Tips for Success When Considering Hard Money Loans Arizona

Every industry has its good and bad participants and hard money lending is no exception. But following a few tips can help to ensure success when seeking hard money loans Arizona.

As with any loan, careful evaluations should be completed for each lender and the terms for all hard money loans Arizona. If you are not familiar with the process or the loan documentation it is always a good idea to have your lawyer review any documents before you sign them because a hard money loan document is legally binding. In addition, there are a few other tips that can help you to ensure that your entire loan application and funding process goes smoothly.

There can be a few legitimate upfront fees that a borrower is asked to pay when requesting hard money loans Arizona. But be cautious of any extremely large fees that you are presented with prior to being approved for the loan. In most cases, these fees are being charged by a third party or a “broker” who is not actually the lender but is trying to get a fee and masquerade as a lender. Not only is there a good chance that you will not get funding from this person but there is also a good chance that they will sell your identity or personal information to others for an additional profit at your expense.

When you are presenting information to a potential lender, assume that they will find out any “little secret” that you might know about the property. Do not try to hide information about the title, tax liens or any issues that could become a problem in the future. A lender is going to fully investigate the property and will not look kindly on any borrower who has attempted to be dishonest or take advantage of them.

Know the Current Rates

Not all lenders are dishonest just like not all used car dealers are dishonest. But that are a few in every crowd. So be sure that you have polled several lenders and are well aware of the current rates and terms for hard money loans Arizona. This will let you know immediately if a lender is trying to take advantage of you and you can cease the relationship immediately.

As for A Detailed Fee Breakdown

In the end, all you are really shopping for is the loan with the best overall cost to you. So it only makes sense to clearly ask for a list of all of the fees and costs that you will be paying for the use of the lenders money. Having this clear list of the total cost will allow you to easily compare all of your offers without having to sort through various terms and jargon that can be a part of a loan document.

Using these few tips will help you to more easily determine which hard money loan is the least expensive and will allow you to get the best return on your investment.

The Best Time to Use Hard Money Lenders Arizona

Not every real estate transaction is tailored to a traditional loan. In some cases hard money lenders Arizona is the only choice to meet the terms of a great deal.

There are many moving parts in most real estate investment deals. You might be facing a very small window of opportunity to make the purchase or you might not have the cash on hand to complete the deal. You might even want to hold onto your cash to complete the renovations needed to quickly sell and turn a profit on a property. But whatever challenge cannot be met by a traditional lender, hard money lenders Arizona is probably going to be able to accommodate.

Banks and mortgage companies have a specific process that they must follow for each loan application. And there is a certain amount of time that this process is going to require. So if you have just a few days to raise the funds for a great investment property, a traditional lender is not going to be of much help to you. But hard money lenders Arizona offer a legitimate means of raising the capital that you need quickly.

Sometimes, timing can be an issue not because you need the money very quickly but because you have just completed the purchase of another property. In many cases, you do not have the available credit to make an additional purchase. But a hard money lenders Arizona will only be considering the current market value of the property being used as collateral and not your current debt load. This will allow you to make the additional purchase and not miss out on a great opportunity just due to poor timing.

A Unique Opportunity

Not every real estate investment is a simple case of buying low and selling for a profit. In some cases, the buyer needs to be a visionary who can see the very obscure potential in a property. If this is the case, a bank is not likely to be willing to write a loan for the property. The risk involved will be higher than a traditional lender is willing to assume. But a creative real estate investor will know that a hard money lender will fund the loan. Yes, the risk is high but the opportunity for reward on these types of deals is also high.

Non-Traditional Circumstances

Hard money loans do cost a borrower more in interest and in points. But when a great opportunity presents itself, it can be worth spending a little bit more to make a great deal more in the long run. When you need to process a loan quickly, or have already maxed out your line of credit with a bank, a hard money lender could be your only choice to land a great deal. Hard money lenders are also a good choice when the property is going to require some vision to increase the value and banks are not willing to take the necessary risk.

Advantages of Hard Money Loans Arizona

It is true that hard money loans cost more in interest and fees than most traditional loans. But there are several advantages of using hard money loans Arizona.

Most borrowers are focused on trying to find the most affordable lender when they are seeking a loan. And thinking along those lines is likely to keep many borrowers from taking advantage of all of the benefits of hard money loans Arizona. But investing just a few minutes in exploring the advantages of hard money loans could easily change some borrower’s opinion of hard money loans Arizona.

