Commercial Hard Money Lenders: Who We Are and What We Offer

You may be new to the commercial investment property business or you may be a seasoned vet. Regardless of which category you fall under you need to check out commercial hard money lenders and see what they have to offer.

Commercial hard moneylenders are generally non-banking institutions i.e. private individuals or small groups that solely provide fast financing for such individuals as house flippers, developers and so on. Typically, most people that venture into the world of commercial real estate and investment properties are familiar with the term hard money. But, more than likely do not know exactly what a hard money loan is. This may sound strange, but the fact is unless you are in the business of flipping houses or a developer, hard money is a hard concept to follow.

In other words, you are not alone when asking the question just who exactly needs hard money? Moreover, how does hard money differ from standard financing? Well, the obvious answers are listed above. But, the in-depth answers are that hard money is for individuals who for a variety of reason cannot qualify or obtain conventional or rather standard loans/ financing and hard money differs from standard financing because there is simply less red tape.

All in all, this may sound like these particular individuals have bad credit or are just from a bank standpoint a bad investment, but the truth is this isn’t always the case. Nine times out of ten, the people that need hard money are those that need to move quickly on a property and often times need to borrow the full purchase price. Consequently, these people are often far from a “bad investment” as most commercial hard money lenders require their borrowers to back up hard money with real assets i.e. the collateral and credit are often more than there. In reality, it is often the banks that simply cannot move at the required speed necessary to allow the borrower to make a profit.

The Benefits of Hard Money

The clear benefit of hard money loans is that they are readily available. In fact, if you are able to find a few reputable commercial hard money lenders in your area, you can have the necessary financing in less than a couple of business days. Furthermore, due to the required turnaround time with hard money loans near perfect credit is simply not high on the list of borrower requirements and you are also not dealing with the standard processing team that comes with banks or conventional loans. Thus, this means you can get what you need when you need it without the hassle of dealing with a half a dozen people and jumping through a half a dozen hoops.

Commercial Hard Money Lenders can Offer a Helping Hand

Ultimately, dealing directly with your lender and having access to the money when you need it (within the timeframe you need it in) is what hard money is all about. Moreover, working with these particular niche lenders when you first start out means you can build your investment business much faster than you could without their assistance.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
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.

Commercial Hard Money Lenders: How To Get Your Loan To Close Swiftly

One of the worst parts about applying for any loan, not just one from commercial hard money lenders, is the time it takes to get it approved. The following are a few tips that can help you get your money faster.

One of the most frustrating parts about applying for a loan can be the time it takes to get it approved. Here you are, ready and raring to go, but you can’t do anything until you have some money. With commercial hard money lenders, the time is often a lot shorter since they do not have the same strict requirements as banks do.

However, that is not to say it can’t feel like it is taking too long for the lender to say yes. But if you want to do what you can to expedite the process there are a few tips you can follow.

How To Get Your Commercial Hard Money Lender To Approve Your Loan Faster

The tips may seem simple, but when you are working on getting a loan to help keep your business going it is easy to forget something that may seem like it should be second-nature:

1.    Do your homework. Find out what documents your lender is going to require before you start the process. So that way when the lender asks you for something, you will have it on hand.

2.    Don’t go overboard on documentation. People often like to work with the notion that it is better to have too much rather than not enough, but in this instance, that isn’t necessarily the case. You are better off sticking with only what the lender has requested. Keep whatever you do have on hand in case the lender wants it as they go over your application.

3.    Be ready for anything the lender may want or request. Maybe you know someone who has been shot down by this lender or perhaps you were not approved by a different lender. This, of course, only means something if you took care of the issues that got you rejected before applying again.

It may seem hard to believe, but people can forget to be prepared. But if you want to make sure nothing holds up your loan, do your homework, be prepared for anything, and don’t overload your application with paperwork.

4.     Be Nice To Your Lender. As kids, we get tired of hearing our parents, teachers, and counselors tell us to ‘kill ‘em with kindness’ but it is great advice. People are more apt to work with you and try to make something go smoother and quicker if you give them the respect they deserve. Commercial hard money lenders make money by approving loans and then making sure you pay them off in time.

