Learn To Be A Fix and Flip Investor: March 2019

Sunday, March 31, 2019

TIRED OF BEING DENIED A BANK LOAN?

If you have tried to be approved by a bank, but keep getting denied—what can you do?

Are you ready to get out there and crush it in the real estate game? The first thing you must do is be approved for the financing of your project. Your creditworthiness may be enough for financing, but it may not be—and even if it is, will you be approved for as much as you need? Regardless, there are ways you can get financing no matter your situation.

First thing you need to know is not every bank is created equal. Banks have various lending programs. They will take your information and basically see what program they have that you may qualify for. The unfortunate part of this process is that it’s common to go through the pre approval process and then guess what? They will put a big, fat denial stamp on you. You may spend a lot of time bank hopping with hope in your heart only to get stamped with the big D once again.

The next logical step is to visit a broker. A lending broker will look at your situation and match you with a variety of banks and their programs. The problem is this will not be your primary residence. Banks aren’t comfortable lending on properties that will be rehabbed and sold—fix and flips. They also are hesitant when it comes to Arizona Construction Loans. So, where does that leave you now?

ARIZONA HARD MONEY LENDERS WANT TO LOAN YOU MONEY

A hard money lender is literally a lender that is also an investor. That means they have money to loan you and on that money they expect a nice return. These are higher interest rate, short-term loans — usually between 6 months to 3 years.

These loans are asset based. That means the property you are purchasing is used as collateral. Unlike banks who focus on your credit score and your income, Arizona Hard Money Lenders are not overly concerned with your financial situation. They will look into your financial history. However, hard money underwriting is a much simpler process than that of a bank.

In fact, because of the simplistic process of underwriting borrowers can receive approvals much faster than when using a bank—typically between 24 and 48 hours. Funds are generally released in less than 2 weeks. Again, much faster than a bank. A conventional mortgage can take up to 90 days to close. This speedy process allows borrowers to capitalize on prime property without the worry of losing it to a cash buyer.

Conventional financing works for many situations—however, when an investor wants to be a game changer in the real estate business they need to have access to fast cash.

Using a hard money lender versus traditional financing has many benefits: quick access to cash, less concern of your financial state of affairs and building a personal relationship with you lender— one that can lead to lower interest rates on future endeavors.

Dennis Dahlber Broker Ri CEO Level 4 Funding LLC 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.

Colorado Private Money Lenders Aren't Private, Here's Why!

Colorado Private Money Lenders are an open book, answering questions and explaining the Colorado Hard Money Loan process so you can feel comfortable with your loan terms.

Gone are the days of dodgy hard money lending. Today’s Colorado Private Money Lenders are up front with what they have to offer, the fees associated with using a Colorado Hard Money Loan, and why or why not it would be the right option for you.

Colorado Private Money Lenders can fund investment opportunities based on different criteria than big banks can and because of that are a great way for people to get the money they need quickly. Here’s what you can expect, and should learn, from your Colorado private money lender prior to getting a loan.

Interest in Your Investment Project

Just as Colorado Private Money Lenders are going to be up front with you, you need to be up front with us. We have expectations in regards to your plans for your investment project and will ask questions in order to know if it’s the right investment for our money. Be ready to present facts and figures!

Flexible Credit Requirements

We won’t badger you about a low credit score or a previous foreclosure. We want to know what you’re doing now with your finances and if that enables you to be a good borrower who can repay your loan.

Up Front Lending Terms

Our lending terms won’t be run of the mill like traditional lenders. We have wiggle room to tailor the loan to your specific project. Flexibility is the name of the game and we are able to create a loan that will work for both you and us. We will also be very transparent with our lending terms so you can make a well-informed decision.

Clear Repayment Plans

We know the best way for a loan to be successful is for the repayment plan to be clear. That’s why we work to ensure our borrowers understand their loan fully and are comfortable with the plan put into place.

As a Colorado private money lender, Level 4 Funding is dedicated to meeting borrower’s needs. We want to make honest, transparent agreements with people who have a vision for their project and make sound investment decisions. To learn more about our funding opportunities, give us a call today!