As a business person, your time is very valuable. And hours spent completing traditional loan applications are costing you money. The time could be better spent managing and growing your business. The much simpler application process of hard money loans Arizona is a great way to save yourself time and the stress that is associated with completing forms and compiling bank statements and other documentation.

Another advantage of hard money loans is the fact that you will not need to submit your personal banking and financial statements to the hard money lender as you would if working with a bank. Traditional lenders are interested in business creditworthiness and financial health as well as the personal financial situation of each owner of the business. However, a hard money lender is only focusing on the current market value of the property which will be the collateral for the loan.

Self-Employment is Not an Issue

Many banks and traditional lenders have very specific criteria for funding a loan when the borrower is self-employed. This can make it even harder than normal for a borrower to qualify for a loan. But a hard money lender does not see self-employment as a negative. And in some cases they prefer it as it shows initiative and the desire to commit to hard work to become successful.

Used Correctly Hard Money Is a Great Tool

Hard money loans are not the perfect solution for every borrower. If you are looking for a long term loan, or if you need to borrow the entire purchase price of a property, then hard money lenders will be of no help to you. But if you are looking for a short term loan that can be funded quickly, then hard money is for you. The application process is much less lengthy and the criteria for approval is related more to the actual current market value of the property than it is your credit score. So borrowers with poor credit or no credit will have a fair opportunity to secure a hard money loan.

Not only is applying to many banks time consuming but it is also humiliating to be turned down time after time. But you can avoid the embarrassment and the wasted time by presenting your request to a reputable hard money lender. With a solid plan to purchase and resell for a profit, you have a higher than average chance of getting the funding that you need from a hard money lender.

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

About the Author:  Dennis has been working in the real estate industry in some capacity for the last 45 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

How to Find Reliable Hard Money Lenders Arizona

Finding reliable hard money lenders Arizona is not as easy as driving to a bank or mortgage company. You will need to invest some time to find the best hard money lender to meet your needs.

Most first time hard money borrowers are not very familiar with the process or their options when it comes to selecting a lender. So it can be very tempting to just accept the first lender who is willing to make you an offer. But there are a few key questions that you should answer when you are assessing potential hard money lenders Arizona.

The hard money lenders website is going to tell you a great deal about how they do business and the actual type of service that they offer. Some sites are very basic and are only used to gather your information. They provide no details about the lender or the types of terms that they offer. Often times you learn after the fact that these sites do not belong to actual hard money lenders Arizona, but instead they are operated by an intermediary or broker who is collecting information on potential borrowers and then turning it over to an actual hard money lender. This is not a person that you want to deal with as they are going to add fees and provide you with no real service. You only want to work directly with the lender.

Professionalism is another important factor when selecting hard money lenders Arizona. You want to work with a lender who can meet your financial needs but also your customer service needs. Reliable contact information, a staff that promptly returns calls and emails and clear and professional documentation are all indication of a professional lender and not a fly by night entity.

Finding a Good Match

Not every hard money lender is going to be a good match for every potential borrower. Some lenders focus only on commercial properties while others prefer to focus on residential properties. Selecting a lender who regularly funds projects similar to yours will undoubtedly make the process smoother and faster which is often a driving motivation for using a hard money lender.

Do Your Homework

Any lender, whether a hard money lender or a traditional lender, is simply a service provider. You would never select a builder for your next home, a contractor or even a car mechanic without checking out the business and its reputation. So you need to commit to the same process with a hard money lender. Be certain that they are in good standing with other borrowers and that they are not embroiled in any legal issues. Check out their reputation with previous clients. Did they offer a professional process and service throughout the life of the loan? Were they reasonable to work with one terms and payments? All of this information will give you insight into what your hard money borrowing experience is likely to be when working with that lender.

3 Requirements to Succeed Using Hard Money Loans Arizona

Understanding these three basic requirements of hard money loans Arizona will help to ensure that you can secure your loan. In addition, these tips will greatly improve your potential of success.

Real estate investors who are not familiar with hard money loans Arizona often have many questions about the process and how to best use a hard money loan to its fullest potential. The first question is always about the collateral required to secure a hard money loan. Borrowers want to know how much they can borrow and how that number is determined. All of this financial information is a huge part of the first requirement of hard money loans Arizona. Having a sufficient down payment is critical to securing a hard money loan. Lenders are only going to offer between 65% and 75% of the purchase price of the property. The borrower is required to provide the remaining 25% to 35% in the form of a down payment. This assures the lender that the property will almost always remain more valuable than the outstanding balance of the loan.