They don’t want to make things harder or foreclose on you. Doing so only ensures that they do not make money or possibly even lose money. That being said, no one is going to go the extra mile for a rude person.

So mind your manners when dealing with your commercial hard money lender and the process—from beginning to end—will likely be easier and more pleasant for everyone.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
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.

Commercial Hard Money Lenders: How To Get A Loan With Rotten Credit

Rotten Credit Keeping You From Getting A Loan? Try Applying With Commercial Hard Money Lenders!

Poor credit can prevent many from even applying for a commercial loan, but it doesn’t need to. There is an option that is still available through commercial hard moneylenders.

People make mistakes with money. It happens. You don’t mean to (or maybe you did). Sometimes life just throws too many problems at you, and you couldn’t see another way out—or maybe you and your credit card were the life of the party in college.

So you developed bad credit while you were in college or your younger years. Now you are a responsible, hard-working adult that just wants to open your own business and be your own boss. It’s the American dream. Too bad your rotten credit rating is keeping you from getting approved for a traditional commercial loan.

But there is a solution to your problem—commercial hard money lenders!

What Is A Commercial Hard Money Lender?

Don't worry--you are not dealing with your local loan shark. So you don’t have to worry about someone trying to take out your kneecaps if you miss a couple of payments. No, commercial hard money lenders are legitimate, private individuals or companies that loan money to people and businesses with rotten credit who can’t get approved for a traditional loan.

Loans are secured by commercial property and will have higher interest rates than conventional loans. Since there is more risk involved for lenders, they can charge higher interest rates. It is not unusual to see a lender charge 11-13 percent and three points.

If you want to go into business for yourself, it is a cost you have no choice but to accept. You may hesitate because you don’t want to risk having your business foreclosed on, but lenders don’t want to foreclose on your property if they can at all avoid it. When they do, it is not unusual for them to lose money—and no one wants to lose money.

Beware The Fees And the Dreaded Balloon Payment!

Commercial hard money lenders are not going to be willing to wait 10-30 years to get their money back. They give short term loans; typically for a year, but maybe as long as three years. With the interest rates being as high as they are, if you can, it is not a bad idea to try and pay the loan off early—that is, unless there is an exit fee or prepayment penalty.

While it may sound strange to be penalized for paying a loan off early, lenders make money when you pay interest. If you pay the loan off early, you don’t pay as much interest. So to recoup this loss, some will charge a prepayment or early payment penalty.

Some will even charge exit fees whether you are paying the loan off early, late, or on time. This way lenders make a little more money off of you.

You will want to know if your loan has a balloon payment at the end. Where these can sting is if you are paying your loan off late, like many hard money loans often are. So along with the balloon payment you get stuck with a hefty late fee making it even more difficult to get the loan paid off.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
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.

Commercial Bridge Loan: How To Evaluate Risks vs. Benefits

Any form of financing is going to have some advantages and drawbacks to using it. Commercial bridge loans—like any other loan--have both.

In a perfect world, there are many things that business owners would never have to worry over. They would never have cash flow issues. They wouldn’t have to wait for their long-term financing to come through. If they needed to make any repairs or changed before they could get approved for a long-term loan, they would be inexpensive and easy to fix.

The list could go on and on, but the sad reality is that business owners often find themselves in need of cash for one reason or another before they can receive approval for their primary loan. A commercial bridge loan can help them bridge the time gap till the long-term loan is approved.

However, just like anything else in finance, a commercial bridge loan comes with drawbacks as well as benefits. It is important to know what they are ahead of time.

Benefits To Applying For A Commercial Bridge Loan

Of course, the biggest benefit is that your business gets a much-needed cash infusion, but there are other benefits to getting it through a commercial bridge loan. 

One of the more significant benefits is the very nature of the loan--it's short term. Short term means you have less time to pay off a loan and can only break the payments down so much, but it also means you pay less interest. With longer term loans there will be more of a chance you and your business fall on some hard times. If you struggle to recover and miss a few payments (or default) getting another loan in the future could be harder.

