go accordingly and to budget. There are always those surprises that almost every development faces, but even those are considered among experienced contractors.

How Quick Can I Obtain Capital with a Hard Money Loan?

Because most hard money commercial loans are funded by private investors or small groups, the time to funding varies dramatically. In most instances, funding is fairly rapid. Be sure to come equipped with your plans, budget and permits. If you are looking for funding for a fix and flip, demonstrate your knowledge in the market you’re choosing as well as construction and real estate protocol. If you have a weak spot in this area, it’s important that you show a lender that you have a team of experts to make up for any areas that you lack in experience. For instance, if you are not remodeling savvy, what construction company are you partnering with? If you are weak in defining markets and comps as well as marketing to potential buyers, who is the real estate agent that you are working with?

At Level 4 Funding, we work with hundreds of private hard money lenders that provide commercial loans for all types of projects.

We offer interest-only payments and short term loans anywhere from 3 months to 5 years. We do not put as much emphasis on your credit report and can often say “Yes!” when banks have said “No.”

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Tuesday, November 21, 2017

Hard Money Commercial Loans

When traditional loans are unavailable or will take too long to complete, hard money commercial loans will often suit the needs of borrowers quite nicely. Because they are easier to obtain for borrowers who do not qualify for traditional loans because of their credit, these loans are often an excellent short-term solution.

If you are a commercial developer and have recently hit a rough patch in terms of your personal or business credit, it is still very possible to obtain a loan to improve your properties or even purchase new ones. Hard money commercial loans have been filling in the gaps where traditional lending outlets have been failing.

These loans are typically financed at a higher interest rate, but they also have much lower requirements than traditional lender. Often, they do not even require the borrower to be credit worthy at all. Instead, the lenders will look at the value of the property itself. The lender will use the value of a potential resale of your commercial property as security toward the loan. That way, if something were to go wrong with the hard money commercial loan, they know that they could at least recuperate some of their investment by selling your property.

Another important aspect of these loans is that they are typically much shorter terms than a traditional loan. While the exact timeline of each loan is going to be different, and up for negotiation with the lender, most hard money commercial loans fall under three years. The most common timeframe, however, is right around a year. For smart developers, this is plenty of time to put that money to use, turn a profit and quickly pay it back. When done correctly, using a commercial loan in this way is essentially using someone else’s money to boost your revenue stream.

One characteristic of a loan of this type is the large balloon payment that is due at the end of the term. Many commercial loans offer terms that will allow a borrower to only pay interest during the term of the loan, with the balance then being due in full in one large payment at the end of the term. This allows for a borrower to utilize the entire amount of the loan and gives the borrower plenty of time to increase their revenue stream to cover the expense further down the road. However, this has the potential to be dangerous is the borrower runs into trouble.

What are the benefits of hard money commercial loans to the borrower?

Even though you are going to pay more in interest with a loan of this type, the true strength of it lies in the speed at which it is available, as well as the ease of securing one for all types of borrowers. While traditional loans can take weeks or months to acquire, hard money commercial loans can often be settled within a week. This allows for borrowers to be able to capitalize on opportunities that arise or to quickly access funds for the improvement of a property.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Tuesday, November 14, 2017

All You Need to Know About Hard Money Commercial Loans

If you are not able to qualify for a traditional commercial loan then you might be interested in looking into alternative lenders. Hard money commercial loans could be the solution that you are looking for.

Hard money commercial loans are non-traditional loans that are funded by private individuals or private investment groups. Often times these loans are sought out when a business is unable to qualify for a traditional loan due to poor credit or lack of credit. But there can also be other reasons to use a hard money loan such as the number of preexisting loans or the time in business. Investors also use hard money loans when time is critical to making a purchase. Being that the loan is not from a traditional lender, hard money commercial loans process much more quickly.

The factor that many borrowers find most attractive about a hard money loan is that the loan is asset based. This means that the deciding factor for loan approval is not the creditworthiness of the borrower but the value of the collateral for the loan. In most cases that collateral is the property being purchased. One other factor to consider when selecting a hard money loan is the loan to value rate. Because the lender wants to be certain that the collateral is always worth more than the balance on the loan, the loans are normally only granted for about 70% of the value of the property. This means that you are going to need to find the additional 30% of the purchase price in cash or by some other means. This can be a drawback for some buyers.

The Cost of hard Money

Because hard money commercial loans are not coming from a bank, they are not governed by the same rules and guidelines that lending institutions must abide by. That means that a hard money lender is basically free to charge whatever interest rate they feel is fair or will be accepted by borrowers. In most cases the interest rate is a good bit higher than what traditional lenders are charging. In some cases the rates can be as high as 30% but it varies due to the level of risk associated with the loan and the borrower.

The Reasons and Advantages to Use Hard Money

It is very true that hard money can come at a very high price. But it is also true that hard money lenders fill a need in the lending industry. Hard money is a legitimate option for a business which is new or has little credit history. It is also a viable solution for a company which is trying to build or rebuild credit but is still unable to obtain a traditional commercial loan. In addition, hard money loans can be requested, granted and funded much more quickly than a traditional loan. If you need money and need it quickly, then paying the higher cost of a hard money loan could be well worth the increased interest rate. You would always have the option to refinance with a traditional loan once the time constraint is behind you. Hard money loans are a great tool for investors and businesses as long as they are used wisely.

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

Learn To Be A Fix & Flip Investor

Featured Post

The Big Show is Coming to Town.

Thursday, May 10, 2018

How to Make Getting Hard Money Business Loans Quick and Easy

Saturday, April 14, 2018

Commercial Real Estate Loan Rates

Friday, March 30, 2018

How to Find the Right Commercial Real Estate Loans Online

Monday, December 4, 2017

What are Hard Money Commercial Loans and How Can They Help Your Business?

Hard money commercial loans are a great way to obtain needed funding to take your business to the next level. Read on to find out more about how these loans can get you the cash you need… fast.

If you are planning to use this type of loan to fix and flip investment properties, follow these tips.

After you’ve determined that you need this type of loan, don’t be hasty in finding the right lender.

Wednesday, November 29, 2017

Different Types of Hard Money Commercial Loans

Hard money commercial loans are a common go-to among developers and contractors for a variety of projects. These types of loans are often quick to both approval and funding, making them the perfect loan when capital is required in less than a week.

How Quick Can I Obtain Capital with a Hard Money Loan?

At Level 4 Funding, we work with hundreds of private hard money lenders that provide commercial loans for all types of projects.

Tuesday, November 21, 2017

Hard Money Commercial Loans

What are the benefits of hard money commercial loans to the borrower?

Tuesday, November 14, 2017

All You Need to Know About Hard Money Commercial Loans

If you are not able to qualify for a traditional commercial loan then you might be interested in looking into alternative lenders. Hard money commercial loans could be the solution that you are looking for.

The Cost of hard Money

The Reasons and Advantages to Use Hard Money

Pages

About Me

Blog Archive