In addition to the cash to purchase the property, the lender is going to want verification that the borrower has the cash reserves necessary to pay the costs associated with owning the property such as the monthly payments, the taxes and insurance. If the property is in need of repairs or renovations, the lender might also want to see that the borrower has the means to make the needed repairs to protect the property value.

Be Prepared with a Detailed Plan

Real estate experience is also an important consideration prior to funding hard money loans Arizona. The lender is going to need to understand the borrower’s previous experience in real estate investing to know that they are a good investment. This experience can be demonstrated through past successful investments as well as a clear and detailed plan for the current project. Items such as a detailed timeline, tasks to be completed, comparable property pricing in the area and a plan for marketing and selling the completed property will all show the lender that this project has a great potential for success due to the experience and professional management of the borrower.

Professionalism=Success

As with any business deal, professionalism is going to be critical to the final success of the project. Not having a clearly defined plan and the money to act on the plan is a sure sign that the project is doomed even before it gets started. But having a plan and a detailed process outlined to achieve the goals will show potential lenders that you are experienced and well prepared to start and successfully finish this project. Not only will this preparation go a long way in helping you secure the hard money loan but it will also help to make the project run more smoothly and remain on budget and on time. The effort you invest before the project begins is equally as critical to its success as any time and effort you invest during the project.

Reasons to Use Hard Money Loans Arizona

Knowing when to use hard money loans Arizona is important to the success of many real estate deals that you might encounter. Selecting a hard money loan for the wrong deal can be a very expensive mistake.

There is never a one size fits all solution for your financial funding needs. It is important to understand that even though hard money loans Arizona have a great many benefits, they are only suited for certain types of deals and in certain situations. Knowing the situations that warrant a hard money loan will ensure that you are using this financial tool correctly and getting the greatest benefit from hard money loans Arizona.

Time can be a very critical factor in some real estate transactions. But funding a traditional loan can easily take 30 to 45 days if you are fortunate. But funding for a hard money loan can often times progress in just a few days. So when a great deal is very time sensitive, it makes sense to pay a slightly higher interest rate for a few months to close the deal. The borrower then has the time to follow the traditional path and apply for a loan at a lower interest rate from a traditional lender.

Having no credit makes it very difficult to secure a loan. But if you have found a great property to purchase then using hard money is a good way to secure the loan that you need to purchase the property. And just as with the time sensitive loan mentioned above, the borrower can then invest more time in finding a traditional loan at a lower interest rate.

Many consumers have experienced a great deal of financial issues in the last few years and as a result they have bad credit. Bad credit will all but eliminate the possibility of getting a traditional loan. For those folks with bad credit, hard money loans Arizona is one of the few ways that they can secure a loan. And even though the interest rate is higher than a bank loan, it is the loan that they need to make the purchase.

Hard Money Loans Are a Good Option

There are some circumstances that are beyond a borrowers control such as other potential buyers or a seller who is working on a very tight time schedule. In other cases, the borrower might have bad credit due to past mistakes or poor decisions. But regardless of the reason, when a bank is not an option, some deals can work out to be very successful when funded with hard money.

Make the Smart Choice

Having credit issues or working on a very tight schedule is no reason to pass up a great deal. Using hard money loans correctly can allow you to close a deal and eliminate the issue of time or poor credit. Then with the deal completed, you can focus on finding a more affordable means of refinancing the short term hard money loan.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

How to Understand Repayment Terms for Business Loans Arizona

When trying to obtain business loans Arizona and decipher the sometimes complicated jargon in the agreement, it’s critical to know what is of expected of you in terms of paying back the loan. Level 4 Funding breaks it down.

You need to start with a clear reality about what it’s going to take to get a loan approved — and then be able to meet the repayment term schedule. Terms for business loans Arizona are totally different than home mortgage payments, for example, that you might have for 30 years. These loans at loan-term can range from five to 20 years, give or take, and at short-term, between three and six months to three years. However, the latter will also include higher interest rates.

The short-term business loans Arizona are designed for business owners that need cash and they need it now. This could be for a number of reasons (need to make payroll, want to purchase a building, need to do some important renovations or upgrades to pass inspections) — all of which are time sensitive. These loans can be approved and turned around with cash in hand for the borrower within as little as 48 hours, give or take. However, ultimately, these loans can be more difficult to pay off because of the shorter repayment time allotment plus the additional high interest rates.

With long-term business loans Arizona, the time frame for repayment stretches over a much longer course of time, and they are amortized loans, which means that the loan needs to be paid in fixed installments through the duration of the payment terms. This is similar to how homeowners pay their mortgage — with principle and interest all together. But sometimes there is a balloon payment required at the end of the terms, meaning the borrower much pay the remainder of the loan back in one large sum, which can be difficult as well.

