Showing posts with label commercial hard money lenders. Show all posts

Sunday, June 3, 2018

Spotting a Business Loan Arizona That Is Too Good To Be True

(Looking for a great deal on a business loan Arizona is smart. But you need to be able to determine which offers are legitimate and which are actually a scam.)

When you are searching for a business loan Arizona, it can be difficult to tell which lenders are legitimate and which are actually running a scam just to collect fees from unsuspecting potential borrowers. But completing your due diligence will reveal some information that will give you a good indication of which firms are legitimate and which are scams. There are some legitimate lenders who do request a processing fee when you submit your request. So that is not always a sure sign of a scam but there are a few dead giveaways.

When researching lenders to submit loan applications to, it is wise to always eliminate any that are outside the United States. This will greatly help to reduce the number of shady or fake lenders that you will be speaking to. Any lender who is outside the country is not going to be forced to follow any U.S. laws and that greatly increases the potential for you to become a victim of a scam or to have your personal information and identity stolen. In addition, if you are working with a firm who claims to be in the United States and then in fact is not, stop all transactions. A business who is hiding their location is more than likely not legitimate.

If you are told that there are no qualifications to be met for business loan Arizona approval, you are likely dealing with a fake company. These “firms” are likely to say that they charge a somewhat substantial fee for the loan request to be processed but then the fees are applied to your loan points. And that it is just a formality because there are no criteria that you must meet to get approved. These are all lies to get you to pay the fee. Once you pay then the lender never calls you again and will not return your calls or emails.

Don’t Be Fooled By an Office

Even if the company has a nice office in a respectable neighborhood there is no guarantee that they are legitimate. In most cases the office is in another state or city and all that you are seeing are pictures on a website. Not only is the office likely to belong to someone else but the entire business could be nothing more than a person who is running a website and collecting application information to sell as well as bilking borrowers out of application fees.

There Is No Free Loan

You are never going to find a legitimate business loan Arizona that is offered without any fees or interest. Lenders are in business to make money just as you are. So always look very closely at the entire contract and all of the fee and payment structure of any loan that appears to be too good to be true.

Friday, June 1, 2018

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.

Monday, May 28, 2018

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

What Hard Money Lenders Arizona Are Looking For

Understanding what hard money lenders Arizona require to fund a loan will make your application process fast and easy so you can move forward with your real estate investment deal.

Most people feel a great deal of apprehension when they are requesting a loan. There are mountains of paperwork as well as many lofty qualifications that must be met. And even after attempting to meet all of the criteria, many potential borrowers are turned down. But knowing what hard money lenders Arizona require to fund a loan request can turn a difficult situation into a very successful investment deal.

Unlike traditional loans which are based on your creditworthiness and ability to repay the loan, hard money loans are based on the value of the real estate being used to secure the loan. This collateral is really the deciding factor on loan approval and the amount of the loan. So credit issues or no credit will not eliminate your chances of securing a hard money loan.

You also need to understand that hard money lenders Arizona are in business to make money. So even though they are not imposing the credit qualifications that a traditional lender would use, the hard money lender Arizona is going to protect his or her investment. This is done by only funding a loan that is between 65% and 75% of the value of the collateral property. This ensures that if the borrower defaults on the loan, the lender is still able to sell the collateral property to recover the full balance on the loan.

Hard Money Down Payments

Because hard money lenders offer less than the full purchase price of a property, buyers need to furnish the remaining funds in the form of a rather substantial down payment. This actually is a second form of security for the lender as buyers have their own funds tied up in the deal and will work even more diligently to make the deal a success and repay their hard money loan. Lenders look at the borrower having “skin in the game” as a great source of motivation.

A Good Option When Used Correctly

Hard money loans are a good option for many borrowers as long as they understand the process of the loan and how to use the money correctly. Paying a higher interest rate on a short term hard money loan can often be the difference between closing a deal and losing out to someone else who is already funded. Then circling back to a traditional lender to refinance at a lower rate and a longer term is the smart move. But this entire process hinges on borrowers knowing how a hard money loan works and being prepared to work within the terms of this type of loan.

Being prepared to provide the large down payment and being willing to use the full value of the property as collateral on the hard money loan are two steps that each borrower much take to benefit from a hard money loan.

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.

Saturday, May 26, 2018

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.

Tuesday, May 15, 2018

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.

Thursday, May 10, 2018

How to Make Getting Hard Money Business Loans Quick and Easy

When it comes to getting approved to hard money business loans, it can be an arduous process. But Level 4 Funding offers simple “ABCs” to help you become eligible for loans and get approved fast!

