This type lender is the rare species in the real estate field—Arizona Hard money loans are everywhere, but few are funded at 100 % Loan-to-Value. Interested? Need this kind of deal if you can find it? Be prepared for some hard work.
Loan-to-Value Arizona Hard money loans are not difficult to find, but in most cases, the cutoff ends at 65 percent of the property’s value, not 100. A statement saying the company offers complete financing, as would be lenders have discovered, actually may be offering 100 percent of appraised value or perhaps 80 percent with a bridge loan thrown in to cover the gap.
There are good solid reasons for this. First, the risk is very high for the lender who has no means of recoup if the borrower is putting nothing down. The would-be borrower may be neither financially capable nor solvent. Finally, the borrower could be inexperienced in the field and could easily make costly mistakes the lender would have to assume.
However, 100% LtV Arizona hard money lenders do exist and have their own methods for operating in an area that is known as risk-filled, confusing and tends to have rules that they stick to just as tightly as a bank would.
First, let’s talk about what these lenders offer that differs from others:
-Speed: they can close in less than five business days and sometime within 48 hours.
-Qualifications: they look at your project and the amount of the LtV, not your credit and income.
-Documentation: you won’t put miles on your car, spend hours on the phone and have an aching back from carrying the load of paperwork required; this type loan doesn’t require the ton of documents that traditional financing does.
-Loan terms: unlike the banks again, these loans have repayment terms of 12 to 48 months, not a stretch of 30 years with interest equaling more than principal.
Hard money is normally dispensed by individual investors or a group of investors going in together as opposed to a huge corporate bank. This allows for a very flexible structure in the loan agreement—both funder and client can omit terms they find undesirable, allowing some very individualized deals to be funded and set up.
If you not only find a 100% LtV Arizona Hard Money Lender, but work with this person or business again and again, you may receive purchase money in less than a full business day. As a buyer this is a decisive advantage to have in a sizzling hot market over other more traditional purchasers. But as in other areas, experience counts here since most lenders who do 100% loan-to-cost will only work with an experienced investor--new investors minus money and lacking background will have a lot of problems finding funding of those sort.
100 percent funding is again that rare thing in the commercial real estate business—it is also not set up for long term deals but more for the fix-and-flip project. After all, if you’re aiming to sell your property in a short period of time, a non-traditional lender would be more interested in setting you up seeing their way through at the very beginning.
Should I pursue this area of funding? If you are grounded in the real estate business world, have funding to put down and don’t mind having to practically get a detective’s license to find the person you want to conduct business with, go after that 100% LtV hard money lender. It could be one of the better decisions you have ever made.
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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