Be sure you are aware of any penalties.

While you would think that paying your loan back early would be rewarded, it can actually work against you. Some loan agreements charge a penalty for early payment (likely because they would like to keep receiving that high interest through the term of the agreement).

Give a professional a call to help you understand the intricacies of repayment terms.

When seeking a loan and understanding all the ins and outs of this complicated application and agreement contract, it’s important to work with someone you can trust. Level 4 Funding’s lenders are professional, experienced and they care about finding you the right loan with the repayment terms that work for you and your business. Give us a call today and let us help you discover how easy and simple the loan process can be.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

Try These Tactics if You Want to Get Your Hard Money Business Loans to Close Quickly

There is nothing like the painstaking process of waiting to see if your loan application has been approved by a conventional lender. Instead of playing the waiting game, Level 4 Funding offers ways to get your hard money business loans to close and fast!

Traditional loan applications are known for being super-complicated to complete, and then the process for the bank or lender to approve can be an even longer, more complicated process! When you’re in need of a loan, time of often of the essence, which is why hard money business loans are the way to go if you need cash in hand and you need it… like yesterday! There are some things you can do to ensure the process goes even quick and more smoothly, even with a short-term loan application which are known to be less cumbersome than conventional loan applications.

For example, being prepared can help get the process off on the right foot. Be prepared to put up some collateral. That is typically one of the most important things you can do to ensure your hard money business loans get approved, and fast! If you are prepared to show that you have the value of the loan (or more) in personal assets (such as a home or car) or you can use the property or business that you are intending to use the loan for as the collateral, that is usually a sure-fire way to ensure a quick process, too. While you likely won’t need to have you credit report, score or a lot of financial statements, it’s a good idea to have those items in order, just in case that documentation becomes needed for the application process.

Working together with your lender to get your hard money business loans approved is another way to ensure a quick turnaround. Remember that although the process can seem daunting, unfamiliar or even a little intimidating, your lender is on your side and there to help you get the loan you need. So work together to get all you ducks in a row or provide the proper documentation he asks for to move the process along. If you are helpful and make the process easy for him, he’ll want to make the process as easy and successful for you, too.

Find a reputable lender

It’s also a good idea to take some time to research some lenders to ensure that you are starting the process of right – with the right lender. You would hate to get down the line with an untrustworthy lender only to have to scratch the process before the loan is approved and start fresh with another lender. Work smarter, not harder! Find the right lender, and the right loan will follow.

Finally, call Level 4 Funding!

Level 4 Funding offers the professional, experienced lenders that will help make the loan process quick and easy. We know that time is crucial when waiting for a loan approval and we do our best to ensure a smooth and simple process!

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

Why Hard Money Lenders Are So Helpful For Investors

There are many benefits to using hard money lenders when purchasing an investment property. Level 4 Funding shares reasons this type of loan can benefit you.

While many beginner investors typically want to go the route of seeking a loan from a traditional lender such as a bank or other financial institution, they may not realize hard money lenders can help them obtain short-term loans that are much simpler, faster and a great way to get a loan without having perfect (or close to perfect) credit.

For real estate investors, hard money lenders are looking at one main thing — collateral. So instead of having to complete a complication application, provide a lot of personal financial statements and documentation for conventional lenders, these lenders offer a quicker and less stressful way to obtain the funding they need.

These lenders are mostly interested in the property, which is many times used as collateral for the loan. This is a much more direct way to get the loan because it sometimes takes weeks (or longer) for traditional lenders to verify credit scores, reports and history and approve the loan application.

The property’s current market value is the main thing.

The lender is going to want to help the investor make the purchase if the loan amount is approximately 70 percent less than the value of the property in question to purchase. If that is the case, hard money lenders will typically look at this as a good investment and ready to create a contract and repayment schedule agreement.

This type of loan is a win-win situation for the borrower and the lender.

