Why I Nearly Went Broke Flipping Houses, Broken Into, Robbed, and Unsured

Here are some of the things that caused me to fail and lose money on my Fix and Flip Properties

“Land Mines” that caused me to fail on flips over the year

• I didn’t check the back taxes. On one flip, I found out there was $20,000 in property taxes owed. That was a tough lesson.
• I underestimated how long it would take to fix up the property. I planned for 30 days, but it ended up taking 180. That hurt!
• I bought a house in a remote area called Sun City Festival. It was a nice place, but the nearest store was 25 miles away. It took 8 months to sell, and I just broke even.
• I trusted a contractor to do the job right, but he didn’t. He kept the money and even stole the appliances.
• I bought a condo and paid too much from the start. When I tried to sell, I realized I’d lose $10,000. So, I rented it out for two years before selling.
• I hired the wrong contractor to do the work. People often ask me how to find a good contractor. I usually get referrals from friends or other professionals I trust. My top rule is: “Don’t hire anyone who has nothing to lose if they mess up.” In other words, avoid hiring someone with no assets or stability. There’s a running joke in the trades that some plumbers, tile layers, and painters have drinking problems, which is why they work for themselves. I’ve actually hired tile layers who were so drunk they installed tiles upside down. On the other hand, I know a great tile layer who’s been sober for five years and does excellent work. Every time I hire him, I ask him directly if he’s still sober, and so far, he says yes. It took me a long time and a lot of money to learn that many people claim they can do the job, but just want to take advantage of you. Craigslist is full of these types. Most of the time, I use the biggest home improvement company for carpet, tile, appliances, and counters. They have a lot to lose if something goes wrong, and they make sure the work is done right. Who is it? Home Depot. Seriously, use them—they get the job done, and sometimes they have great sales on appliances, carpets, and countertops. It might cost a bit more, but I don’t mind. The work is done right, on time, and comes with a warranty.
• Never pay for labor in advance. Ignoring this rule has cost me a lot of money.
• Ask for references and actually call them. Hopefully, the reference isn’t just their mother.
• Don’t hire relatives. In my experience, they’re the most likely to take advantage of you.
• Buy appliances yourself and have the company handle the installation.
• Check their License. If someone says they’re licensed, make sure to verify it.
• Failed to get homeowner's insurance. Get insurance on your property as soon as possible. But be aware: most standard homeowner’s policies have an exclusion. If the home is vacant for more than 30 days, the coverage ends. You can get a rider to extend coverage, so ask your agent about it. I learned this the hard way when one of my flips was broken into, and tools, doors, and appliances were stolen. I thought, "Hot doggie, I have insurance." But when I called, the company kindly pointed out that the policy says, “no coverage after 30 days of vacancy” (you are out of luck). That was an expensive lesson. You are going to assume that your flip will be broken into and that items will be stolen.  So, plan for it. Plan to walk on the property every day.  Even if no one is working.  Need to keep a close eye on the home. I have come to flips to find the following: someone living in the home, the door unlocked, appliances stolen, the $1,000 front door gone, the neighbor swimming in the pool, the A/C gone, and the pool equipment gone.  It is tough out there. Things are going to get stolen. If it’s a rough area, I wait to bring in appliances until the new owner moves in. I’ll put a picture on the counter showing what’s coming and say it’s backordered.

Over the past 30 years, I've flipped many properties.  In most cases, I’ve made money on every flip.  It's been a joy to do his work, and my wife has come along with the journey. 

Matt Prosory RI/MLO/Broker
NCO Enterprises LLC
Private Hard Money
DBA Setabay/SetabayLoan/Level 4 Funding
26731 N 90th Drive
Peoria AZ 85383
Matt@Level4Funding.com
Telephone: 623-582-4444
NMLS 2062278 NMLS 1118493

Equal Housing Opportunity. This is not a Good Faith Estimate, and it is not a Guarantee to lend; it should not be considered as such. Costs, rates, estimates, and terms can only be determined after a full application is completed. To the extent this message includes any tax or legal advice, this message is not intended or written by the sender to be used, and cannot be used, for legal or tax purposes or advice. This is an advertisement. Copyright © 2026.  All rights reserved.

29% Interest Rates? How Trust Deeds Destroy Stock Returns, Trust Deed Investor, be the bank.

There are three parties mentioned in a deed of trust document:

1. the beneficiary (private money lender, you),

2. the trustee (usually a neutral party, such as a title company),

3. the trustor (the borrower).

The trustee holds specific powers under a Trust Deed. If the borrower defaults, the trustee may initiate a streamlined foreclosure process called a trustee’s sale. This process is typically faster and less costly than judicial foreclosure. (Team, 2026) At the trustee’s sale, the property may be purchased by a third-party bidder or revert to the lender. Ownership is then transferred to either the beneficiary or the winning bidder.