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 and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Did You Know Owner Occupied Colorado Hard Money Loans Exist?

Colorado Hard Money Loans aren’t just for investors, owner occupied Colorado Hard Money Loans are here to help people buy the house of their dreams!

It’s common knowledge that Colorado Hard Money Loans are a great way for investors to get the funds for their investment projects. But did you know that owner occupied Colorado Hard Money Loans exist? It’s true!

There are two types of owner occupied Colorado Hard Money Loans. First, it can be used to purchase a home if traditional lending isn’t an option. Second, it can be used for investment purposes. Here’s the run down!

Owner Occupied Residential Properties

We know that purchasing a home through a traditional lender means tough requirements that not everybody can meet. What an owner occupied Colorado Hard Money Loan will do is enable a buyer to make a purchase with less than desirable credit until they can secure permanent funding.

Here are some reasons you may want to use an owner occupied Colorado Hard Money Loan for your primary residence:

Bad credit, recent foreclosure, or short employment history.

We can look beyond the traditional requirements to see the value you bring to the table as a buyer and we can create a loan tailored to your needs and have flexible repayment plans that can tide you over until you qualify for a traditional home loan.

Owner Occupied Investment Properties

Here’s another fact about owner occupied Colorado Hard Money Loans - you can use them to buy a multi-unit property, occupy one of the units, and rent out the rest! This is a great way to use real estate as an investment because not only will it provide you monthly income, but it’s an easy way to manage a property yourself and save costs on a property management company.

We here at Level 4 Funding have helped countless investors and buyers get the money to make the purchase they dream about. If you want to discuss how an owner occupied Colorado Hard Money Loan could work for your situation, give us a call today!

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 and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

THE BEST LOANS FOR HOUSE FLIPPING

Hard money loans and bank loans are the most common financing when it comes to real estate. But, what is the best loan for fix and flip projects?

Depending on how many properties you are working with at a particular time will navigate what type of financing is necessary.

Initially, new investors go to banks for financing. Typically, they don’t look toward hard money or private money. If you are going to do this you will need to look for local portfolio lenders. These are local banks that lend their own money. These are not big banks such as Wells Fargo and Bank of America that will approve and lend on a mortgage, but later on will sell these mortgages. These are smaller, local banks that will keep the mortgage in-house. The benefits of these loans are the low interest rate. These rates run between 4% to 6.5% at any given time.

However, there are major drawbacks to these small bank loans. Initially, you will be required to put more money down. Typically, an investor will be looking at upwards of 25% down. That’s a big chunk of change. That 25% does not include all the fees that will have to be paid, as well—that is additional money required. To add on to that, the investor is left to pay for all repairs to the house. These types of loans do not cover rehabbing.

So, if the house is $100,000—the investor puts down $25,000. Let’s say the repairs are $20,000—that’s $20,000 the investor has to come up with out of their pocket. So far, that is $45,000 that an investor will have to pay on a $100,000 house. That just doesn’t make sense.

WHERE ELSE CAN I GO TO GET A LOAN?

Arizona Hard Money Lenders are an avenue that investors can choose to borrow from. This option works great for many investors. The rates from a hard money lender will definitely be more than that of a bank. Rates can run anywhere from 7.99%-15%. The great thing about Arizona Hard Money Lenders is they will lend you more money. It is common to hear of a hard money lender financing 90% of the purchase price. On that same $100,000 house that the bank only lent $75,000—a hard money lender will lend $90,000. On top of that, a hard money lender will finance the repairs on the property, unlike a bank loan. Many lenders will lend 100% of the repair costs. How that works is you get what is called “draws,” As you make the repairs, inspectors will come out—the hard money lender will study the report and then authorize the cost of the repair. Arizona Hard Money Lenders will lend on more than one property at a time. Also, Arizona Hard Money Lenders want to know they can trust an investor. Once they see a relationship forming, interest rates and points usually become more manageable.