To keep repayment from being an issue, commercial bridge loans are often structured to be paid back when your long-term loan comes through. Making your payments will, of course, improve your credit rating which will make it easier for you to get your next loan.

Drawbacks Associated With Commercial Bridge Loans

One of the biggest drawback to commercial bridge loans is the most obvious. Since it is a short-term loan, the payments will be larger. Larger payments are more challenging to make, and since the term is shorter, lenders are often less likely to be flexible with payment arrangements. Instead, they will probably be more likely to tack on late fees and penalties making it even harder to make your payments.

Of course, you can get around payment issues by structuring the loan so you can pay it off after you receive our long term one. However, the longer you take to pay it off, the more interest accrues. Depending on the size of the loan, the interest can be significant.

The biggest potential drawback is the purpose of the loan itself. It is meant as a short term solution to help you cover expenses as you wait for your long-term loan to be approved. What if it gets turned down? What if, like many people were faced with during the housing crisis, the institution you are trying to get your long term loan through fails?

You still have to make your payments on time. Should you struggle with doing so, your credit rating may be adversely affected which will make it harder to get approved the next time you apply.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
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.

How To Make Money With A Commercial Bridge Loan

Commercial bridge loans can be a sound investment in the future, not just as a businessman in need of one, but as an investor looking to make his money grow without taking on too much risk.

You just got a nice bonus at work. As tempting as it would be to waste the money on a sports car, luxury vacations, or the most impressive home theater system ever built, you know you should do the smart thing and try to make your money grow. Make the right investment decisions and you can still have the vacations and home theater system after you retire and have time to use them.

But your buddy lost his shirt in a recent investment, and you are a little paranoid about suffering the same fate. What should you do? What has a limited amount of risk, but still has a decent gain?

Maybe you should get involved with a commercial real estate lender who approves commercial bridgeloans!

Why Commercial Bridge Loans?

What is a commercial bridge loan? It is not unusual for a business to need cash to keep from going into foreclosure or to cover costs while waiting for long-term financing to be approved. In those situations, a commercial bridge loan can be obtained. Since they are short-term and do come with a little more risk than a mortgage, the interest rate will be a little higher. So why should you invest in them?

If you allowed your money to be used for a commercial mortgage, you wouldn’t see it all again for a very long time. Commercial bridge loans, however, are short-term loans (often from as little as two weeks to three years) so you will see your money again a lot quicker than the 10-30 years it would take to get it all back from a commercial mortgage.

Loans are secured by commercial assets so should the borrower default your investment is safe. Your broker will have the loan placed in First Position, so a default does occur when the property goes up for auction you are paid first.

As the borrower makes payments, you will receive monthly payments as well a 6 percent yield. Most lenders will likely have no problem reinvesting it so that your money can keep working for you.

Is Investing In CommercialBridge Loans Worth The Risk?

If there were an investment that did not have some level of risk, it would have people waiting in line to get in. Everyone wants to earn money while not taking a chance on losing it. However, there is no such thing. Every investment will have some percentage of risk.

With a commercial bridge loan, your investment is secured by the commercial property the borrower used as collateral, but that does not mean the borrower is going to make every payment. Business could fall off, demand could slip, a scandal could taint the product or company, someone could embezzle money—there is a host of things that could go wrong.

Yes, there is the collateral that will be sold at auction, but there is no guarantee on how it will sell. So—is the risk worth the reward? Only you can answer that question.

 

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
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.

Commercial Mortgage: Tips and Tricks To Get Approved

Getting approved for a commercial mortgage can be challenging, but the process can be made easier by following certain tips.

Before you go into an interview, it is considered a good practice to find out as much as you can about your potential employers. Before taking a test, it can help to know what sort of questions an instructor likes to ask. Before taking a date to the movies, it is smart to know if she prefers comedies over action movies or romantic flicks over horror shows.

Just like job interviews, tests, and dates, the process of getting a commercial mortgage approved can go a lot smoother if you adhere to certain tips.