Benefits of Deeds of Trust Investing: Deeds of Trust typically offer higher returns than traditional bank or savings accounts, with annual yields ranging from 8% to 18%. (Trust Deed Investments Explained: How Investors Earn 10–13% Secured Returns, 2026) Each investment is secured by real estate collateral at a favorable loan-to-value ratio, usually 70% or less, providing added security. (Team, 2025) Investors can begin with as little as $50,000. (BSTN Fund One: A Private Real Estate Investment Fund, 2026) Unlike stocks or mutual funds, Deeds of Trust provide predictable monthly payments, which are deposited directly into your account or sent by check. This investment is not a get-rich-quick scheme; it operates similarly to a CD, with your funds committed for a fixed term, such as 6 to 60 months, after which your principal is returned.

High-yield Deed of Trust investments are suitable for private individuals, non-profits, corporations, pension plans, retirement funds, 401(k)s, IRAs, and SEP accounts.

Currently, professional real estate investors acquire properties at foreclosure prices and resell them for profit. These investments generally offer favorable returns with relatively low risk. Compared to other options with similar risk profiles, the likelihood of loss in Deed of Trust investing is minimal. (Trust Deed Investments Explained: How Investors Earn 10–13% Secured Returns, 2026)

If a borrower defaults and foreclosure occurs, Deeds of Trust investments are protected by real estate collateral. The investor assumes title to the property and may sell it to recover the investment. As the lien holder, the investor’s position is secured by the property.

Why do people invest in Trust Deeds?

Monthly Cash Flow: Trust Deed investments provide monthly interest payments while protecting your principal. In a recent survey, over 96% of our investors cited consistent cash flow as their primary reason for investing. (CrowdStreet, 2021) If monthly payments are reinvested, even at moderate rates, returns can compound significantly beyond the base rate.

Security is another key benefit of Trust Deed investing. When you invest in a first Trust Deed, your funds are backed by a specific property. Investments are typically funded at 75% or less of the property’s current market value, offering equity protection. (Team, 2025)

Easy to Do. If you have ever borrowed money from a bank, you understand the basics of Trust Deed investing. As a Trust Deed investor, you have simply switched seats to the lending side of the table. You are the bank.

Diversification: Trust Deeds allow investors to diversify into real estate without the responsibilities of property management. The borrower manages the property, including repairs, maintenance, and tenant relations, while you receive monthly payments.

Lower Volatility: Investing in a first Trust Deed through a reputable broker with a strong repayment history is considered safe and low-stress. Compared to the stock market, Trust Deeds are significantly less volatile. (DEED vs SPY: Performance Charts & Full Comparison, 2026)

Guarantees: The property is secured by title insurance, property insurance, and a personal guarantee from the borrower.

Matt Prosory RI/MLO/Broker
NCO Enterprises LLC
Private Hard Money
DBA Setabay/SetabayLoan/Level 4 Funding
26731 N 90th Drive
Peoria AZ 85383
Matt@Level4Funding.com
Level4funding.com
Telephone: 623-582-4444
NMLS 2062278 NMLS 1118493

References

Team, L. (2026). Judicial vs. Non-Judicial Foreclosure: Key Differences. LegalClarity. https://legalclarity.org/judicial-vs-non-judicial-foreclosure-key-differences/

(2026). Trust Deed Investments Explained: How Investors Earn 10–13% Secured Returns. KARPE. https://www.karpe.com/2026/02/03/trust-deed-investments-explained-how-investors-earn-10-13-secured-returns/

Team, L. (2025). How Trust Deed Investors Evaluate Risk and Return. LegalClarity. https://legalclarity.org/how-trust-deed-investors-evaluate-risk-and-return/

(2026). BSTN Fund One: A Private Real Estate Investment Fund. BSTN Fund One. https://bstnfund.com/one

(2026). Trust Deed Investments Explained: How Investors Earn 10–13% Secured Returns. KARPE. https://www.karpe.com/2026/02/03/trust-deed-investments-explained-how-investors-earn-10-13-secured-returns/

CrowdStreet. (January 27, 2021). CrowdStreet Unveils 2021 Investor Sentiment Survey Results and Investment Thesis. PR Newswire. https://www.prnewswire.com/news-releases/crowdstreet-unveils-2021-investor-sentiment-survey-results-and-investment-thesis-301216839.html

Team, L. (2025). How Trust Deed Investors Evaluate Risk and Return. LegalClarity. https://legalclarity.org/how-trust-deed-investors-evaluate-risk-and-return/

(2026). DEED vs SPY: Performance Charts & Full Comparison. PortfoliosLab. https://portfolioslab.com/tools/stock-comparison/DEED/SPY

Flipping Houses Successfully | The Exact Process That Works

Hello, my name is Dennis. I own a business and have over 44 years of experience helping business owners worldwide, from seven-figure enterprises to small businesses and startups that grew to millions in annual revenue.

