Learn To Be A Fix & Flip Investor

Saturday, March 30, 2019

THE BASICS OF HARD MONEY LENDING

An investor can use hard money for businesses, construction and fixing and flipping homes. There are potential investors that are uncomfortable with using hard money because of the higher interest rates. However, understanding the benefits of hard money can easily rid a borrower of that concern.

Firstly, what is hard money? Hard money is money that an investor is lending in order for a borrower to proceed with their project—whether that be building a spec home or fix and flipping a residential property. A hard money lender is simply an investor who is looking to lend their money in order to make a profitable return. Arizona Hard Money Lenders rates typically range from about 2 points to 7 points and interest rates anywhere from 7% to 18%—this is a large range because each hard money lender has their own terms. Rarely, will a lender work on the high end of the interest rate—borrowers will more likely see 7%-12%.

The benefit of a hard money lender is the relationship an investor can build with their lender. It is common for a borrower to start out with more points and a higher interest rate and then watch the rates fall lower as the relationship becomes stronger. Once the lender sees the money return quicker they want to keep the business going with the investor because they have learned to trust that this investor will make money for them and make it quickly. This is a win-win situation for both the hard money lender and the real estate investor.

WHERE CAN I FIND ARIZONA HARD MONEY LENDERS?

It is not difficult to find a hard money lender. However, the ones a borrower will be best off with are smaller and more relaxed. These types of lenders will be easier to get a hold of, to answer your questions and all in all just easier to work with. There are both larger firms and smaller firms (or an individual). The larger firms will require more from a potential investor—they will do credit checks, require a minimum amount down. They will be harder to work with because they have a larger scale model they are working with and a large amount of borrowers they are filtering through their system. The smaller lenders don’t have to transmit borrowers through such a large model—they are more relationship based. Building a relationship is the goal for both investor and lender.

Yes, initially looking at points and interest rates it seems working with a hard money lender will be overly expensive.

Unlike a bank, working with a hard money lender will not only allow you to build a relationship— that trust you build will begin to pay off with lower interest rates and points. Once a relationship is built many investors simply can text their lender for an authorization on a project and the stronger the relationship, the more likely the answer will be yes— versus waiting up to 90 days for a bank to authorize an application. The benefits of working with a hard money lender far outweigh the slightly higher rates a borrower will pay in the start of this business relationship.

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.

How to Prepare Your Investment Pitch for a Colorado Hard Money Lender

The best thing you can do when applying for a Colorado Hard Money Loan is to be prepared! Here’s the kinds of information a Colorado hard money lender wants to know before approving your loan.

When you approach a Colorado hard money lender about applying for a loan you want to come in prepared and ready to field questions about your investment opportunity. Below you will find a list of the things you’ll need to have ready for your Colorado hard money lender in order to be approved.

Property Information

Compile all the information you have on your property in an easy to read format including list price, location, and offer price. If you’re pitching the purchase of a commercial property you will want to have the numbers that show the potential income for the property, as well.

Improvement Plans

A Colorado hard money lender will want to know exactly what your plans are for the proposed property. This should include construction budgets, bid sheets, architectural plans, and any other information that will show you have a well-detailed plan for the improvements to the property.

Personal Financial Information

Because Colorado hard money lenders don’t focus as closely on the credit requirement they’re going to want to know about your personal financial situation. Be prepared to present income verification and bank statements in case the lender wants to review that information before making a decision.

Get Ready to Field Questions

Just as you are interviewing the Colorado hard money lender, they are interviewing you. You will need to be ready to answer questions professionally and quickly to show that you are equipped to use a Colorado Hard Money Loan.

If you spend the time to prepare for your presentation to the Colorado hard money lender it will show! If you have all of your documentation in order it will be easy to submit your loan request following your initial discussion. Level 4 Funding can make moves on loan requests and have them funded as quickly as a week. To learn more, give us a call.

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.

WHAT EXACTLY IS A HARD MONEY LENDER?

You’ve probably heard the term “hard money lender.” But, what do they do? When do you need one?

