Learn To Be A Fix and Flip Investor: August 2019

Saturday, August 31, 2019

Buy and Hold Properties: Get Yourself Great Tenants

A buy and hold property can bring great long term income, but only if you get great tenants. Here’s some ways to make sure you’re selecting tenants using proper criteria.

Many investors focus on Arizona fix and flip opportunities but there is also the prospect of holding a property beyond your initial Arizona hard money loan, obtaining a traditional loan for the mortgage, and take in long term rental income.

A buy and hold property is only as good as the tenants who reside there. Your selection criteria should help you determine who is going to be a stable occupant who will be able to meet the terms of your rental contract.

Make Your Selection Parameters

Here are a couple of things you’ll need to consider when outlining your selection criteria:

· Ideal income to rent ratio

· Minimum credit score

· Background check result considerations

· Personal and rental references

Pre-Screen to Save Time

You don’t have to carefully consider every potential tenant which can waste your time and theirs. Some will show red flags straight away. Getting them on the phone and asking a few up front questions can help you narrow down who is most suited for your property. You’ll still have to run credit and background checks, but if they tell you from day one that they have less than ideal credit, you can cross them off the list.

Perform Due Diligence on Applicants

We would like to think that everyone will provide completely truthful information on an application, but that isn’t the reality. You’ll want to confirm employment and references for accuracy.

In order to obtain a buy and hold rental property it may be best to use a Arizona hard money loan prior to qualifying for a traditional loan. Hard money lenders like us can fund in as little as a week so you can get started on any rehab for the property and get tenants in as quickly as possible. Call us today to find out more about securing a Arizona hard money loan!

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: 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.
© 2019 Level 4 Funding LLC. All Rights Reserved.

3 Pitfalls of Arizona fix and flip Investments

To get the most out of your private money loan you’ll want to avoid these 3 things in order to bring yourself the most success with your investment.

Arizona fix and flips need to be carefully planned and executed in order to bring the highest return on investment possible. There are a lot of moving pieces and each needs to be managed so time schedules and budgets don’t get away from you. There are a few problems that investors run into that can kill the proceeds on a Arizona fix and flip.

To make sure you can pay off your private money loan and then some, stay away from these 4 pitfalls of Arizona fix and flip investments.

Pitfall 1: Not Having Support

If you aren’t going into a Arizona fix and flip with a great team behind you, you’re going to run into issues. You want to have a stack of trusted vendors at the ready so you can address things when they happen. Most Arizona fix and flip teams will consist of a contractor, lawyer, realtor, and lender to fund the private money loan. Having backups will also be helpful in case your go-to person isn’t available when you need them.

Pitfall 2: Not Scrutinizing Your Contractor

The general contractor you work with for your Arizona fix and flip is arguably the most important person on your team. The contractor can make or break your Arizona fix and flip by either keeping you on schedule or getting behind, sticking to your budget or overspending. You should be vetting your contractor by interviewing past clients and, if possible, visiting past work sites to see their work.

Pitfall 2: Holding the Property

We know that once you’ve completed your flip, you want to get top dollar on the sale. You may even have some emotional attachment to the property that you have spent weeks or months renovating. That being said, you want to get an acceptable offer and move forward quickly. If you hold out for an extended period of time just trying to get a few more thousand dollars out of a buyer, you can end up losing money on monthly expenses like HOA and utilities.

We love to work with investors who have plans for a successful flip and would love to hear yours. Call Level 4 Funding today!

Study Up! Here are Hard Money Lending Terms to Know

If you’re new to hard money lending and investing through private money loans you’ll want to know some of the terminology so you can speak to lenders to determine project funding.

Veteran investors will tell anyone who’s new to the game that it’s incredibly important to know the lingo when you are going to interview your first Arizona private money lender . Your first investment experience can be intimidating, but if you study up on these terms you’ll feel confident in presenting your project and being able to respond to the questions that the Arizona private money lender will have for you.

· After Rehab Value (ARV) – What the house is expected to be worth after renovation

· Appraisal – A professional’s valuation of the property in its current condition, and its potential value after rehabilitation

· Crowdfunding – A group of lenders who work together to fund a loan

· Default – The inability to meet the terms of a loan

· Escrow – The account that holds funds in between lender payment and borrower withdrawal

· Lien – A legal entitlement to an asset

· Liquidity – How quickly an asset can be sold

· Loan to Value (LTV) – It is a number found by dividing the loan amount by the appraised value

· Maturity/Loan Term – When the loan is contractually expected to be paid off

· Proof of Funds – A document that a borrower uses to show available funds

· Return on Investment (ROI) – The ability for an investment to make money beyond what has been spent

· Title – Legal proof of ownership of an asset

· Underwriting – How lenders determine whether a loan should be funded by comparing project plans to potential profitability

These are some of the most common terms that you will come across when speaking with a Arizona private money lender when you’re discussing a potential investment project. If you are able to understand and use these terms in conversation while pitching your project you will have a leg up on other first-time investors who aren’t able to talk the talk.