Why do I do this work? Years ago, someone made a significant sacrifice to help me. I learned that real purpose and happiness come from giving, not taking. This drives me to help you reach your business goals and personal fulfillment. Serving others defines wealth and happiness. Your success is my success. With this in mind, I will share some challenges I've faced.

 

A few years ago, my wife and I lost everything: our business, home, and savings. We lived in our van and my office, facing lawsuits and asset seizures. Through this hardship, my wife's support never wavered. Eventually, we moved our belongings into storage and began life anew, determined to rebuild.

 

Despite working long hours, I realized I needed a new approach. I explored flipping homes and, with determination and education, created a strategy that worked. This guide is the result, designed to assist you.

House Flipping Mistakes That Can Bankrupt You | Do This Instead

 

Your Guide to Flipping Homes - 8 Things You Must Do To Be A Successful Home Flipper

 

Let's begin with step 1: Calculate your profit before you purchase the home.

The old saying is, “you make your profit when you purchase the home, not when you sell it.”  This means calculating the project's profit and loss before you purchase.  Determine the gain before you buy – work backward.  Do not do a project unless there is clear profit potential.

 

Calculate your profit/Loss.  The sales price minus costs is your profit.

Costs

Acquisition

• Purchase Price
• Back taxes and other lines
• HOA Fees (and HOA transfer fees)
• Keys
• Bid or Real Estate Fees
• Title closing costs

Repairs

• Contractor or do it yourself
• Appliances + much more

Holding

• Cost of your capital to hold                        
• Payments on hard money loans
• Utilities
• Insurance
• Maintenance

Selling

• Real Estate Commissions
• Staging
• Title closing costs
• Marketing plans

Administration

• Bookkeeping/accounting
• Other non-related expenses

Moving to step 2: Have a good team of Contractors/others to do the work.

• Suppliers
• Real Estate Agent (hopefully it will be you)
• Hard Money Lenders (give me a call)
• Insurance agents

Now on to step 3: Get educated.

Do not start buying homes without knowing the process.  The best way to get started is to get your Real Estate License.  Yes, it is work, but it will give you the knowledge you need to understand how homes are transferred and the laws associated with Real Estate.  Also, you will have access to the Multiple Listing Service, which is invaluable for your research.  Plus, you can avoid paying the seller's commission in full when you are the listing agent.  Every successful flipper I’ve ever met had a real estate license.  So, GET IT!

 

Next, step 4: Be patient.

Courthouse auctions once offered many properties daily; now, there are fewer. Explore alternative ways to find opportunities. Renovating and selling takes patience and time. Success is possible, but real estate requires precise timing.

 

Step 5: Have Money.

Be wary of claims about no-cash deals; they are mostly false. You’ll need your own capital. Hard money lenders often want 20–30% down and interest rates from 9–18%. Include these costs in your calculations. Though some advertise 100% LTC, it’s rare. Occasionally, hard money lenders share in profits, but still judge your experience and usually require at least 10% investment.

 

Step 6: Do not buy something you cannot fix or ever sell.

Many deals exist for a reason: some can't be fixed or sold, no matter the money or effort. Avoid homes with major, unchangeable issues, such as being near landfills, dumps, sewage plants, or major airports.

 

Now let's look at step 7: Buy your project through your LLC.

There are many tax and liability reasons to do this.  Plus, private money lenders prefer to lend to LLCs.

 

Finally, step 8: It is going to be work.

Don’t believe flipping shows. You must work hard and spend time on-site. Check progress often and visit daily after listing.

 

Matt Prosory RI/MLO/Broker

NCO Enterprises LLC

Private Hard Money

DBA Setabay/SetabayLoan/Level 4 Funding

26731 N 90th Drive

Peoria AZ 85383

Matt@Level4Funding.com

Level4funding.com

Telephone: 623-582-4444

NMLS 2062278 NMLS 1118493

Hard money loans vs banks what's difference What is a hard money loan?

 

A Private Hard Money Loan in Arizona is a type of secured loan that uses a hard asset as collateral.

In this video, we’ll show you how these loans work and what sets them apart from traditional loans. If you’re looking for ways to finance a property or business, it’s important to know how lenders use assets to secure debt. We’ll walk you through the main differences between hard money loans and standard financing. While traditional loans focus on your promise to pay, hard money loans Arizona are based on the value of the collateral. After watching, you’ll understand the key differences and be able to decide which option fits your investment goals. Subscribe for weekly real estate and lending tips, and let us know in the comments if you want more details about collateral requirements.

Private hard money loans differ from regular bank loans because they rely on assets as collateral. We’ll explain exactly how secured debt is different from just making a promise to pay.

Many borrowers mix up regular bank loans with asset-backed loans. Traditional loans look at your credit and your promise to repay, but hard money loan focus only on the value of the asset. This difference affects how lenders judge risk and decide whether to fund your real estate or business project.

In this video, you’ll see why private hard money loans always need real, physical collateral to back the debt. We’ll make the differences between these two types of loans clear, so you’ll know what lenders look for before they approve your funding.

 

Matt Prosory RI/MLO/Broker

NCO Enterprises LLC

Private Hard Money

DBA Setabay/SetabayLoan/Level 4 Funding

26731 N 90th Drive

Peoria AZ 85383

Matt@Level4Funding.com

Telephone: 623-582-4444

NMLS 2062278 NMLS 1118493

Equal Housing Opportunity. This is not a Good Faith Estimate, and it is not a Guarantee to lend; it should not be considered as such. Costs, rates, estimates, and terms can only be determined after a full application is completed. To the extent this message includes any tax or legal advice, this message is not intended or written by the sender to be used, and cannot be used, for legal or tax purposes or advice. This is an advertisement. Copyright © 2026.  All rights reserved.

Best Loans For Real Estate Investing

 

Beyond private financing, consider government loans, traditional lenders, and personal equity.

The overview below outlines popular loan options for investors, including those suitable for less-than-perfect credit.

203K Loan: Backed by the Federal Housing Administration, 203K loans are available to eligible buyers looking to purchase and rehabilitate older or damaged properties. Only owner-occupants may apply for this loan, and the property must require repairs that meet FHA standards.

Home Equity Loan: Homeowners with enough equity may qualify for a home equity loan or line of credit. Eligibility typically requires a solid credit profile and adequate collateral.

FHA Loan: Designed for those with imperfect credit or limited funds for a down payment, FHA loans are available only to buyers intending to occupy the property as their primary residence. Borrowers must meet FHA eligibility standards, including income and credit qualifications.

Traditional Mortgage Loan: These loans are available to qualified borrowers. Lenders require proof of income, a satisfactory credit score, and a sufficient down payment. Properties must meet lender standards.

A conforming loan is a mortgage within the FHFA limit and meets the guidelines of Freddie Mac and Fannie Mae. (FHFA Conforming Loan Limit Values, 2026)

Portfolio Loan: Portfolio loans remain with the original lender, offering more flexible approval criteria. Eligibility is based on the lender's internal guidelines, which may accommodate unique borrower situations. (How to Qualify for a Portfolio Loan: What Lenders Require, 2026)

VA Loan: VA loans are available to U.S. veterans, service members, and spouses. Issued by qualified lenders and guaranteed by the Department of Veterans Affairs, these loans guarantee up to 25 percent of the loan amount, with a maximum of $453,100. (VA Home Loan Entitlement and Limits, 2025) Borrowers may finance either the property's reasonable value or the purchase price, whichever is less, plus the funding fee.

Lender financing is a strong option for new investors, but patience and preparation are essential. Be sure to understand the approval process and requirements.

203K Loan: 203K loans, backed by the Federal Housing Administration, help eligible buyers purchase and rehabilitate older or damaged primary residences. These loans include the purchase price, estimated renovation costs, a 3.5 percent down payment, and funding for repairs, plus up to six months of mortgage payments. (FHA 203(k) Loan: Renovation Mortgage Guidelines, 2026)

This policy allows homeowners to pay the mortgage during rehabilitation if the property is uninhabitable. Eligible borrowers must use licensed contractors and consultants; do-it-yourself work is not permitted. Only owner-occupied properties with one to four units qualify; fix-and-flip properties do not.

Home Equity Loan

If investors have equity in their residence, they can obtain a loan against it. Home equity loans or Home Equity Lines of Credit (HELOC) use the property as collateral and can fund home repairs, education, or debt consolidation.

Home equity loans typically offer low interest rates tied to the prime rate. (Bank Prime Loan Rate | ALFRED | St. Louis Fed, 2026) Borrowers must have sufficient equity and meet credit standards. Flexible fund use and repayment options make these loans valuable for portfolio growth. (Dornan, 2026)

FHA Loan

The FHA loan is backed by the Federal Housing Administration. Eligibility requires meeting credit and income standards that are more flexible than those for conventional loans. FHA loans assist those with less-than-perfect credit or limited savings, requiring only a 3.5 percent down payment and offering competitive rates. owner-occupied homes, but they also permit purchases of multi-unit properties for owner-occupancy. Borrowers putting down less than 20 percent must pay private mortgage insurance. Loan limits for single-unit owner-occupied properties range from $294,515 to $679,650, depending on the market. (FHA Single-Family Insurable Limit Values, n.d.)

Private Money Lenders  or Hard Money Loans in Arizona

Investors who are well-connected can often tap into capital from personal connections, borrowing money at a specified interest rate and payback period. Private money lenders play a key role in supporting new investors. They provide capital and are often keen to establish mutually beneficial partnerships. Private money lenders provide funds at agreed interest rates and repayment terms, typically for terms of 6 months to 1 year. These loans are common for short-term projects. Use private money only with a clear exit strategy.

