Learn To Be A Fix & Flip Investor

Tuesday, October 9, 2018

Arizona Hard Money Lenders: Advice for House Flippers

If you are in the house flipping business, it is in your best interest to steer clear of conventional financing. The poor condition of any property you aim to purchase will likely mean you won't qualify for a traditional loan. Arizona Hard money lenders are perhaps the best financing option for those who are in the flipping business. Learn some things you should look for in your lender and what you can do to maximize the benefits of hard money.
Hard money providers use the value (or potential value) of the property being purchased to underwrite their loans. Therefore, hard money is ideal when it comes to financing flips because this type of lender can look past the current poor condition of your property.
In addition, when it comes to house flipping, hard money offers considerable advantages over other types of financing. In the case of foreclosures (i.e., the properties house flippers most often purchase) banks want buyers who can make full offers right away. Most hard money deals can close in a matter of days. This speed in loan closing makes hard money an ideal way to secure the best investment properties as quickly as possible.
But how do you know which Arizona Hard money lenders are the real deal?
Basically, you want a lender who can understand the potential of your project. Ideally, your lender should have expertise when it comes to renovation projects. If you are in the flipping business, you want a lender who can offer insight into your specific project, who will understand how to value your property after the repairs are carried out and can give you insight into the amount of financing you might need.
You also want to ensure your hard money deal closes as quickly as possible, so you can secure the best investment properties before your competition. So, the ideal lender should be a direct lender, that is someone who has the already funds on hand to fully finance your project.
But when it comes to speed, what are steps you can take to ensure your deal closes as quickly as possible?
What can you do as a borrower to take advantage of the speed offered by Arizona Hard money lenders and increase your eligibility?
In the first place have the numbers and the specific details of your renovation project worked out well in advance before you approach any lender. Know the particular aspects of the property you aim to purchase, the estimated cost of repairs you need to make and have a specific timetable worked out in advance.
Having a sense of the property’s potential gives you a sense of how much it might be worth after repairs, which will give your lender confidence.
Knowing the cost of the repairs you need to make; will also give a sense of how much financing you actually need. Hard money is expensive so have timetable in mind to get perspective on how long you will to carry the loan, as your aim should be to pay the loan off as quickly as possible.
Basically, the better your understanding of your specific project the more confidence your lender will have in you, and the faster your hard money deal can close.

In short, to get a hold of the best houses to flip, hard money is your best option. In the case of hard money, the ideal lender will have insight into your specific project. It is in your best interest to take advantage of the speed offered by this type of financing, so have all the details worked out in advance before approaching any lender.

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

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

Evaluating your options when it comes to Arizona Investment Property Financing

If you are just dipping your toes in the water when it comes to investing in real estate, you may be overwhelmed by the multitude of Arizona Investment Property financing options available.
The first option you might consider if you want to invest in real-estate is a conventional investment mortgage. An investment mortgage, is the same thing as a regular mortgage expect that it is used to purchase investment properties.
While an investment mortgage offers the lowest rates, the underwriting process takes a long time. In the worst case scenario, the sale of the property you were considering might go through, as you wait on your conventional lender to review reams of financial documents. So, if a conventional investment mortgage is the only financing option you consider, you could miss out on the best deals.
While conventional financing offers the lowest interest rates, these lenders have exceptionally high standards which many new investors may not be able to meet. The main issue comes down to credit, to get the best conventional investment mortgage possible your credit score should be over 700, the minimum is 620. So if your credit score is lower than 620, there is little to no chance you can qualify for an Arizona investment mortgage.
So if you can't qualify for a conventional Arizona Investment Property financing, can you still finance the purchase of an Arizona Investment Property?
Some investors draw equity from their primary residence to finance the purchase of their first Arizona Investment Property, while others secure loans from crowdfunding websites. Some investors may have friends or family members with deep pockets, who are willing to help and who can finance their first purchase.
Home equity lines of credit, crowdfunding, and personal loans are all options you could consider if you can't qualify for a conventional investment mortgage. However, of course there are drawbacks to consider.
With home equity loans, you put your primary residence at risk if you default. With crowdfunding there are not guarantees your loan will ever be fully funded and borrowing from close friends and family can put a severe strain on your relationships if you run into financial difficulties.
If you can, you should consider hard money which can be an excellent Arizona Investment Property financing option
This type of lender uses the value of the property you aim to purchase as a means to secure the loan. For this reason, hard money providers can look past your financial situation and your personal credit score, making hard money an option if you can't qualify for a conventional investment mortgage.
Unlike home equity loans, with hard money, there is often no need to pledge your primary residence as collateral. Most hard money providers have the funds on hand to fully finance your loan. So with hard money, unlike crowdfunding, there is no need to wait around for your loan to be fully financed. Unlike personal loans, you don’t risk your relationships with hard money.
While hard money is more expensive than other types of financing, it gives you options.
After you purchase your Arizona Investment Property, you can always refinance to a less expensive conventional loan after your financial situation improves.

So if your just getting started in real-estate investment and you can’t qualify elsewhere consider hard money as a potential financing option.