Situations will arise when you just need cash quickly. There are situations when borrowers don’t qualify with traditional lenders such as a bank. Let’s say you want to purchase a house in a relatively short amount of time— in this case speed of execution is key in securing the property. Banks, and all traditional lending institutions, want some type of security to assure you will pay the loan bank. They will check your credit history, your payment history, your income and income tax returns. This gives them a personal guarantee they will be repaid in full.

Arizona Hard Money Lenders, on the other hand, are what is referred to as an asset based lender. What this means is that they care more about the actual property that the borrower is using as an asset than they do your credit history, payment history, income and tax returns.

FORMS OF HARD MONEY

There are many forms when it comes to hard money. Factors are when someone loans the borrower money against the receivables of your business. This is one way a business owner can use assets for their business’s operational costs.

Another form is the traditional hard money lender. The traditional form is when the lender is concerned with the property— whether it be a single-family home or a strip mall. It is whatever property the borrower is planning on improving.

All in all, Arizona Hard Money Lenders are concerned with the quality of the asset the borrower is using to secure the loan. A hard money lender uses property as collateral. What this means is in the case of default the property is legally taken over by the lender—who in turn, can sell the property to regain the money lost via the loan.

It is wise to choose a lender that is located in your geographic region, as Arizona Hard Money Lenders like to be able to kick the dirt on which they lend. You can find a lender in local newspapers or a simple google search. Google “asset based lenders” or “Arizona Hard Money Lenders.” You can also search “private money lenders” to find one. Also, make sure you allow google to search your location to find the lenders in your area.

There are many times a borrower will find themself in a pinch and in need of fast cash.

Arizona Hard Money Lenders typical pre-approve within minutes and secure the approval within 24-48 hours. Funds are readily available in less than two weeks. Terms and conditions vary between lenders, as they are not required to conform to traditional lending institutions strict regulations. Therefore, rates and terms can be worked out between lenders and borrowers.

Finding the Perfect Colorado Hard Money Lender

When you’re making a big real estate investment purchase you want to be selective about your Colorado hard money lender. Here’s how to find just the right one for you.

Most people wouldn’t purchase the first car they ever saw and test drove. Most people wouldn’t purchase the first house they saw without comparing it to others. So why would you go with the first Colorado hard money lender you find?

Research is the key to picking the right Colorado hard money lender for your investment project. Some Colorado hard money lenders will be picky on the location and property type. You can shop your project around to a few different Colorado hard money lenders before making your decision. Here’s a few ways to find Colorado hard money lenders.

Use the Internet

This probably goes without saying, but the Internet is your friend! Of course it’s easy to search “Colorado hard money lender near me” and pick one off the list, but the best part about the Internet is that it’s going to give you lots of information. You can find reviews from past borrowers and find out about their experience to see if it’s the right fit for you.

Attend Networking Events

If you have any experience in real estate you know that networking is key. This goes for lenders, as well! If you attend a conference or a meeting for investors you’re bound to meet some Colorado hard money lenders. You can also ask other investors in attendance if they have a recommendation based on their own experiences.

Interview Potential Colorado Hard Money Lenders

Once you’ve found a few Colorado hard money lenders it’s time to conduct some interviews. Some lenders may be more suited to experienced investors and some may specialize in commercial properties. By spending time getting to know their clientele and what they can offer you can feel comfortable pitching your opportunity for funding.

You can also speak with another more experienced investor and ask them what kind of questions they ask a lender before accepting a loan offer.

If you’d like to learn more about what we have to offer investors, give Level 4 Funding 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.

SPEC HOME FINANCING WITH ARIZONA HARD MONEY LENDERS

The 2010 Dodd-Frank Act and other regulations have pretty much assured consumers that traditional lenders are not willing to provide speculative Arizona Construction Loans.

However, unlike traditional lenders, Arizona Hard money lenders are eager to finance these deals. Even though banks were encumbered with regulations due to lending practices, Arizona Hard money lenders do not have these same rules. Spec home financing is a high demand market that is left with not a lot of funding choices. Luckily, there are Arizona Hard money lenders that will gladly assist.

Spec loans provide financing for projects projected to have a high return. These loans can be used for many types of investors. These loans can finance single-family homes, residential units, manufactured homes and commercial properties.