Seller Financing

Seller financing allows buyers to make payments directly to the seller, skipping traditional lenders. This can expedite sales for motivated sellers and help investors avoid standard mortgage requirements.

This arrangement often results in faster transactions and lower closing costs. Additionally, the seller can sell the promissory note if they prefer not to manage the financing.

Traditional Mortgage Loan

Traditional lenders, such as banks, offer both conventional and FHA loans. These options remain popular due to historically low interest rates.

Traditional lenders have strict guidelines. They require a 15 to 25 percent down payment, a minimum 680 credit score, and thorough income documentation. Investors must verify the source of funds and show they have held them for at least 60 days. Gifted funds are not allowed, which may limit some investors. (What Is Mortgage Seasoning And Its Requirements?, 2024) Fannie Mae and Freddie Mac set standardized rules for these loans. A "conforming" loan is one whose loan amount is below the limit set by the Federal Housing Finance Agency. In 2019, this limit is $484,350, though it is higher in certain markets such as New York or San Diego. (Agency, 2018)

Outside of the size of the loan itself, conforming loans are also characterized by the following:

• Loan-To-Value Ratio
• Debt-To-Income Ratio
• Credit Score & History
• Documentation criteria

Portfolio Loans

Portfolio loans remain with the original lender and are not sold on the secondary market. Borrowers can maintain a direct relationship with their lender and communicate openly. (Dornan, 2026)

Summary

Careful financial planning is essential in real estate investing. Investors should select the financing method that best fits each deal. Understanding various financing strategies builds confidence to start and grow.

Which real estate financing option do you find most compelling? Please share your thoughts in the comments.

Matt Prosory RI/MLO/Broker
NCO Enterprises LLC
Private Hard Money
DBA Setabay/SetabayLoan/Level 4 Funding
26731 N 90th Drive
Peoria AZ 85383
Matt@Level4Funding.com
Telephone: 623-582-4444
NMLS 2062278 NMLS 1118493

Equal Housing Opportunity. This is not a Good Faith Estimate, and it is not a Guarantee to lend; it should not be considered as such. Costs, rates, estimates, and terms can only be determined after a full application is completed. To the extent this message includes any tax or legal advice, this message is not intended or written by the sender to be used, and cannot be used, for legal or tax purposes or advice. This is an advertisement. Copyright © 2026.  All rights reserved.

References

(2026). FHFA Conforming Loan Limit Values. Federal Housing Finance Agency. https://www.fhfa.gov/data/conforming-loan-limit

(2026). How to Qualify for a Portfolio Loan: What Lenders Require. Paragraphs 1-8. https://legalclarity.org/how-to-qualify-for-a-portfolio-loan-what-lenders-require/

(2026). Bank Prime Loan Rate | ALFRED | St. Louis Fed. Section 'Bank Prime Loan Rate' showing updated prime rate as of July 2026. https://alfred.stlouisfed.org/series?seid=MPRIME

Dornan, B. (2026). Portfolio Loans 2026 | RefiGuide. https://www.refiguide.org/portfolio-loan-guide/

Dornan, B. (2026). Portfolio Loans 2026 | RefiGuide. Portfolio Loan Guide section. https://www.refiguide.org/portfolio-loan-guide/

A Guide To Different Types Real Estate Financing

 

Understanding real estate financing is as crucial as finding investments.

Many new investors lack familiarity with financing options, but funding is available regardless of your capital.

Real estate investing offers significant financial and personal benefits, including increased cash flow, property appreciation, and tax advantages. It is still a leading method for building wealth; according to the IRS, about 71 percent of Americans reporting over $1 million in income over the past 50 years were involved in real estate. (Service, 1986, pp. 1-65) However, new investors frequently struggle to secure financing before they can begin building wealth. Before exploring the various ways to finance real estate investment, it is important to understand the basics of real estate financing. The following sections describe common real estate financing options and prominent loan types.

What Is Real Estate Financing?

Real estate financing refers to the process by which investors secure funds for a property purchase or renovation. Like traditional financing, it involves particular terms and underwriting requirements that must be fully understood before entering into a contract.

How To Obtain Real Estate Investment Financing

A common misconception is that substantial capital is required to begin real estate investing. In reality, many financing options suit a range of investment needs. The funding method greatly affects the deal's outcome, so understanding financing is essential.

There are several ways to finance real estate investments, each with distinct benefits and drawbacks. Your choice should match your property and strategy. Not all options suit every investor, so research and select those that align with your goals. Broadening your financing knowledge increases investment accessibility. When uncertain, seek guidance from your network.

Real Estate Financing Options

Securing a profitable deal is vital in home flipping, but arranging financing is equally crucial. Once you find a suitable property, ensure you have funding ready. Financing a real estate deal can overwhelm new investors. With careful due diligence, many funding concerns can be managed.

