Learn To Be A Fix & Flip Investor

Thursday, March 7, 2019

Why You Need to Beware of the 90-Day Rule with Texas Hard Money Loans

Texas Hard Money Loans are a great way to fund a fix-and-flips, but if you’re just getting into investing, it’s important to understand legal guidelines that can impact the sale of the property. One such example is the FHA’s 90-day rule, which prevents buyers from using an FHA loan if you haven’t owned the property for at least 90 days.

Lending options differ depending on what you intend to do with a home, which is one of the reasons why Texas Hard Money Loans are so popular with real estate investors. If you’re purchasing a home to live in, you’ll have a wealth of options to choose from. If you’re purchasing it for a fix-and-flip project, some of those options vaporize. One example of this is an FHA loan. Although you can’t get one as an investor because the property won’t be your primary residence (and you probably wouldn’t want to, but more on that later), those who wish to purchase your rehab might, and so FHA guidelines can impact you regardless.

The Federal Housing Administration (FHA) doesn’t lend money to home buyers, but does insure mortgages through various lenders. They essentially promise the lender that if the homeowner doesn’t make good on their obligations, the lender won’t get stuck with the bill. Because of their programs, even people with poor credit or minimal money for a down payment can qualify for a mortgage. In many cases, this puts homeownership within reach for a broader group of people; those who might not have otherwise been able to get into a home. Typically referred to as the “90-day rule,” the terms state “A property that is being resold 90 days or fewer following the sellers date of acquisition is not eligible for an FHA-insured mortgage.”

FHA Regulations Can Stop People from Buying, But They Don’t Stop You from Selling

The regulations are often referred to as anti-flipping rules, but don’t take this to mean the FHA sees you as the enemy. What they’re trying to avoid is having people purchase homes, do nothing to them, and then turn around and sell them for twice as much a month or so later. However, anyone who resells a property is considered a flipper, and those who invest sweat equity or make a home move-in ready for a family, particularly a distressed property, are doing something good for everyone. Moreover, if you’re using Texas Hard Money Loans to flip, these guidelines will not impact your purchase and they cannot prevent you from selling, even a week after you purchase, but they can stop someone from buying your rehab if they’re intending to use an FHA mortgage.

Assess the potential for FHA buyers and adopt an appropriate strategy to avoid the pitfalls.

FHA mortgages have a place, simply because they do help people, especially those with low and modest incomes. However, homebuyers pay for this privilege. They pay a big portion up front, and then have insurance payments added onto their mortgage each month. Depending on the amount borrowed, it could be hundreds of dollars each month. In other words, if you’re working in a high-income area, you can probably sell your flip without worry about someone needing FHA financing, but if you’re working in a low or middle-income area, you need to plan ahead for this if you anticipated selling your rehab in less than 90 days. You can use Texas Hard Money Loans to span much longer than this, but you’ll want to budget accordingly and make sure you can cover your payments while you wait for the 90-day period to end.

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.

Wednesday, March 6, 2019

Top 3 Work-at-Home Jobs Texas Hard Money Lenders Can Help You Land in 2019

If you’ve always wanted to work from home, 2019 can be the year you make your dreams come true by creating your own business. Learn what types of businesses Texas Hard Money Lenders are funding now.

1. Fix-and-Flips: If you’ve seen home rehab shows on TV, you’re already familiar with this concept and Texas Hard Money Lenders have been funding these types of deals for decades. Although the shows don’t go in-depth with the amount of work involved and a lot of stuff happens behind-the-scenes, fix-and-flips are a lucrative business for anyone with experience in home repair, real estate, project management, or related industries. People address it differently depending on their goals; whether they’d like to totally gut a distressed property or make minor cosmetic changes, and there are various strategies, such as turning it around quickly or renting it out for a steady income stream. Explore the options and decide which is right for your preferences and area of expertise.

2. Airbnb: Although short-term rentals started out as nothing more than people offering up space in their homes or renting out a vacation home when not in use, it’s big business now. This can be done in conjunction with a home rehab project or on its own. Our previous blogs go more in depth on this, but the average person renting a second home brings in more than $20,000 per year doing so. That’s pretty lucrative as a side gig, but imagine the possibilities of running two or more!

3. Cannabis: With states moving to legalize marijuana, wholesale cultivators are in great demand. The field is wide open. Pick up a plot of land and start an outdoor grow operation or invest a bit more to have additional crops and product that commands premium prices.

These Jobs are the Real Deal- Anyone Can Make Money with Them!