WHAT TO CONSIDER WHEN WORKING WITH ARIZONA HARD MONEY LENDERS

First off, make sure you get to know your lenders and what practices make them comfortable. Remember, these lenders can finance projects that would be impossible to close with a traditional lender. Builders who work well with Arizona Hard Money Lenders open up a revenue stream unlike any other.

Make sure you understand the lender’s rates and fees for the spec home financing. These are short-term, higher interest rate loans. Often, these loan terms are between six and twelve months. However, these loans have been known to have terms up to 5 years. Do your homework and be fluent in your knowledge of hard money lending. The down payment requirements can be anywhere from no money down to 50 percent down—each lender is unique, just as each builder. But, keep in mind that if no money down is required, you will have to have some sweat in the game.

Find out if your lender is content with the geographic location of your project. Arizona Hard Money Lenders generally only want to work on projects that are in their location. Because of this, it is good to find a local lender. Inquire if your lender is comfortable including the lot cost in the loan, as well. Many lenders will fund both the construction costs and lot costs.

There are required items you will need when meeting with your lender: a business plan, copies of most recent tax returns, copies of bank statements and a marketing plan for your spec home. The marketing plan is important because you must prove to the lender you have a plan to sell this house that hasn’t even been built yet.

For builders, Arizona Hard Money Lenders can be not only a great link to revenue, but a life-saver.

To find a hard money lender that you can grow with is priceless. Working with a hard money lender is like building a relationship. They truly are a builder’s business partner. As you work on more projects with your lender you will most likely see your loan terms become even more favorable. Once the lender has built trust with an investor the process becomes even easier.

Friday, March 29, 2019

WHAT ARE ARIZONA HARD MONEY LENDERS?

“If you really want to do something, you will find a way. If you don’t, you’ll find an excuse.” — Jim Rohn

Arizona Hard money lenders are your “find a way.” If you have real estate investment dreams and traditional lending won’t work—don’t find an excuse, find a hard money lender.

Most people making a decision to test the waters of the real estate investing world don’t have extra money to simply buy property. Traditional bank loans typically don’t work for investors. Bank loan terms are long—usually ranging from 15 to 30 years. Real estate investors won’t have a property for anywhere near 15 years and so what purpose would a bank loan serve them?

Rookie investors often believe the bank is their best friend. Yes, it is true—bank loans have lower interests than pretty much any other lending option. However, not only will you be stuck with a 15 year mortgage—you will wait a minimum of 30 days for your loan to close. It is not uncommon that borrowers wait up to 90 days for their money. Now, that is just fine if you are buying your primary residence—that is the expectation the seller will have of you. Unfortunately, the sellers of properties that real estate investors are looking to buy won’t wait anywhere close to 30 days to get paid. To compete with all cash buyers you absolutely can’t wait around for a bank to approve you.

ARIZONA HARD MONEY LENDERS ARE THE X FACTOR

Because a bank is not typically the answer to a real estate investor’s financial needs, who is? Arizona Hard money lenders—also referred to as private money lenders—approve loans strictly for real estate. These loans are backed completely by property. All lending institutions need to have proof they will be paid back. Traditional lenders look at income and credit scores—this shows a borrower’s history of responsibility and ability to repay the loan.

Arizona Hard money lenders have a different approach. Although, they check a borrower’s credit and look into their financial situation—they do not base an approval on that alone. In fact, credit and income are a small category of importance when it comes to hard money lending. Their primary concern are hard assets—which means the property in question. In case of default on the loan the lender can simply repossess the property and sell it to generate the money lost. This is not what Arizona Hard money lenders want to do. In fact, they are generally very easy to work with. Unlike a bank where you are working with an entire team of people, most of whom you will never speak with, a hard money lender is one person. Investors and lenders have personal relationships. As long as you communicate with your lender they have the ability to be flexible. They just need to trust you.

Arizona Hard money lenders provide quick solutions to investors.

Not only will borrowers form a personal relationship with their lenders—as time passes and more deals are done they may easily see rates being reduced. Arizona Hard money lenders want these relationships with borrowers. Just as an investor wants to trust who they are borrowing from—the lenders wants to trust the person whom they are lending the money.