Everyone involved typically benefits from this type of short-term loans. For investors that are looking to “fix and flip” buildings or homes, for homebuyers that will need to make a lot of home improvements on their new abode or for first-time investors, these loans are the way to go. And for those that have poor credit or dings on their history, this does not really even factor in to whether or not their loan will be approved. They get cash in hand, fast, and with few complications. The borrower can even opt to secure a conventional loan with lower interest rates once they own the property outright. The lender benefits as well because the repayment schedule is short, and the interest is generally higher than a typical long-term conventional loan, so they begin to see the return of investment almost immediately. All in all, this is a great type of loan and really does offer a multitude of benefits for all parties involved. Level 4 Funding is available to help investors with a variety of loan needs. With a bit of help and advice from an experienced and professional lender, borrowers can make their investment dreams come true and start building an investment career that can be very financially lucrative – making any future loan needs in the future much easier to obtain.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

How to Understand Hard Money Loans

If you learn about the process of hard money loans, you can figure out how to get the best loan to suit your business needs. Level 4 Funding shows you how.

When it comes to learning about hard money loans, it helps to start at the very beginning, with what they actually are. These are unconventional loans that are not reliant on banks or traditional lending institutions for funding. Private sources fund these types of loans, whether it be an individual or a group that helps assist with the funding. Most often, these loans have a short repayment term cycle and are typically used by the borrower to purchase investment properties.

The qualification process for hard money loans it totally different than applying and approval for a traditional loan. In the latter, a borrower needs to complete and submit an application process to the bank or other conventional lender. The process is often very detailed and lots of documentation is required of the borrower. The borrower must also share credit score and history, and provide details about their financial status in order to be considered for the loan.

For unconventional loans, the process is based upon collateral, and the current market value of whatever collateral the borrower is able to provide. Collateral is the value the borrow puts up as a way to offer the lender security of the loan. This could be a car, the person’s home, another building or event the building/property that is being purchased, for example. The lender requires this as security that if for some reason the borrower can’t make payments, than the lender takes over the collateral and can sell it to recover their funds. In this type of loan, the funding individual or group is less interested in the borrower’s credit score or even their currently financial situation. It’s all about collateral.

This is important for borrowers that have less than ideal credit scores or have a ding in the credit history somewhere along the line that makes it difficult for them to obtain a conventional loan. The value of the collateral or the property in mind to purchase needs to have value equal (or likely higher) than the amount that is being requested to borrow. This gives people breaking into the world of investment property purchases a good place to start.

Now that you know…

This is a huge benefit of hard money loans that people don’t often realize at first. While conventional lenders can often be intimidating and the loan applications very challenging, the process of this type of loan is very straightforward. Investment properties, fix-and-flip homes and other property purchases are all great for this type of loan. It offers the cash upfront (and fast!) to make the purchase happen. Then it’s up to the borrower to take their investment purchase to the next level in order to profit to the maximum.

Working with this type of loan has great potential

For those without stellar credit or even those that are just starting to establish their business credit scores, these loans are the way to go. A private lender such as Level 4 Funding can help beginner investors with a short-term loan to build their investor career.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

How to Evaluate a Property for Hard Money Loans

Real estate property purchases will benefit by knowing some ways to evaluate a property to best obtain hard money loans. Level 4 Funding offers the following tips to best evaluate the property you wish to get a loan for.

When entering the commercial or residential real estate market with the intent to purchase properties, fix them and then sell them for a profit, there are some things you should consider… Especially if you are looking to obtain hard money loans to fund the purchase. The better you are able to evaluate the value and prospective value of the property, the easier time you’ll have persuading lenders to fund your loan.

While unconventional or private lenders that provide investors with hard money loans are primarily interested in the collateral for borrower has to offer. In the case of real estate investors, this is typically the property that is intended to be purchased with the loan.

So it’s important to know what these lenders are going to be looking at when it comes to the property at hand. If you can pre-evaluate these things with a “lender’s eye” you may have an easier time getting approval. Level 4 Funding provides the following criteria: protective equity, which offers investors protection again payment defaults, fluctuations in the market and devaluation of the property; mortgage to value ratio, the property’s percentage of appraised value or quick-sale value – the lower the mortgage amount to the value of the property, the better; resale probability (the quicker the better); the condition of the property – which can affect how much investment will be needed to put into it to make it resalable; and location. The latter is one of the most important aspects of real estate — “location, location, location.” Consider the location of the property above all things.

There are many factors to consider, and each lender may consider some factors more important than others.

While the above are just a few of the major ones, there is a multitude of things that need to be taken into consideration when looking at an investment property. Lenders may be able to advise you as to which they consider to be most important as it related to the current market conditions.

When looking at an investment property, evaluation is a major part of the process.

