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Showing posts with label what is hard money. Show all posts
Showing posts with label what is hard money. Show all posts

Monday, December 4, 2017

If You Find Yourself Asking “What is Hard Money,” You Might Be a Budding Real Estate Investor

p3_img2Real Estate Investors that fix and flip homes as a job or a hobby all start by asking, “What is hard money?” If you are asking yourself that same thing, read on to find out how the answer can help you in the fix and flip game.

A huge niche in the real estate market is the “fix and flip,” where investors buy homes (sometimes bank owned or foreclosure properties), fix them up and resell them at much higher values than they were worth in their previous state. This can earn these investors some serious cash. But to make money, you’ve got to spend money… and if you don’t have it yet that’s when that all-important question, what is hard money comes in handy.

With these types of loans, you can get cash fast to make an offer on those quick-selling foreclosure or even auction properties and then make repairs and upgrades to make them desirable to homebuyers. These loans typically have quick approval turnarounds, little or very straightforward application documentation and quick access to cash! They really are a win-win solution. These are a great alternative to traditional financing that does not give the borrower access to cold hard cash. Cash is especially important for auction properties, so these loans put cash in hand for investors.

When you ask what is hard money, it’s also important to ask other questions such as what is the timeline for approval, when will I have cash in hand and what are the terms? These questions are all important to the loan, and your lender should be able to answer all of these questions for you. Typically, approval times are fast, sometimes cash is even in hand the same day, and lenders don't pay much attention to the typical factors that traditional lenders would look at such as credit score. Hard money lenders just want to make sure you have the ability to pay back the loan, and if you don’t, that you have the collateral to ensure they retain the money the put out.

Once you have the answer to “what is hard money” you are ready to meet with a lender to get your hard money loan.

As with any important decision, initial research is a key element of the process. You want to ensure that you find a reputable lender who you feel confident is going to work to negotiate the best terms for your loan.

What are you waiting for? Turn your loan into a money-making investment career or hobby!

Once you’ve gotten the hang of these types of loans, and the fun and exciting process of fixing and flipping homes, you may repeat this process again and again, possibly turning what started as a hobby into a career. Once you get a good reputation for having the ability to repay the loan, you will have a much easier time obtaining future ones.

Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Monday, November 20, 2017

What Is Hard Money?

4page_img2-bigIn the complex world of real estate investment, there are often terms that beginning investors are not familiar with. Hard Money is an integral part of many commercial real estate projects and understanding how it fits into the overall financing of real estate is critical.

Hard Money is a source of funding that falls outside of the traditional methods of receiving loans for commercial real estate investors. In many cases, the time that is required and many strict guidelines for acceptance prevent borrowers from being able to have access to traditional funds. Banks and other lending agencies can take weeks or months to come through with a loan and some borrowers need access to fund much more quickly. These loans can often be accessed in a matter of days, as opposed to the much longer waiting period for a traditional loan.

This is where hard money steps in. These loans are often from individuals or smaller groups, which gives them a great deal of flexibility in both terms and security. These loans do not depend on the credit worthiness of the borrower, instead these loans are asset-based and are often secured by the value of the property that is being purchased with the loan. In some cases, the hard money loan will be secured with assets that the borrower already has on hand, such as other properties.

Typically, hard money loans are for very short terms and are at a higher interest rate than a traditional longer-term loan. It is also common for a borrower to be granted terms that allow them to only pay the interest during the term of the loan and then pay the balance of the loan off in one balloon payment at the end of the term. This method allows the borrower to utilize the entire amount of the loan for improvements, instead of having to worry about monthly payments that include both principle and interest.

Another benefit of this type of loan is that borrowers usually have access to the entire amount required, whereas in a traditional loan, the borrower will have to put down a certain amount to secure the remainder of the loan. For borrowers who have little cash on hand, this can often be a lifesaver and might mean the difference between a successful development or an absolute bust.

What type of investor would benefit the most from hard money?

Hard money loans are not for everyone. Sure, they provide easy access to funding and cuts through a lot of the bureaucracy of traditional lenders, but not everyone is cut out for it. Those who are planning on improving and quickly selling a property will find a great deal of value in a hard money loan, as they will essentially be making a profit off of other people’s money. If a developer can improve a property very quickly, this is an excellent use of the loan, but it is dangerous, as the property might not have sold by the time the hard money loan comes due.

Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
clip_image002clip_image004clip_image006clip_image008
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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Friday, November 17, 2017

Asking What is Hard Money Can Be Beneficial to You and Your Small Business

yu247-8bdf23d1-f2b4-4f4f-97ea-688740c07d9e-v2It is a common question among many in the real estate market, what is hard money? Before diving into your next big real estate and financial decision, you should know all of the expectations along with the benefits when dealing with hard money.

There are some people, especially those in the real estate market that could answer the question, what is hard money, easily. But most probably do not have a clue or good understanding of what it is. In most cases, private individuals or small groups are the main lenders of hard money. One of the big differences with this is that the lenders really focus on the value of the property and not credit score or financial history.

One of the biggest things to keep in mind is that because hard money loans are not based on credit score or financial history, but are instead based on the actual value of the property that is being purchased, they are going to come with a much higher percentage rate compared to other mortgages. On top of higher interest rates, it isn't uncommon to have also higher additional fees and to have a mortgage that could be twice as high as traditional mortgage prices.

The common question, what is hard money, isn't the only question that lenders often hear. Many people also ask the question, who needs it? Since you can usually get approved to borrow up to 100% of the price of the property being purchased, then people who flip houses along with developers can really benefit from this. But, be prepared because you will usually have to prove real and valuable assets of the property as credit score doesn’t play a role in approval.

When asking, what is hard money, many developers are pleased with the answer and see many benefits from it

It is often the case that sometimes you can't easily get approved for a standard loan. So, if you plan on buying a property that you know you will be able to turn into a big profit and quickly, then hard money might be the most beneficial option for you and your small business. It can also be used to fund projects to help raise the property value for the future and this is a smart way to go as well.

If you are struggling to find financial help, asking what is hard money might be able to help you finance your desired project

Of course, it can also come down to who you know and that can be very helpful during this process. If you know of a local lender that you can trust to ask the question what is hard money, then go for it. Speaking with someone you trust and know will give you a direct answer that you will understand will come in handy in the long run. Plus, having a trusting relationship along with great communication with anyone helping with your finances is always important!

Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
clip_image002clip_image004clip_image006clip_image008
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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Thursday, November 9, 2017

What is Hard Money and its Pros and Cons

yu247-8bdf23d1-f2b4-4f4f-97ea-688740c07d9e-v2Answering the question what is hard money can open up many opportunities for an investor. But it is important to understand the pros and cons of this method of funding.

There are several methods of funding a real estate purchase or investment, and each has its own benefits and drawbacks. But understanding all of the options allows you to select the method that will best meet your needs. As you begin to explore you are certain to ask what is hard money. The answer is fairly simple. Hard money is a method of financing a purchase which does not depend on the borrower’s credit to secure the loan. Instead, the lender is focused on the value of the property itself to determine if the loan is a good risk. Normally these are short loans and are used often for investment purchases such as house flips or for real estate developments.

One of the largest drawbacks of a hard money loan is the cost of the loan. Hard money loans are normally considered unconventional loans and are not offered by banks or other conventional lenders. Most of the lenders are private individuals or small investment groups. For this reason, they are not governed by the same rules as banks and other financial institutions. The lender is free to determine the terms as they choose and can charge a much higher than traditional loan interest rates. In many cases a hard money loan will have an interest rate 10 percent or more above current conventional loan rates.

Another issue that some borrowers have with a hard money loan is the time that is offered for repayment. These loans are designed to be short term to allow for purchase, renovation and then a quick resale. And that also means that the borrower will only have a very short time before the repayment is due. This can place added stress on completing a high dollar project very quickly.

The Pros of Hard Money

As a borrower, if you are still asking what is hard money, and why should I consider it then read just a bit further. The biggest benefit of hard money is the lack of restrictions which are found in conventional lending. The terms can be negotiated with the lender which is something that will never happen with a major lending institution. Also, there is a great convenience in the speed at which a hard money loan can be requested and fulfilled. Conventional loans can take months to process and mountains of paperwork. But a hard money loan is riding mostly on the value of the property and not the borrower’s creditworthiness. These two factors make hard money appealing to a huge number of investors.

What is Hard Money Used For?

Hard money is a great means of financing a project based on the value of the property and not the borrower’s personal credit history. This makes the process great for new real estate investors who want to learn to flip houses begin to build a real estate portfolio. These loans are also popular with real estate developers who are interested in developing and reselling a property. The key to maximizing this tools benefit is being able to carry the loan for just a short time and then selling the property at a profit to repay the loan possibly even fund the next project.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
clip_image002clip_image004clip_image006clip_image008
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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage