How To Be Successful Using Hard Money Lenders in California To Flip Houses

The thought of making money can be intoxicating. It can make people believe nothing will go wrong or could go wrong. So to get the ball rolling, they use Hard Money Lenders in California rather than banks to fund multiple projects. But then the unexpected happens and trouble ensues.

Hard Money Lenders California--After you pound out the details of your business plan, it is easy to envision success. It is easy to see your plans being carried out and all the money you are going to make. So, when it comes down to getting started, it is not hard to be too excited and try to do too much. Your plan I spot on and can’t fail so why not hit the ground running?

Easy—because you never know what is going to happen. All sorts of problems can arise that make the best project turn into a dud. Sometimes, when one turns into a dud, there can be a domino effect. As you work to save one, you neglect the other, and it too fails.

An Investment Tale With Hard Money Lenders in California Gone Wrong

Bob and Jim are best friends living in Santa Barbara, California. After going to a weekend seminar on flipping houses, they feel confident that they can succeed and make a lot of money flipping houses. So, they call a friend in the real estate industry, and she presents them with three properties that would be perfect. They can’t make up their mind which to take so they decide to take all three.

After all, they know what they are doing so what can go wrong?

The deals have to be done now and can’t wait for a bank loan to be approved, so they decide to go with hard money lenders. Both recommend the friends stick with one house at a time, but they are determined to follow through on all three.

They complete the first one, but it takes longer to sell than they anticipated—and the offer was for a lot less. The buyer insists that a couple of repairs be made as well. With the cost of the additional repairs and the lowball offer, they end up only making a few hundred dollars.

Before they got to work on the first project, they gave a contractor a check to do the work on the second. After finishing the first, they go to inspect what they think is going to be a finished project to find out the contractor ripped them off. So now they have to pay another to get the work done. Upon completion, they find a buyer, but thanks to the first contractor, half the profit is eaten up.

At this point, they are not as excited, but neither likes to quit, and they want to see the final project through even though they are behind on every timetable they created. They find someone willing to take it off their hands as is, but they are going to lose a few hundred dollars.

Determined to succeed, they push through. The project takes longer, it costs more, and they end up taking a loss just to get rid of it (and the interest on the loan).

And The Lesson Is…

When you get started in real estate investing and working with Hard Money Lenders in California, take it easy. Don’t try to do too much too fast. Take your time getting your feet wet, so you don’t end up regretting it in the end.

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: hard money lenders in california,hard money lenders california

There’s Danger In Trying To Do Too Much Too Quick With Hard Money Lenders in California

The thought of making money can be intoxicating. It can make people believe nothing will go wrong or could go wrong. So to get the ball rolling, they use Hard Money Lenders in California rather than banks to fund multiple projects. But then the unexpected happens and trouble ensues.

Hard Money Lenders California--After you pound out the details of your business plan, it is easy to envision success. It is easy to see your plans being carried out and all the money you are going to make. So, when it comes down to getting started, it is not hard to be too excited and try to do too much. Your plan I spot on and can’t fail so why not hit the ground running?

Easy—because you never know what is going to happen. All sorts of problems can arise that make the best project turn into a dud. Sometimes, when one turns into a dud, there can be a domino effect. As you work to save one, you neglect the other, and it too fails.

An Investment Tale With Hard Money Lenders in California Gone Wrong

Bob and Jim are best friends living in Santa Barbara, California. After going to a weekend seminar on flipping houses, they feel confident that they can succeed and make a lot of money flipping houses. So, they call a friend in the real estate industry, and she presents them with three properties that would be perfect. They can’t make up their mind which to take so they decide to take all three.

After all, they know what they are doing so what can go wrong?

The deals have to be done now and can’t wait for a bank loan to be approved, so they decide to go with hard money lenders. Both recommend the friends stick with one house at a time, but they are determined to follow through on all three.

They complete the first one, but it takes longer to sell than they anticipated—and the offer was for a lot less. The buyer insists that a couple of repairs be made as well. With the cost of the additional repairs and the lowball offer, they end up only making a few hundred dollars.

Before they got to work on the first project, they gave a contractor a check to do the work on the second. After finishing the first, they go to inspect what they think is going to be a finished project to find out the contractor ripped them off. So now they have to pay another to get the work done. Upon completion, they find a buyer, but thanks to the first contractor, half the profit is eaten up.

At this point, they are not as excited, but neither likes to quit, and they want to see the final project through even though they are behind on every timetable they created. They find someone willing to take it off their hands as is, but they are going to lose a few hundred dollars.

Determined to succeed, they push through. The project takes longer, it costs more, and they end up taking a loss just to get rid of it (and the interest on the loan).

And The Lesson Is…

When you get started in real estate investing and working with Hard Money Lenders in California, take it easy. Don’t try to do too much too fast. Take your time getting your feet wet, so you don’t end up regretting it in the end.

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: california hard money lenders,hard money lenders in california,hard money lenders california

Hard Money Lenders California Hard Money Loans California

Why Choose Level 4 Funding for California Hard Money

For instance, starting out with the benefits, you will find out early on that these particular loans are approved and funded quickly, which is often the main reason people choose to use hard money lenders in California in the first place. The next benefit you will find is that hard money financing options have fewer requirements. This means that unlike traditional financing options or bank lending you will not have to deal with an exorbitant amount of red tape. Consequently, common red flags such as bad credit, a previous foreclosure or bankruptcies are less likely to harm your chances of getting approved.