What’s truly amazing is that anyone can do these jobs. You don’t need to have a college education to be your own boss and earn serious cash, either in your free time or as a full-time career. Best of all, you don’t need to have a whole lot of cash stashed away to get started either— Texas Hard Money Lenders can get you the startup funds you need.

Weigh the pros and cons to find out if starting a home business is right for you.

Obviously, you’ll need to have an entrepreneurial mindset, do your homework before you jump in, and have some basic business skills in order to be successful as your own boss. Moreover, there are many ways to fund your startup. Working with Texas Hard Money Lenders tends to be best for those who can’t get funding through a bank due to the nature of their business or because they have rotten credit, and when someone needs to move quickly to get a good deal on real estate. However, if you’ve got a good mindset and can do the legwork involved in running a profitable business, 2019 can be the year you make it happen.

3 Things Texas Hard Money Lenders are Looking for in 2019

Knowing what Texas Hard Money Lenders are looking for will help ensure you get approved. If you do your homework and map out a solid plan, 2019 is going to be a successful year.

1. Experience. There are fewer opportunities to buy low and sell high than there were in recent months and years. If you’re in fix-and-flips or fix-and-holds, that means most of your money needs to come from the project itself. If you don’t already have experience in one of these areas and you plan to start this year, start by working with a partner or two. Not only will this increase your chances of getting funded, but it’ll eliminate the learning curve, so you reap bigger profits.

2. Smart investments. If you’re researching with a property in mind, stop for a moment and consider why you picked that property. If property values, demand, the condition of the property, and hard numbers are rolling through your head, you’re on the right track. If you had an emotional response to the question, then you’re getting in for the wrong reasons. That will likely show when you make your case with Texas Hard Money Lenders, so reevaluate your numbers and make sure they’re nailed down tight.

3. Diligence. If you’re purchasing a distressed property, make sure it can be purchased free and clear. If there’s any concern or confusion, speak with a title company in advance to find out what needs to be done to correct issues. It’s also helpful to bring on an appraiser and contractor if you aren’t experienced in these areas, to make sure you’re not overlooking any issues and are working with the right figures.

Adjust Your Expectations for the Changing Market

If you’ve worked with Texas Hard Money Lenders in the past, the general rules are the same. You can still get funded for a project that’s planned well, even if your credit isn’t great. However, because prices have risen and slowed, the details of your plan matter more than ever. While you may be able to find a really great property and profit from a smart buy, the bulk of your earnings will come from managing the project well and having a good exit strategy in place.

If you can work one successful deal, you can create a dozen.

Some say there’s no “magic formula” for real estate investing, and perhaps that’s true to some degree. Each property has unique needs and no two deals will ever be exactly the same. The one thing that doesn’t change is you. Some people are simply more successful than others, and that comes down to how they’ve refined their processes over time. They understand there will be challenges ahead and they plan for them. They know their numbers and evaluate each deal on its own merit. That not only makes them more successful in the biz, but is also why they have no trouble at all getting funded when they approach Texas Hard Money Lenders.

7 Reasons to Take out an Arizona Bridge Loan

Here's the age-old conundrum for real estate investors — how do I move on to my next project if I haven't closed on the current one? The answer? Arizona Bridge Loans.

Fix-and-flippers and homeowners who are ready to move both face a common problem: they're in limbo until they can sell their current property. When the market isn't cooperating, that limbo can stretch into months and even years. For homeowners, that means not being able to move and, for investors, it can mean missing out on other investment opportunities.

Thankfully, there's a fairly simple solution to this problem. Arizona Bridge Loans are loans designed to bridge the gap between one asset and the next. In other words, you can keep your current asset (a home or Commercial property, for instance) while moving on to your next asset. Here are seven reasons you might want to consider an Arizona Bridge Loan:

You need to move your family to a new area of town (or out of town) for work, but your current home hasn't closed yet.
You need funds to jump on a can't-miss fix-and-flip.
You need to stabilize your cash flow to stay on track financially.
You need a stopgap while you wait for conventional funding to come through.
You need a better alternative to getting an equity partner.
You need a line of credit from which you can withdraw funds over 120 days.
You need to start construction as quickly as possible.

How Do Arizona Bridge Loans Work?

So how do these types of loans work? They are short term — as little as three months and as long as 12 months (and rarely even 24 months). At the end of the terms, you either pay off the loan in full or, more likely, use refinancing to roll it into a longer-term loan. They can come from banks or from private investors. Bank loans typically offer lower interest rates but are more difficult to qualify for, while private loans have higher interest rates but don't have the same strict qualification requirements.