Rental Property Loans: Things to consider when it comes to Conforming Mortgages.

When it comes to rental property loans, conforming mortgages are the lowest cost financing option available. Learn about the basic providers of this type of financing, what they will expect from you as a borrower and whether or not this is the right financing option for you.
A "conforming mortgage" is essentially the same thing as a standard home loan. The main difference is that you the borrower use the loan to purchase an Arizona Investment Property instead of a primary residence. Because you are using the loan proceeds to buy an Arizona Investment Property, lenders charge more for this type of loan and expect more from you as a borrower. Simply put, you are going to pay your primary mortgage first and foremost before paying the mortgage on your Arizona Investment Property.
This added risk makes this type of loan a bit more expensive than a standard home loan.
When it comes to conforming mortgage providers, lenders fall into three broad categories, online, businesses investment lenders and traditional banks.
Online providers offer convenience when compared with the other two types of lenders because you don't have to go to a physical location to apply. With online lenders, you can complete the entire lending process from the comfort of your home. Business investment lenders are ideal for borrowers who are a, businesses and b, looking for greater flexibility. The other two types of mortgage providers don't usually lend for commercial or multifamily purchases. A traditional brick and mortar bank is best if you are looking for a provider with insight into your local market. In addition, one-on-one meetings with your lender in this situation, give you the opportunity to build a relationship, which you could leverage to secure a better deal.
In the case of Rental Property Loans, and specifically conforming mortgages, your eligibility will come down to a specific set criteria.
No matter which type of mortgage provider you choose there are basic standards borrowers should know before approaching any investment lender.
Basically, you can't have a credit score lower than 620. Don't have your debts take up more than 25 percent of your regular income, this is known as Debt to Income Ratio. If your debt to income ratio, it exceeds the 25 percent standard, expect your application to run into difficulties. If your score is lower than 620, or if you have a lot of outstanding debt you are better off considering alternative forms of financing.
When it comes to rental property loans, a standard conforming mortgage may not always the right help for you.
There are many situations where a "conforming mortgage," might not meet your needs.
Conforming mortgages, conform to the standards set by Fannie Mae and Freddie Mac. Therefore there are specific situations where no matter how great your credit is, you will not qualify for a conforming mortgage.
The property you aim to purchase may be in deplorable condition. No conforming mortgage lender will be able to approve a loan on a property that falls short of FHA guidelines.If the property you want to invest in is in shambles you should look into a rehab loan first.
Another situation is where you have 4 or more outstanding mortgages, the more mortgages you have the great scrutiny a lender will have give to your credit profile until you essentially need perfect credit to qualify. If this is your case, look into a blanket mortgage.

However, conforming mortgages are perhaps the most comfortable option for those just getting into the rental business. Before looking into a conforming mortgage, consider which type of lender can meet your needs, know the basic standards of qualification and whether or not a conforming mortgage is really best type of financing for your specific situation.

Dennis Dahlberg Mortgage Broker[3][2][2][2][2][2] Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

Things to consider about Rental Property Loans

If you are getting into the rental business, rental property loans, can be quite confusing. The following article will endeavor to clear up some confusion and attempt to answer the following questions: Where do you even start? What do you buy and who should you get advice from?
The first step before you even think about applying for an investment loan is to know your credit profile. Why? Because this will give you a sense of the amount of money you can qualify for and this amount will help guide your search for investment properties.
Review your credit score from all three major bureaus, Experian, Trans Union, Equifax, and do your best to dispute mistakes and clear up lingering debts. However, be wary, and consult with experts before you try to improve your credit score. Even the best-laid plans such as paying off old debts and closing old accounts might potentially have a negative impact on your score.
After you know your credit score and take steps to improve it as necessary you'll want to get a sense of how much "house you can" actually afford. That is you want to approach potential lenders and get an estimate about how financing you can actually qualify for, which help narrow your search for investment properties.
In the case of rental property loans, you can increase your eligibility by knowing the numbers before hand.
After you find a property, you might want to purchase you need to have an in-depth sense of the costs associated with your investment.
First, consider the cost of carrying your loan, can you afford to make monthly payments while you wait to secure a tenant? If not you might want to think twice before taking on a new loan. Do you think the property will need repairs in order to make it ‘habitable," if so you need to factor in the cost of repairs into the amount of financing you apply for, (i.e., You may need to borrow more money than you initially thought).
Above all ask the question, do you have enough cash on hand to make the 20 percent down payment needed for Arizona Investment Property loan? If not you might need to look at cheaper homes, or consider alternative steps to raise the necessary down payment.
Once you have a good sense of the numbers, you can start to take the following steps.
To increase your eligibility for rental properties loans, consider taking the following steps:
Your first job is to gather any relevant paperwork before beginning the application process. Typical documents needed include two months of bank statements, investment account or IRA statements, two months of pay stubs and other documents as requested by your lender.
Then you'll want to consult some experts. An accountant can help you avoid paying additional taxes on any rental income you may earn. In addition, you should also consult an attorney who can discuss strategies to protect from legal liability. Do your best to get plugged with other local real estate investors in your area; this will give you a sense of the market, and where to find the best deals.
After gathering the necessary paperwork and consulting with experts its time to get your loan pre-approved. It is always best to have your loan approved in writing before putting in an earnest offer; otherwise, sellers are prone to overlook your bid.
Once your offer is made, and your loan finally has closed, congrats you have just purchased your first rental property.