Another major benefit to Hard Money loan California is the ability to get a project funded that you were unable to get funded or rather financed anywhere else. One common example is a fix and flip project. Often, banks are not interested in short-term lending. This is not to say that banks do not offer short-term options but rather that banks are in the business of making money and the easiest way to do that is to approve long-term loans more often. Furthermore, banks look at these kinds of projects such as a fix and flip as high-risk which only make getting financing harder.

The Pitfalls of a California Hard Money Lender

So now that we’ve covered the major benefits of all things hard money, let’s talk about those pesky pitfalls and disadvantages. The top disadvantage when dealing with hard money financing is of course that higher than average interest rate. But, in reality, just as banks need to make a profit and are concerned about high-risk borrowers, non-bank lenders need to see some return on their investment hence the higher rates. Disadvantage number 2 is the fact that hard money financing is only available for short-term use. This means if you are looking for financing for a project that others have deemed high-risk for more than 1-5 years you may have to look elsewhere.

California Commercial Hard Money

Lastly, hard money loans require either a minimum amount of equity i.e. at least 25% or a significant down payment. In the world of California Commercial Hard Money, that minimum amount becomes 40% and the down payment is much larger. This increase is ultimately due to the fact that if there is a default, selling the commercial property is much harder to do and often requires a discounted sale price in order to recoup what the non-bank lender lost.

Private California Hard Money Lender Requirements and Regulations

When dealing with a California private hard money lender there are several things you need to know to ensure that you are not falling victim to predatory lending. Moreover, let’s go over a few tips so you are not just borrowing blindly.

As you are probably already aware, hard money lenders, in essence, are still private money lenders. This means that your potential California private hard money lender is a non-bank lender. Historically, non-bank lenders have been able to lend money with limited regulations. Originally, this flexibility with California private hard money lender requirements made sense as the government shouldn’t be able to tell your father that he cannot lend you some cash for your start-up.

But, now financial reforms which were absolutely necessary after the real estate collapse means that there are some requirements when it comes to non-bank lending. For instance, the issue of mortgage licensing was not applicable to non-banker lenders i.e. individuals, companies and so on. Moreover, due to the almost overwhelming number of non-bank lenders in California, these new requirements have a lot of weight.

So what exactly do new regulations and requirements for potential borrowers and you? Well, for starters, there is now a fixed interest rate (the Usury law ensure that you will not be charge excessively high rates) that applies to these particular types of loans. In California, that “usury rate” is a maximum of ten percent per year. In addition to making sure that you aren’t financially drowning due to a commercial purchase or business purpose loan, etc., as previously mentioned, the issue of mortgage licensing now affects what type of property you can use hard money financing for. You also now need more documentation in order to properly secure your hard money loan than you once did.

The Benefits of Hard Money Loans California

Considering a hard money loan in California loan for your next commercial project or business plan? If that’s where your financing search is headed then it’s important to know the pros and cons.)         

By know you know Hard Money Lenders California are some of the most readily available hard money financing options, which is great for shopping around for the best rates and terms. But, in general, you may be wondering what exactly the benefits or rather advantages of hard money Lenders in California loans are? Moreover, you may also want to know exactly what the disadvantages are of these particular kinds of loans. Well, the good news is the benefits outweigh the disadvantages by far.

For instance, starting out with the benefits, you will find out early on that these particular loans are approved and funded quickly, which is often the main reason people choose to use hard money in the first place. The next benefit you will find is that hard money financing options have fewer requirements. This means that unlike traditional financing options or bank lending you will not have to deal with an exorbitant amount of red tape. Consequently, common red flags such as bad credit, a previous foreclosure or bankruptcies are less likely to harm your chances of getting approved.

Another major benefit to hard money is the ability to get a project funded that you were unable to get funded or rather financed anywhere else.  One common example is a fix and flip project. Often, banks are not interested in short-term lending. This is not to say that banks do not offer short-term options but rather that banks are in the business of making money and the easiest way to do that is to approve long-term loans more often. Furthermore, banks look at these kinds of projects such as a fix and flip as high-risk which only make getting financing harder.

How to find a California Private Hard Money Lender

(When it comes to finding a California private hard money lender, you probably don’t even know where to begin or rather how to start a viable search and that is okay. In California, there are so many lender options that you will more than likely need a helping hand.)

Generally, when you are trying to a reputable California private hard money lender the first place you should start is by checking the nationwide lender directory online. This particular directory allows you or anyone to search by loan type, loan size, location or keyword such as construction loan, etc. Moreover, this directory will provide you with direct access to your potential lenders in general or specific private non-bank lenders. In addition to searching for a private hard money lender California via the nationwide lender directory, you can also ask for references from your business associates.

Regardless, of which search method you choose to take advantage of, finding a few good names doesn’t mean you are done. Clearly, you need to contact at least your top 10 lenders and present each of them or the majority of them your loan scenario. Remember, it is important to find a lender that is likely to approve your loan request, but it is also important to work with someone that you feel comfortable working with.

Once you have set your sights on your future lender, the next step is clearly the application process. Nevertheless, it is still important to highlight that you make sure your future lender offers the commercial real estate loan type that is right for your business venture or project. By taking the time to make sure you have chosen your best option as well as the most compatible private lender you will ultimately save yourself a lot of time and money.

The Real Deal Residential Hard Money Lenders

Consequently, here is something you should definitely keep in mind when determining what kind of lender you should be working with. Above all else, it is important to note that residential hard money financing is appropriate in a variety of scenarios such as impaired credit, liens or judgments, time constraints, pending foreclosures and Foreign Nationals—just to name a few. Thus, if you are still interested in your residential hard money options, it helps to focus your lender search on niche lenders that can meet your needs (whatever they may be) and vice versus.
 

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.comhttp://www.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.