Tips To Help You Get Your Commercial Mortgage Approved

•    Location: Lenders prefer to enter into relationships with local businesses so don’t bother looking into any that are out of state or without an office in your metropolitan area. This doesn’t mean you can’t get approved by someone out of state, but you’ll get better terms from a local lender.

•    Don’t go with the first lender you see or talk to. There are a lot of potential lenders out there, and they all want your business. Terms can vary widely from one lender to the next, so you want to talk to a few and see who offers the best deal.

•    Be careful when dealing with private lenders. If they are pushing you to pay for fees upfront early in the process, there is a good chance they are crooks trying to run a scam.

•    Make sure you know how long your lender takes to approve loans. You want to ensure you allow enough time for it to get done before you need it. Expect it to take a while.

•    Only the lender can order an appraisal. So if you are working with a mortgage broker, don’t be talked into getting one.

•    If the lender wants you to get an appraisal, get a term sheet first. It is not legally binding, but it will give you an idea of what you are going to get before you pay for anything.

•    If you are not trying to get a loan through the bank you use, offer to switch your accounts to their institution should your loan get approved.

•    Be aware of any hidden costs your lender may charge before you even get the process started. No sense in wasting time if it is going to cost you money just to apply for a loan.

A Successful Approval Can Depend On Proper Documentation

No matter how many tips you follow or how many hoops you jump through, you will have a hard time getting your commercial mortgage approved if you can’t provide the lender with the appropriate documentation when asked.

At some point during the process, your lenders are going to want to see certain documentation. Whatever it is, make sure you have it on hand. One of the quickest ways to get turned down is to fail to provide something requested. So get organized and have it ready.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
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.

Commercial Mortgage: Things To Consider If You Need A Commercial Real Estate Loan

Applying for a commercial mortgage is not as simple as just filling out an application. There are things you will want to keep in mind before you get the process rolling.

You have already done the hard part—or at least you thought you had. You developed your business, started it, and turned it into a successful enterprise. So successful, in fact, that you find yourself contemplating doing something you never imagined when you started—expanding. If people in your city and the surrounding area love your product, folks in another city or state may love it too.

Of course, the old “you never know until you try” adage doesn’t work here. Why not? Well—because it will cost a bundle of money to find out; a bundle the lenders will want back even if you fail.

So you do the smart thing. You conduct some market surveys, do some product testing, and you identify the perfect place for you to open up another office. You’ve identified a location that interests you, you are working with a lender, and have the groundwork laid to buy the perfect site.

Now you need a commercial mortgage. However, before you start negotiating in earnest with a lender, there are a few things you need to consider—like the hidden costs.

Beware The Hidden Costs Of A Commercial Mortgage

As far as the costs of a commercial mortgage go, people are often most concerned about the interest rate. While it is important, it is not unusual or a lender to make it small, so the loan appears to be a great deal. It is a good deal as long as you don’t look too closely at the hidden costs. 

Hidden cost could include legal fees, survey charges, an application fee, appraisal fee, any item that will be charged against the loan. These can add up to a significant sum of money; money that the lender will want to be paid up front before you are approved or denied. So if you get turned down, you will have to pay them again when you apply elsewhere.

 What Else Should I Know Before I Sign?

Since you are signing over your business as collateral, you want to make sure you know everything you can before you sign the papers. Along with the hidden costs, the following are questions you should ask before taking on a commercial mortgage:

•    If the government raises interest rates is mine guaranteed to rise as well?

•    Can you get a fixed-rate?

•    Any bonus or incentive (i.e. a lower interest rate) for making a number of payments on time?

•    Is there a penalty if I refinance or pay off the mortgage early?

Whatever you do, make sure you don’t take on more than you can afford. Be realistic—maybe even pessimistic--with your revenue projections. Don’t put yourself in a situation where you can’t make your payments if you have an off month or two by shooting too high.

It sure would be a shame to lose your original business because your expansion plans did not work out as well or quickly as intended.

Dennis Dahlberg 
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
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.