Hard money refers to capital available outside of traditional lending institutions. A hard money loan is secured by the borrowers real estate assets. Investors use the loans to acquire needed capital to purchase or renovate a property.
Arizona Hard Money Lenders are private individuals or groups that have available capital for loans. Lenders primarily loan in certain geographic locations and have more lenient underwriting criteria. The main criteria is that there is a reasonable loan to value (LTV) and defined loan terms. These lenders are investors themselves and their investment comes in the form of the interest accrued on the loan. They are seeking better returns than traditional investments such as stocks and bonds.
Because Arizona Hard Money Lenders are not required to follow federal banking regulations they approve and release funds much quicker than traditional lenders. Although, they have an underwriting process, it is much simpler and requires much less documentation. Most lenders do not require tax returns to prove property is generating income—many borrowers run into this when dealing with a bank. Banks require all documentation of all properties and the income on tax returns. This can slow the approval process down tremendously. Most Arizona Hard Money Lenders can give immediate approval and funding within a week—whereas, a bank can easily take up to 45 days.
ARE ALL ARIZONA HARD MONEY LENDERS THE SAME?
Absolutely not. Because Arizona Hard Money Lenders are private lenders each has their own set of rules. Many lenders choose to only work locally, some choose a certain geographic area and others work nationwide. There will be some lenders that focus solely on fix and flips while others have a wider spectrum of specialization.
Just as Arizona Hard Money Lenders have different styles—they have different lending practices, as well. Lenders vary in the fees and expenses they asses. Some work with a higher LTV while others charge for preparing documents. Flexibility is a key component of the hard money lending business. Lenders can work loans on a case by case scenario. Although, they have their lending terms and requirements they can differentiate terms amongst borrowers.
Make sure you research lenders, as they are all very different and have different rules and regulations. For example, many lenders do not have prepayment penalties—others may. When inquiring about lenders make sure to ask about any fees that will be part of the loan. Don’t forget to gain a full understanding of late fees, as well.
Although, these loans are backed by the borrower’s property versus their credit and income—Arizona Hard Money Lenders do not want to have to foreclose on a property. In the case of default, a reputable lender will try to avoid foreclosure at all possible costs. When a borrower misses a payment, lenders will reach out and attempt to work with them. The key is communication. As in any financial situation where money has been borrowed—if you can’t make a payment, make a phone call and arrangements. Veteran lenders have dealt with this and can work with you to make your payment.
When you work with a Arizona Hard Money Lender, you are working with a person—not a team of faceless bankers.
Forming a personal relationship with your lender is the biggest benefit of hard money lending. You are both making the same investment and your lender wants you to succeed as much as you want to succeed. It’s a win-win when teaming up with a Arizona Hard Money 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
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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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