If you have a strong investment opportunity, there are numerous ways to fund it. For example, a self-directed IRA is one option, though it requires careful planning. Below are several real estate financing options to consider:

Cash Financing:

Great for investors who have access to a significant amount of capital, either personally or through their network, and wish to purchase properties free and clear. Cash is an effective instrument for investors. Cash financing may result in more accepted offers, lower interest costs, increased cash flow, immediate equity, and potential reductions in the purchase price.

Private Money Lenders  or Hard Money Loans in Arizona

Investors who are well-connected can often tap into capital from personal connections, borrowing money at a specified interest rate and payback period. Private money lenders play a key role in supporting new investors. They provide capital and are often keen to establish mutually beneficial partnerships. Private money lenders provide funds at agreed interest rates and repayment terms, typically for terms of 6 months to 1 year. These loans are common for short-term projects. Use private money only with a clear exit strategy.

Accessible to investors who have less-than-perfect credit or financial history and are in need of a short-term loan. Hard money lenders, funded by private businesses and individuals, offer short-term, high-interest loans to real estate investors. This option is often used by those renovating properties who may not meet traditional bank credit standards. Is based on the value of the investment property, with lenders using the "After Repair Value" (ARV) to determine the loan amount. They typically fund 50 to 70 percent of the purchase price or ARV. (Agency, n.d.)

Hard money lenders charge additional fees, typically expressed as points (three to five percent of the loan amount), in addition to higher interest rates—often double those of traditional mortgages. (Hard Money Loans: How They Work and When to Use Them, 2023) Requirements vary, so investors must fully understand the terms before proceeding.

Self-Directed IRA Accounts:

Individuals who have elected to save through a self-directed IRA may decide to tap their account to access capital.

Seller Financing:

Buyers and sellers can sometimes strike a mutually advantageous agreement, allowing the investor and seller to avoid going through a private lender altogether.

Peer-To-Peer Lending

Peer-to-peer lending allows investors to borrow from individuals or groups, skipping traditional requirements. While similar to other lending methods, the process and terms can differ.

Peer-to-peer financing usually involves a lower loan-to-value ratio, which may limit the total amount borrowed. However, it delivers considerable flexibility for investors.

In the first quarter of 2016, all-cash homebuyers for single-family homes and condos paid, on average, 23 percent less per square foot than all homebuyers nationwide, according to RealtyTrac. (Sopielnikow, 2016)

It is important to assess when paying cash is appropriate and when alternative financing may be more beneficial. Use your capital strategically for the best results.

Self-Directed IRA Accounts

A self-directed IRA is a retirement savings account that allows for tax-free, compounded growth. Unlike other accounts, such as a 401(k), it enables owners to invest in a broad range of assets, including real estate.

Self-directed IRA owners can purchase, renovate, and sell properties without deferring taxes. However, withdrawals before age 60 usually incur penalties. (Hardships, early withdrawals, and loans | Internal Revenue Service, 2026)

Seller Financing

Seller financing allows buyers to make payments directly to the seller, skipping traditional lenders. This can expedite sales for motivated sellers and help investors avoid standard mortgage requirements.

This arrangement often results in faster transactions and lower closing costs. Additionally, the seller can sell the promissory note if they prefer not to manage the financing.

Matt Prosory RI/MLO/Broker
NCO Enterprises LLC
Private Hard Money
DBA Setabay/SetabayLoan/Level 4 Funding
26731 N 90th Drive
Peoria AZ 85383
Matt@Level4Funding.com
Telephone: 623-582-4444
NMLS 2062278 NMLS 1118493

Equal Housing Opportunity. This is not a Good Faith Estimate, and it is not a Guarantee to lend; it should not be considered as such. Costs, rates, estimates, and terms can only be determined after a full application is completed. To the extent this message includes any tax or legal advice, this message is not intended or written by the sender to be used, and cannot be used, for legal or tax purposes or advice. This is an advertisement. Copyright © 2026.  All rights reserved

References

Service, I. R. (1986). Statistics of Income (SOI) Bulletin: Personal Wealth Estimates, 1986. Statistics of Income Bulletin 6, pp. 1-65. https://www.irs.gov/pub/irs-soi/90rpsprbul.pdf

Sopielnikow, K. (April 27, 2016). All-Cash Homebuyers Paid 23 Percent Less in Q1: Report. FortuneBuilders. https://www.fortunebuilders.com/p/all-cash-homebuyers-paid-23-percent-less-in-q1-report/

Agency, F. H. (n.d.). Annual Housing Report. https://www.fhfa.gov/document/annual-housing-report-2020

(June 14, 2023). Hard Money Loans: How They Work and When to Use Them. Herring Bank. https://www.herringbank.com/learn/hard-money-loans/ 

(2026). Hardships, early withdrawals, and loans | Internal Revenue Service. IRS. https://www.irs.gov/retirement-plans/hardships-early-withdrawals-and-loans