If you’d like to set up an appointment to pitch us your Arizona fix and flip investment project, give Level 4 Funding today. We’d love to hear your plan and see if we can work together to make your investment dreams come true!

Steps to Getting a Hard Money Loan

Obtaining a hard money loan is different that working with a traditional lender. Here’s what to expect when obtaining a hard money loan for your real estate investment project.

Whether you’re looking to invest in a commercial property or a residential Arizona fix and flip, a hard money loan will allow you to purchase the property quickly and without the red tape that can be a road block to obtaining a traditional loan.

Because hard money loans are based on different factors and isn’t funded through a bank the process will be different than if you were applying for a home mortgage. Here are the steps to obtaining a hard money loan that you can expect!

Step 1: Interview and Presentation

The first step will be to interview the lender and present your plan for the Arizona hard money loan. This is your opportunity to vet the lender for your own peace of mind and for them to know that your investment is a good funding opportunity.

Step 2: Underwriting

This part of the process is where the lender will review your project plan and appraise the property for its After Repair Value, determining how much they can lend on the property. If the underwriter approves of the investment project they will move the loan to the funding step.

Step 3: Loan Funding

For the loan to close and be funded the borrower will need to sign documentation so that the property can be purchased, usually via a wire transfer of the Arizona hard money loan, and the loan can be settled.

Step 4: Loan Draw

A schedule will need to be determined by both the borrower and the contractor to fund the actual project, creating an allocation timeline of the Arizona hard money loan.

Step 5: Payoff

Last but not least, you’ll pay off your Arizona hard money loan following the sale of your property!

Once you’ve completed all 5 steps of your Arizona hard money loan it’ll be time to find your next investment! Give Level 4 Funding a call today to see if we can work together on your next project!

Choosing a Contractor 101

Taking out a hard money loan to Arizona fix and flip a property will make you the most money if it’s done on time and correctly the first time. Here are some tips for choosing a good contractor for your investment.

We’ve given you tips on how to choose a hard money lender, but once you have your loan it’s time to choose a contractor to complete your Arizona fix and flip. This is just as important as choosing a good hard money lender because your Arizona fix and flip needs to be done on schedule, on budget, and without corrections needing to be made.

Here are some tips you can follow to ensure you’re hiring a great contractor for your investment property!

Ask the Hard Questions

You’ll want to interview contractors just like you would your Arizona hard money lender. Ask them about past projects and ask for references. You want to hear first hand that they’ve completed projects on time and without going over budget from people who have actually worked with them in the past.

Present a Scope of Work

You’ll want to have an organized and well laid out scope of work to show your potential contractor. If all you can present is a theoretical idea of what you’d like done to your home, it’s going to be hard to get a legitimate estimate.

Compare Bids

The cheapest isn’t always best. You’ll want to get detailed bids based on your scope of work and compare the itemized projects you want completed.

Once you have all of this information collected you can make a well informed decision of which contractor will not only be able to complete your project, stay within your budget, and know that they’ve been successful in the past, but you’ll have met them and know if you feel you’re going to work well together.

We hope that these tips will help you select a great contractor for your next investment property. If you’re ready to select your Arizona hard money lender, call Level 4 Funding today to schedule an appointment!

Commercial Private Loans: Reputation is Everything

Reputation is extremely important when it comes to a commercial private lender. Reviews can give you the insight you need to make an informed choice.

Choosing who to use for your commercial private loan is a difficult decision, but when it comes to reputation you want the best of the best with a proven track record of successfully funded loans.

You will be faced with many options and not all lenders are the same. Just like you’d read reviews before choosing a restaurant to see other people’s experiences, you want to know if other investors have had their commercial private loans funded quickly and professionally.

Here are some key terms you want to see in reviews about your potential lender:

· Quick

· Responsive

· Helpful

· Honest

· Professional

· Communicative

· Impressed

· Recommend

Another way to learn more about lenders of commercial private loans is to attend networking events where you can speak to other investors to hear their personal experiences with local or national lenders.

Not only will you get great lender information, but you’ll also get some pointers if you’re just starting your investment portfolio.

Commercial private loans can be difficult to fund, but the right lender will make it happen, ensuring your investment can get started off on the right foot. Level 4 Funding is able to complete your loan and have you beginning your rehab in as little as a week.

Call today to discuss your project and how we can help you obtain a commercial private loan.

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