Traditional mortgages can be a great tool for financing, however when it comes to properties that will be quickly rehabbed and sold using a bank loan just doesn’t make financial sense.

To find a hard money lender in your geographic area simply conduct a Google search and allow Google to know your location.

Denver is Booming and So Are Rentals

Rentals aren’t going out of style anytime soon. As an investor, rental properties are a fantastic way to bring in income. A Colorado rental property loan can make that a reality!

Denver is a hot spot for people who are looking to move to the mountains. Companies are buying up surrounding areas and bringing jobs, as well. All those people need places to live and renting is the way to go for some of them.

If you’re an investor, or want to become an investor, here are some tips for using your Colorado rental property loan to its maximum potential!

Know the Numbers

A rookie mistake that some rental investors make is to overestimate the value of their property. You may think that listing the property for a higher rent value means more monthly income, but that could lead to vacancies and price reductions that could hurt your bottom line. You want to know the area and the rent potential for your property like the back of your hand in order to be successful.

Understand Demographics

Renters are just as picky about the area they’re living in as buyers. They want to be close to shopping and transportation. For renters with families, they want to be close to good schools. Pick your properties strategically and in desirable neighborhoods to snag top dollar!

Don’t Over-Improve

Rentals are bound to need repairs and will have turnover so spending money on expensive upgrades isn’t the best use for your money. Instead hold onto that money for a new dishwasher if the old one breaks or to advertise for new tenants if you find yourself with a vacancy. Having a cash reserve is important for a rental investor and you definitely don’t want to put a large chunk of your Colorado rental property loan towards home upgrades.

If you’re choosing your properties strategically based on rental potential and location using your money for necessary upgrades rather than extra improvements, you’re on the right track to have great passive income from a rental property.

If you need a Colorado rental property loan in order to fund your property purchase, Level 4 Funding can do just that. Call us for more information today!

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 and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

WHO SHOULD USE HARD MONEY?

People often associate hard money with being hard to get. However, the “hard” relates to the hard asset that is used to secure the loan.

The hard asset that is used to secure the loan is used in place of the borrower’s credit score or income—this is what traditional lenders use to determine a borrower’s eligibility. It use to be that homeowners would use these loans when they were denied conventional financing—that is not as much the case anymore. Typically, real estate investors use hard money—they can use them to fix and flip a single family home and resell the distressed property, small commercial bridge loans and construction.

WHEN TO USE AND NOT USE HARD MONEY

A lot of investors don’t use hard money with their first deal—mainly because they aren’t well-informed about the process, but also if they have friends or family that will finance them, they usually choose that path. After seeing that they can only do one deal at a time using friend’s or family’s money—and wanting to ramp up their investments they typically find a hard money lender. Many investors use Texas Hard Money Loans for distressed properties that don’t qualify for conventional financing. Many borrowers use hard money when they qualify for a conventional loan, but need to close in a short amount of time.

Texas Hard Money Loans are not ideal for a foreclosure bail out. Being in a foreclosure situation and using hard money to fix the issue at hand will probably result in getting the borrower in even deeper. Texas Hard Money Loans are not usually used for a property that a borrower is going to have as their primary residence. Most Arizona Hard Money Lenders don’t like to lend to these types of situations. And, with the higher interest rate and short terms a hard money loan isn’t ideal for a primary residence.

The rehab of property is the most ideal project for the use of hard money. Most lenders will lend a portion of both the purchase price and the construction. However, there are some lenders that do not want to deal with the hassle of the construction inspection or the uncertainty of a property. Each lender has their own niche and it is the borrower’s responsibility to research lenders to find out the best match for them.

Texas Hard Money Loansare not for everyone. However, there are many ideal situations in where hard money makes sense.

If the goal is to simply find a distressed property and fix and flip—there is no better lender than a hard money lender. This is what most lenders focus on. There are Arizona Hard Money Lenders that focus primarily on construction, small business loans and even residential bridge loans. However, if a borrower is looking for a 15-30 year mortgage, hard money is not ideal.

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