(2026). FHA 203(k) Loan: Renovation Mortgage Guidelines. NerdWallet. https://www.nerdwallet.com/mortgages/learn/fha-203k-renovation-loan

(n.d.). FHA Single-Family Insurable Limit Values. https://www.fhfa.gov/sites/default/files/2024-07/FHFA-2023-Annual-Report-to-Congress.pdf

(2024). What Is Mortgage Seasoning And Its Requirements?. Bankrate. https://www.bankrate.com/mortgages/seasoning-requirements/

Agency, F. H. (November 26, 2018). FHFA Announces Maximum Conforming Loan Limits for 2019. FHFA News Release. https://www.fhfa.gov/news/news-release/fhfa-announces-maximum-conforming-loan-limits-for-2019

(2025). VA Home Loan Entitlement and Limits. VA Home Loan Entitlement and Limits. https://www.va.gov/housing-assistance/home-loans/loan-limits/

How to get a hard money loan. Follow the steps.

 By Matt Prosory Broker/RI 623-582-4444

NMLS 118493 AZMB 2062278
June 8, 2026  

Most real estate investors depend on Private Money to help fund their deals, usually through private money loans.

But where can you actually find this steady source of funding? Institutional loans often take a long time and can slow down a residential redeveloper's progress.

The main questions investors ask are how to find a private money lender in Arizona, how to convince them to lend you the Money you need, and how private lender financing actually works. Having access to real estate investment capital helps investors grow their businesses over time.

Below are the key things you need to know about private lender loans. Understanding these points will help you prepare for the process and make you appear more credible to potential lenders.

How to Acquire a Private Lender Loan

Private lender loans differ from traditional bank loans. Getting a private lender loan is not the same as getting a traditional bank loan. The process is different, too. We underwrite and fund a loan in as little as 7-21 days. Banks can take up to 90 days to accomplish the same thing. (Geraci, 2025) The timeframe offered by an Arizona private money lender is generally conducive to the deals a typical investor wants to finance.

Asset-based Lending: Private lenders focus mainly on the value of the property itself. This means you don't have to depend on your credit score to get a loan. (Team, 2025)

Control & Profitability: When you use private Money, you have more control over your loan and don't need to bring in equity partners. (Geraci, 2025)

Shorter-Term Loans: Private money loans usually have shorter terms than traditional loans, which can help you avoid late penalties. (Hayes, 2026) Guarantee of Capital: Private capital provides borrowers, especially independent investors, with a reliable way to grow their businesses. Having a steady source of funds is key for this.  

Understanding Private Loans

At Money and experience are the two most important things a private money investor needs. The best private lenders in Arizona usually have a solid real estate background and a history of finding good lending opportunities. Even more important, they tend to focus on local markets, since knowing the area well is crucial for success. (Geraci, 2025) Understanding where a market is headed is a valuable skill. Your Private Lending Business: Determining Deal Viability

Private lenders want to make Money, so managing risk is very important to them. Here are eight things they look at to decide if a loan opportunity is worth it:

• Market Value
• Borrower Credit
• Borrower Equity
• Additional Collateral
• Lien Priority
• Pricing Strategy
• Exit Strategy
• Due Diligence

You should consider all these factors before deciding to go after a loan opportunity. If you skip due diligence or ignore any of these points, you could face serious problems. Take your time and handle the process carefully.

Proper Documentation

Having the right paperwork for a private money loan is very important. Many people don't realize that the documents for an Arizona private money loan are similar to those for a regular loan. You'll need to sign a promissory note, a written promise to repay the loan, and a mortgage, which serves as collateral for the lender. For residential loans, you might also need an outside appraisal, a property inspection report, a geology inspection, and your financial records. Most private money lenders also want to see the property in person, which is why they usually focus on local deals. (Hard Money Loans Arizona | Hard Money & Private Money Lender, n.d.) A hard money lender's requirements may vary; standard documents are associated with every transaction. Typical loan documents include, but are not limited to:

Letter of Intent (LOI): A formal document that acknowledges that all parties are on the same page. It outlines an agreement between two or more parties before the deal is finalized. While it is not legally binding, it is a preventative measure for miscommunication.

Purchase & Sale Agreement: The purchase and sale agreement, or P&S agreement, is the document issued after both parties accept an offer that sets the final sale price and all purchase terms. Some items covered in the P&S agreement include the final sale price, earnest money details, closing date, title condition, contingencies, and more. Inclusions on the P&S contract will differ from state to state.

Preliminary Title Report: A title is a legal document listing the history of ownership of a home. After the buyer and seller have reached mutual acceptance, an attorney or title company will review the home's title to look for any problems that might prevent the home from being legally sold. The results are written up for the buyer in a preliminary title report. A description of this nature will reveal if anyone other than the seller has a legal claim to the property.