There are, of course, a lot of other things to consider but this article gives an underlying sense of the process involved with purchasing your first Arizona Investment Property.

Dennis Dahlberg Mortgage Broker[3][2][2][2][2] Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

The Differences between Unsecured vs.Secured Real Estate Lines of Credit

The main difference between unsecured and secured real estate lines of credit, comes down to how these loans are secured. Both loan types offer you a similar degree of flexibility and savings when compared to traditional financing. Evaluating the cost of both loan types can help you figure out which type of loan is right for your specific situation.
Your personal property provides security in the case secured lines of credit. Personal property can range from your primary residence to anything your business owns or some other form of collateral. With an unsecured line of credit, the loan isn't secured by anything except for your lender's estimation of your financial strength.
Now, why not just apply for a regular term mortgage to finance your next real-estate purchase?
With a term loan of any sort, a lump sum is given to you up front. No matter how much money you spend, you still need to make interest payments on the full loan amount. In addition, with term loans, you generally need to take a new loan out to finance each separate acquisition. A line of credit gives you far more flexibility. With a line of credit you only owe and pay interest on the amount you spend, and you don't need to apply for a new loan with every new purchase of real-estate.
Both unsecured and secured real estate lines of credit offer flexibility and savings over standard term loans, but there are some differences in terms of costs.
A secured line of credit is taken out and is secured by some form of collateral, which offers your lender a degree of safety should you default. By mitigating risk, lenders can provide lower interest payments on secured lines and larger credit limits. Nevertheless, with a secured loan of any sort, credit line or term loan, your personal or businesses assets at risk.
With unsecured credit lines you the borrower don't risk your personal property if you default. However, lenders need to protect themselves in some way, and so unsecured lines offer lower credit limits and entail higher interest rates, Unsecured lines also come with far more stringent qualifications versus their secured counterparts.
With secured and unsecured real estate lines its important to evaluate the costs of each loan type. This can help you determine which type of loan is right for your specific situation.
A secured line of credit is an excellent idea if you are confident you can pay back whatever you spend, as you don't want to lose your personal property in the course of expanding your business. Because secured lines offer lower interest payments and larger limits, it is probably best to employ a secured line of credit for making full offers on properties.
Unsecured lines may be more expensive, but they are an excellent way to reconcile differences between offers you want to make and the amount of cash you actually have on hand. You should employ unsecured lines only when necessary due to the higher interest payments involved.
In both cases having access to a credit line allows you to quickly close deals on investment properties. With a credit line, you don't need to wait on a lender to make a full offer, which can give you an edge over competing buyers who might need to wait on financing. In addition, credit lines can offer significant long-term savings over term loans because only pay back and pay interest on the amount that you spend.
As with any type of financing, consider the costs, the risks and the benefits of each type of credit line to figure out which one is right for your specific situation.

Dennis Dahlberg Mortgage Broker[3][2][2][2] Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

Learn To Be A Fix & Flip Investor

Featured Post

The Big Show is Coming to Town.

Tuesday, October 9, 2018

Arizona Hard Money Lenders: Advice for House Flippers

But how do you know which Arizona Hard money lenders are the real deal?

Evaluating your options when it comes to Arizona Investment Property Financing

If you are just dipping your toes in the water when it comes to investing in real estate, you may be overwhelmed by the multitude of Arizona Investment Property financing options available.

So if you can't qualify for a conventional Arizona Investment Property financing, can you still finance the purchase of an Arizona Investment Property?

If you can, you should consider hard money which can be an excellent Arizona Investment Property financing option

Rental Property Loans: Things to consider when it comes to Conforming Mortgages.

When it comes to rental property loans, conforming mortgages are the lowest cost financing option available. Learn about the basic providers of this type of financing, what they will expect from you as a borrower and whether or not this is the right financing option for you.

In the case of Rental Property Loans, and specifically conforming mortgages, your eligibility will come down to a specific set criteria.

When it comes to rental property loans, a standard conforming mortgage may not always the right help for you.

Things to consider about Rental Property Loans

If you are getting into the rental business, rental property loans, can be quite confusing. The following article will endeavor to clear up some confusion and attempt to answer the following questions: Where do you even start? What do you buy and who should you get advice from?

In the case of rental property loans, you can increase your eligibility by knowing the numbers before hand.

To increase your eligibility for rental properties loans, consider taking the following steps:

The Differences between Unsecured vs.Secured Real Estate Lines of Credit

Both unsecured and secured real estate lines of credit offer flexibility and savings over standard term loans, but there are some differences in terms of costs.

Pages

About Me

Blog Archive