With certain properties that go on the market, particularly foreclosures, time is of the essence. However, it’s more important to make a complete and unbiased evaluation of the property before jumping in “blind.” By considering all angles and factors, you can make a more education decision as to whether or not this property will be a good investment, and if you will be able to obtain hard money loans based on its current condition. Level 4 Funding can help real estate investors evaluate their property purchases to order to come to a loan agreement for the right property. Call Level 4 Funding today to see how they can help you find the investment property that will become an investment in your success.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

How to find the right hard money lender for your next project

Just because you cant secure a traditional bank loan doesn't mean you don't have other options, you may have considered a hard money lender but where do you start? What should you expect from a potential lender, and what will a lender expect from you?

A quick google search for private lenders should turn up an endless array of financing options. Because you might need a specific type of lender to match your particular project an online search can prove to be a little overwhelming. You could always try to be more exact with your search terms, trying things like ‘private rehab loans,' or ‘private construction loans.' Being specific with your online searches may help you find the lender that is right for you, but this isn't always the case.

Consider using one numerous lender databases available online to narrow down your financing options. The ideal database would allow you to aim your search for lenders based on the amount of financing you need or will enable you to search for lenders based on your specific project, (i.e., Renovation, construction, commercial, etc).

If you'd rather avoid the hassle of searching for a lender on your own, you could seek out a referral from a licensed mortgage broker. Local real estate investment groups could also put you in touch with lenders they have worked with in the past.

If you find the right lender, the question then becomes what should expect from them and how do you know you're getting the best possible deal.

What should you expect from a potential hard money lender during the application process?

Search relevant government databases to ensure your lender is licensed. Your lender should also be transparent throughout the process. Ensure that they meet their published guidelines related to fees and closing costs. You should also be wary of teaser rates offered by unscrupulous lenders.

Know that every private lender is different and will have their criteria when it comes what they expect from you as a borrower.Ask your lender to be transparent about any documentation you might need throughout the loan application process.

Know what your hard money lender expects from you to get the best deal possible

This type of loan is often used to finance rehabilitation and construction projects.If your seeking financing for renovation or construction, a lender will want to ensure that you are competent and knowledgeable about your project. In these cases, before approaching any lender, have details about the property you wish to purchase, a budget for your renovations and thorough projections about the future profitability of your project. You build up your lenders confidence and gain room to negotiate by demonstrating your understanding of a project's potential.

You need to have a detailed understanding of what your property is worth to qualify for the best possible loan. A private lender usually bases the amount of financing offered on the market value of the property you are purchasing. You won't qualify the largest possible loan if you don't have a good sense of what your property is worth.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

What is Hard Money?

Are you having trouble securing a loan? You may want to consider a hard money lender. Hard money loans are often provided by individuals or a group of investors that use property or other assets as collateral.

If you need the loan quickly, and you have been turned down by traditional loan companies, a hard money loan may be a good choice. These loans are mostly based on collateral and not with your ability to pay or credit rating. If you default on the loan, then they take the asset and sell it to recoup the principal and interest of the loan. These lenders are not, however, in the business of selling defaulted property. They are in the business of making money by providing loans and, to that end, want you to succeed in your endeavor.

These loans are short-term in nature, one to five years, with a balloon payment at the end. Many, however, will offer extended terms if needed. There are many advantages to a hard money loan. Here are just a few: Speed--Since hard money lenders are more concerned with collateral then your financial condition, you will not be required to hand-over the mounds of paper work that traditional lenders are bound by. Flexibility-- Traditional lenders are very strict with their repayment terms while a hard money lender may be able to adjust the loan to fit your situation. Approval--The hard money lender is more concerned about the value of the collateral. Because of this, an investment property may give you a higher loan than a rehab.

Loan-to-Value Ratio

If you have been turned down by other lenders because of negative information on your credit report, don’t give up. These types of lenders can often find a way to work with you despite your credit challenges. Some offer loan-to-value ratios in the range of 75 percent. At Level 4 Funding, we offer LVRs as high as 90 percent.

Hard money loans make sense if you are fix-and-flip investor and will sell the property in a year.

A hard money loan can be perfect for this investment strategy because of it’s short-terms and quick-to-funding model. You will want to have your numbers perfected in order to make sure that you can sustain yourself and your project through the rehab. Don’t forget the cost of essentials such as utilities, taxes, and time to sale. Some lenders will evaluate the loan based on the after-repair value. This, however, adds risk to the lender and for that reason will carry a higher interest rate. In most cases, hard money loan can be funded within one week compared to 35 to 45 days for a conventional loan. The application can get approved in a day as compared to collecting retirement before you hear from a traditional lender.