Title Insurance: Title insurance, as its name suggests, is a preventative measure that protects a buyer from anyone who challenges a property's ownership.

Proof of Funds: It represents a buyer's intent. It is a way for borrowers to demonstrate they have sufficient funds to complete a transaction. Typically, a bank statement, retirement account statement, or other legal form is acceptable.

Proof of Insurance: Proof of insurance is required for either a purchase or refinance to avoid a devastating loss.

Personal Guarantee: A personal guarantee requires the borrower to put some skin in the game. In other words, the borrower puts their assets (real estate, savings, etc.) on the line. Of course, this applies only when the borrower can't repay the loan.

Mortgage Note: A mortgage note is a promissory note secured by a mortgage loan. The loan structure is agreed upon, and the borrower signs the document.

Legal Documentation

A traditional one-page form note and two-page form deed of trust no longer address the myriad of issues in today's legal environment. Environmental problems, lending issues, and the enforceability of securities and protections must be addressed. (Arizona Association of REALTORS®: Seeking Real Estate Investors? Compliance with Securities Laws is Critical., 2020)

Legal documentation should be consistent with institutional lenders' employment practices, eliminating only provisions that may not be relevant or unnecessary. Additionally, special consideration must be given to a well-drafted broker's affidavit, especially in states where a licensed real estate broker must broker an otherwise unethical loan.

 Summary

Private Money can help investors fund deals when they don't have enough from traditional loans or their own cash. Private lenders are willing to lend if you can show that your investment will be profitable. You'll need to have the right paperwork to prove your deal is solid. If you do your homework and pay attention to details, you'll be close to getting your next private money loan in Arizona.

 

Matt Prosory RI/MLO/Broker
NCO Enterprises LLC
Private Hard Money
DBA Setabay/SetabayLoan/Level 4 Funding
26731 N 90th Drive
Peoria AZ 85383
Matt@Level4Funding.com
Telephone: 623-582-4444
NMLS 118493 AZMB 2062278

 

References

Geraci, A. (2025). Arizona Private Money Lending: Licensing, Compliance & Document Requirements. Automate Loan Docs. https://automateloandocs.com/pages/blog/arizona-private-lending-guide.html

Geraci, A. (2025). Arizona Private Money Lending: Licensing, Compliance & Document Requirements. Automate Loan Docs. https://automateloandocs.com/pages/blog/arizona-private-lending-guide.html

Team, L. (2025). How Hard Money Asset-Based Lenders Work. LegalClarity. https://legalclarity.org/how-hard-money-asset-based-lenders-work/

Geraci, A. (2025). Arizona Private Money Lending: Licensing, Compliance & Document Requirements. Automate Loan Docs. https://automateloandocs.com/pages/blog/arizona-private-lending-guide.html

Hayes, C. (2026). Real Estate Private Loans: Short-Term Financing Options and Trade-offs. Smarter.com. https://www.smarter.com/so-smart/real-estate-private-loans-short-term-financing-options-trade-offs

Bachas, N., Kim, O. & Yannelis, C. (2021). Loan Guarantees and Credit Supply. Journal of Financial Economics 139(3), pp. 872-894. https://doi.org/10.1016/j.jfineco.2020.08.008

(n.d.). Hard Money Loans Arizona | Hard Money & Private Money Lender. Metro Private Lending. https://metroprivatelending.com/

(April 21, 2020). Arizona Association of REALTORS®: Seeking Real Estate Investors? Compliance with Securities Laws is Critical.. Arizona Association of REALTORS®. https://www.aaronline.com/2020/04/22/seeking-real-estate-investors-compliance-with-securities-laws-is-critical/

Equal Housing Opportunity. This is not a Good Faith Estimate nor a Guarantee to lend and should not be considered as such. Costs, rates, estimates, and terms can only be determined after completing an application. Actual payments will vary based on your situation and current rates. APR for loans ranges from 7.99 - 29.5% and is based on Credit Score, Down Payment, LTV, and Income. Mortgage rates could change daily. For more accurate, personalized results, please call 623 582 4444 to speak with a licensed mortgage expert. Terms and conditions of all loan programs are subject to change without notice. NCO Enterprises LLC Dba Setabay Private Hard Money 26731 N 90th Drive Peoria, AZ 85383 Telephone: 623-582-4444 NMLS 2062278 NMLS 1118493 This email is for the exclusive use of the intended recipients and may contain privileged and confidential information. If you are not an intended recipient, please notify the sender, delete the email from your computer, and do not copy or disclose it to anyone else. Your receipt of this message is not intended to waive any applicable privilege. Neither this email nor any attachments establishes a client relationship, constitutes an electronic signature, or provides consent to contract electronically unless expressed by Matt Prosory, RI/CEO, in this email or an attachment. To the extent this message includes any tax or legal advice. This message is not intended or written by the sender to be used, and cannot be used, for legal or tax purposes or advice. This email is an advertisement.