Getting an Arizona Bridge Loan

Need an Arizona Bridge Loan to fund a new home, an investment opportunity, or a construction project? Here at Level4Funding, we've been helping fund real estate dreams for decades and we offer some of the most competitive rates and terms in the country. You'll see loans of up to 90 percent loan-to-value ratio, terms that run between three and 24 months, and rates as low as 7.99 percent.

Tuesday, March 5, 2019

Showdown: Banks Versus Commercial Colorado Hard Money Lenders

Finding financing for your Commercial real estate purchase or renovation can be confusing. Let's look at two common options for financing: the banks and Commercial Colorado Hard Money Lenders.

Banks are the tried-and-true option for financing, whether it's a mortgage, a small business loan, or a Bridge Loan. They're the first-place people think about when they consider getting funding. Like all funding sources, they come with a range of pros and cons.

On the positive side, banks are well-established institutions, so funding from them can be counted on as secure. Because they work in bulk and are backed by solid sources, they can offer some of the lowest rates in the country and their fees are usually comparatively minimal. Their terms are set in stone, which can be a double-edged sword. You'll know exactly what you're getting up front, but it doesn't leave much room for negotiation and doesn't allow them to tailor the loan to your situation.

Commercial bank loans are also quite difficult to qualify for. They have benchmarks by which they measure your risk. If you don't live up to them, you're out. You'll need a spotless credit score, a healthy account, and a financial history that's free from any blemishes. For this reason, bank loans are best for investors who have great credit and no foreclosures, short sales, or bankruptcies in their past.

The Pros and Cons of Going with a Commercial Hard Money Lender

One alternative to bank lenders are Commercial Colorado Hard Money Lenders. Colorado Hard Money Loans come from private sources, so they aren't as subject to regulations as funding from a bank or credit union. This gives them a variety of benefits. They're much easier to qualify for — hard money is secured by collateral, so lenders are less interested in your history and your credit score and more interested in your plans. Even if you've had a bankruptcy or foreclosure in your past, you may still qualify for hard money.

Colorado Hard Money Loans also come through much more quickly. You can get pre-approved instantly, approved completely in a matter of days, and have the money in your account in 10-15 days.

On the con side, Colorado Hard Money Loans come with higher interest rates and shorter terms, usually around one year.

Commercial Colorado Hard Money Lenders in Colorado

As Commercial Colorado Hard Money Lenders in Colorado, we offer some of the most competitive rates and terms in the country. Our Commercial loans go up to a 90 percent loan-to-value ratio, flexible 3-60 month terms, and low-interest rates. We can fund your development! Give us a call to get started.

3 Options for Getting a Colorado Commercial Real Estate Loan

Thinking about buying or renovating a piece of Commercial real estate? Unless you've got deep pockets, you'll need to find a Colorado Commercial Real Estate Loan to finance it. Here are a few options to get you started.

There's no such thing as a one-size-fits-all Commercial loan. They all vary in terms of the eligibility requirements, the amount you can get, how long it will take, and the rates. Here are a few of the most common:

Traditional Financial Institutions. Bank loans are the first thing most people think about when they consider getting financing. There's a good reason for that — they can usually get you more money, lower rates, and fewer fees. However, they can be really hard to get. Typically, they're reserved for people with a spotless financial history, a blemish-free credit score, and, in the case of Commercial properties, a profitable business.
Arizona Bridge Loans. Arizona Bridge Loans are short-term loans that are used to cover the purchase or renovation of a Commercial property. The interest rates are a little higher and the terms are shorter, but they are usually easier to qualify for. The idea is to get an Arizona Bridge Loan while you are waiting for other, longer-term financing.
Colorado Hard Money Loans. Hard money Colorado Commercial Real Estate Loans come from private investors, so they operate outside of the strict regulations of the conventional lending institutions. This gives them a number of distinct advantages over the banks. The qualification requirements are lower, the terms are shorter, and the process is much faster.

The Advantages a Hard Money Colorado Commercial Real Estate Loan

As we touched on above, Colorado Hard Money Loans are ideal for people who need to get their funding quickly and people who will be able to pay the loan back in a relatively short period of time. With a Colorado Hard Money Loan, you put property up as collateral, so lenders are less concerned about digging into your past or making sure your credit score is spotless. Of course, there is more risk for the hard money lender, so interest rates are higher than what you'd get with a bank loan.

Finding a Colorado Commercial Real Estate Loan

Opening or renovating a Commercial property in Colorado? You've come to the right place. We guarantee the best rates in the state on Colorado Commercial Real Estate Loans and we've been doing it for decades. Sit down with us today — we'll listen to your plans and find a way to help you get the financing you need.