Before you proceed, you will need the advice of good loan company that can guide you through the loan process. Contact Level 4 Funding to secure the guidance you need to help you succeed with the project you have in mine, and the many more to come.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

5 Tips to Successful Hard Money Loans

Hard money loans are a great way to begin a successful career in real estate. Following a few tips will ensure your success.

Any borrowing experience can be stressful if you are not well prepared. But understanding the process and knowing about a few tips to follow can make your first experience with hard money loans simple and successful. Even without personal experience this information will give you a confidence that you are making good choices and will have success with your project.

Picking the right lender is a very important first step in the process. You will want to do some research to make sure that the lender has a good reputation and has experience working with borrowers. You will also want to be sure that you are comfortable working with the lender and within the standard terms that the lender offers. Equally important is selecting the right property. You need to be sure that the numbers work on any property that you are considering. Remember that this is a business deal and there should be no emotional attachment to the property. If the numbers won’t end with you making a profit then it is not the right deal for you.

Being Prepared Is Critical To Your Success

Even with the fast funding of hard money loans, you need to have been planning for your purchase for a considerable amount of time. The loan is likely to be limited to 75% of the cost of the property so you will need to have access to the remaining cash. This down payment is your “skin in the game” and also represents your equity in the property. Having the time to save the 25% down payment also relieves the added stress that will occur if you are using another unsecure resource to borrow additional money. You will also want to be sure that you have carefully prepared all of your paperwork. This can include research on the property and your business plan for buying, improving and selling the property. Some lenders will also want to see documentation showing your cash reserve for any repairs or operating costs and proof of the down payment funds. Having your financials ready can help to reduce the time that it takes you to be ready to seek a loan when you find the perfect property.

Manage Your Expectations

It is critical that you begin each real estate purchase and project with a realistic time line. It can be easy to get over excited on the first few projects and start to believe that the work can be completed more quickly than you first estimated. But in almost every case, you will find that the initial time estimate is shorter than the time required to complete the entire project. Be sure to build in a little extra time as a buffer. This will allow you to complete the project without the added worry of defaulting on the terms of your loan. Hard money loans are a great tool to begin real estate investing but you must be sure to make good decisions and maintain realistic expectations throughout the process.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

Commercial Real Estate Loan Rates

Do you have an office building, a rehab, or a multi-unit apartment building? With commercial real estate loan rates at one of their lowest, now may be the right time to consider a loan for your next real estate investment.

If you are an owner or looking to purchase a commercial property, there’s good news to be had: Commercial loan rates remain at an all-time low. With the Federal Reserve promising four rate hikes this year, this may not be so in the future. For this reason, this may be the perfect time for you to purchase or refinance a commercial property. Level 4 Funding has the team that can help guide you through the process and help you feel like a well-informed purchaser. Let’s take a look at how commercial real estate loan rates work and the interest rates the different types of lenders charge.

If your Credit Score is 680, you’ve been in business in 2-plus years, and plan on occupying 51% of the building, you may qualify for a SBA 7 (a) loan. If your project is between $2 and $3 million dollars you may want to explore the opportunities for financing from insurance companies and conduit lenders.

Commercial Real Estate loans have lower interest rates because they are collateralized by the commercial property. There are four factors that affect the interest rates for the Commercial loan. They are:

1) The Business and Customer creditworthiness: Your rate will be determined by the credit score of the customer and business, the higher credit score the lower rate.

2) Is the commercial real estate loan fixed or variable? A fixed rate loan is a loan that has a fixed rate for the term of the loan. The variable rate loan is reset from 1 to 5 years and will be adjusted based on current rates. Most people will not qualify for fixed rates.

3) What is the term and size of the loan? Hard money lenders offer loans with higher rates and shorter terms while conventional lenders offer longer loans with lower rates.

4) Prevailing Market Rates: Interest rates move up and down based on the government bond market. Keep informed about the movement in the government bond market and how they will affect your rate.

The Lender Has the Biggest Impact on your Rate

1) SBA loans--rates run 4.75% to 9.25%, the 504 loans are best for loans over $1, 000,000 and come in three parts: 50% from the bank, 40% from the SBA and 10% from the borrower. You will need a credit score of 680+.

2) Hard Money Loans--Rate run 10% to 18% and covers about 20% of the market. The rates are high because the loan is not based on the credit worthiness of the borrower but the value of the property. The loan-to-value runs around 55% for many hard money lenders.

3) Other Lenders--Only a small amount of loans come from Insurance companies and Conduits.

Commercial loans can be structured in three ways: fully amortized loans, interest rates resets, and balloon payments.

You may want to purchase commercial Real Estate or refinance a commercial property. There are wide varieties available for high credit scores and lower credit scores. Call and counsel with Level 4 Funding to find what works best for you in your situation. We offer rates as low as 7.99 percent.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

Alternative Business Loans Arizona Entrepreneurs Best Option

Exploring alternative business loans, Arizona start up and small business owners could be surprised by their options. There are many reasons that an alternative loan could be your best choice.

Traditionally, when a business owner needs money to fund a startup or to grow a fledgling business, the first stop is their local bank. But there can be many hurdles to overcome when seeking a loan from a traditional lender. Alternative lenders provide business loans Arizona small business owners actually have a chance of securing and that is just one of the many benefits that they offer.

There are two main benefits to working with an alternative lender. The first is that the approval rates are much higher than a traditional lenders and the second is the fast approval and funding time frame. As an independent entity, there is not the mile of red tape to slog through with most alternative resources so borrowers enjoy a much better customer service experience for the most part and a higher success rate.

When alternative lenders offer business loans, Arizona borrowers will discover that the lenders tend to be more flexible on terms as well as qualifications for the loans. Alternative loans are therefore a good option for a business looking to finance inventory or for working capital which is not something that banks will approve. In addition, the alternative lender is not as likely to require that the business owner use personal assets as collateral for the loan. Which offers the borrowers more confidence in the lender and personal security as well.

Personal Credit is Not an Issue

Poor personal credit is often a factor that will derail business loans Arizona business owners are seeking. Banks are not willing to process a business loan without a deep dive into the personal financial status of the company owners and even some of the other major officers of the company. That is not an issue for alternative lenders as they are primarily interested in the merits of the business and not the owner’s personal finances.

Time is On Your Side

Anyone who has applied for any type of loan from a bank knows that the process can be long and arduous. A personal mortgage loan can take weeks to process. But a business loan application can actually drag out for more than three months. By the time a bank is willing to fund a business loan, the need for the money could be gone, the opportunity could be lost and the business could even be floundering. Business deals are often time sensitive, but traditional lenders tend to overlook that fact. Great opportunities to grow a business don’t appear every day, so business owners need to be prepared to act when the opportunity arises. Securing a loan from an alternative lender is a great way for an Arizona business owner to maximize an opportunity to expand, diversify or land a huge client that might otherwise have gotten away.

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

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

Important Considerations when Choosing a Hard Money Lender

Hard money lenders are many real estate investors choice for funding, yet many just getting into the field know little to nothing about this lending option. Let’s take a look at what this type of lender can bring to the table.

Hard money lenders are not held by the same regulations that banks and credit unions must operate under. Because of this, they can offer loans to individuals and businesses with less than stellar credit. Many are private individuals who specialize in several types of real estate investment strategies from multifamily to office to the fix-and-flip model. These types of loans are asset based, meaning that the lender will look at your collateral as the prominent element of the loan. These types of loans are good for investors just getting in to the real estate investment model.

Another positive to those that operate under less regulation is that they are much quicker to funding. This becomes important when an investor is looking to get into a property, do some quick renovations, raise the property value, and get it on the market or obtain a loan from a traditional lender that is based on the property’s new value. If you end up developing a long-term relation with a hard money lender, you will find that you can often receive the funds you need for that next investment property in as little as a few days, compared to a month or more from other types of lenders.

Be sure to check the small print. Are you working with a hard money lender that offers a no-penalty clause for early payments? A pre-payment penalty states if you pay your loan back in full before the actual due date, a penalty will be assessed. The fee is percentage-based or the amount in interest that you would have paid for a set number of months. This can lead to tens of thousands of dollars. If you have an existing loan with a pre-payment penalty, be sure to assess fees before paying off the loan in full to determine if this is the right strategy for you.

Know Your Exit Strategy

While your property may be acting as collateral, hard money lenders do not want to be in a position of laying claim and having to foreclose on a property due to unpaid debt. For this reason, they will want to know your exit strategy. An exit strategy is how you plan on paying off the debt. Most of these loans are short-term, anywhere from 3 months to five years, making this component an important consideration for both the lender and the borrower. A few options are to refinance with a commercial mortgage, renovate and sell, or pay the debt off with business capital.

Know your exit strategy before considering a hard money lender. Going in with strong collateral and a good exit strategy are keys when considering going after a hard money loan.

At Level 4 Funding, we work with hundreds of private hard money lenders. Our rates start as low as 7.99 percent with terms that run anywhere from 3 months to 5 years. Call us to see if we are the right brokers for your next real estate investment deal.

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

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