When you decide you want to get hard money business loans for your company, there is a lot you can do to prepare before you ever even meet with a lender. For example, as with most anything, research can begin on the Internet. Do some digging about the types of loans available to business owners like yourself in your same industry and specific to you needs (for example, are you looking to purchase equipment or a building? – there are specific loans designed for each of those needs).

Once you’ve done some initial research about the types of loans out there, do your due diligence on lenders. While there online marketplaces that make getting a loan without ever leaving the comfort of your coach very doable, it’s also important to make sure you have the proper expertise and guidance — especially if you are first-time borrower. That comes from working with a professional lender.

Look for lenders that are local, have experience with loans in your specific industry and who can share their portfolio with you. Getting a good feel for your lender and moving forward on the same page makes the process of applying for hard money business loans much quicker and easier.

When you have made the decision on a lender, you can then decide if you need a short-term or long-term loan.

There are so many different ways to go about obtaining the loan as well as the kind of loan. Once you begin the application, you and your lender can work together on fine-tuning the right terms for your loans.

Once you submit your application, there are some evaluations that take place.

While with conventional banks and long-term loans, the process is much longer, requires a more complex application and proof of multiple forms of documentation, financials, credit reports and so on short-term loans with an alternative lender move much more quickly. The application process and fairly straightforward and the lender is mainly interested in collateral — and not much else. So if you want to move the process along, be prepare to prove what you can provide as collateral to secure the loan. It can even be the equipment or property that you intend to purchase with the loans. It’s a good idea to obtain legal advice when it comes to reviewing the term agreements. Be sure to take your time with all the documents that will require your John Hancock. These terms are binding with that signature. This is also a good time to review the entire contract with a fine-tooth comb to ensure that you haven’t missed any clauses about additional charges, fees or even pre-payment penalties. When you are ready to find a loan that’s right for you, call us at Level 4 Funding today.

Monday, May 7, 2018

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!

Thursday, May 3, 2018

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.

Tuesday, May 1, 2018

What You need to Know About Getting Business Loans Arizona

Obtaining business loans Arizona gives borrowers the chance to get money for their businesses for a variety of uses such as equipment, property, and improvements, to name a few. Level 4 Funding explains the process of applying for this type of loan in the state.

Whether a first time borrower or a multiple time borrower of business loans Arizona, it’s crucial to understand how these loans are different from a loan to purchase a residential home or property, for example. These loans can be very beneficial for business owners that need more cash flow to grow and build their businesses. It can really provide an opportunity for companies in a number of ways. However, preparation is essential.

When preparing to apply for business loans Arizona, you should get your most current credit score report and full credit history to submit to the lender. You should also put together a business plan that details the marketing strategies, analytics of the industry and other statistics that the lender might find helpful in making his decision to approve your loan.

It’s also a good idea to organize both personal and business financial statements and documentation and any other paperwork that the lender advises you to obtain for your business loans Arizona. If you give yourself a head start on preparation, the application process will go much more smoothly and quickly. It’s also important to read through the agreement very thoroughly. Sometimes there are hidden clauses, fees or other verbiage included that you might pass by on the first read. The lender will not take it lightly if you can’t make your payments, so you shouldn’t take this binding contract lightly either.

It’s critical that you know the repercussions of not being able to meet the terms of the agreement.

If you become in breech of that contract, the lender has the right to take ownership of the collateral you put up to secure the loan. This could be your car, your home or your business or you could face foreclosure on your property. Make sure before you agree to a repayment schedule that you really can make those payments, on time, every time.

You might be responsible for other fees when you obtain the loan too.

When you get approved for a loan, there may be charges or other fees that apply, even appraisal costs, etc. that you might not have taken into consideration. The down payment you’ll be required to make is somewhere between 20 to 30 percent (give or take as it relates to the current health of the economy). So above all, double check your finances and budget before signing to make sure you can handle these payments. When seeking a lender in Arizona, Level 4 Funding is your go-to expert for business loans to help you take your business to the next level. Our experts are always available to help you find the loan that will work for you. Call today.

Monday, April 30, 2018

Tactics to negotiate a better hard money deal

You may be seeking a hard money loan and looking for the lowest possible interest rate, but there may be additional costs you could be unaware of beyond the interest rate. You will be at a disadvantage if you aren't aware of these expenses and don't try to negotiate with your lender.

Some private lenders may earn their profits by charging fees rather than collecting interest payments. In the worst case scenario, an unscrupulous lender could lure in borrowers by advertising a low-interest rate, all the while charging them exorbitant fees. Even if a lender is reputable, borrowers should be aware of any additional expenses when it comes to their loan.

Private asset based lenders are business savvy and approach each loan as a business deal. There is always room to negotiate the terms of any business deal, and the same holds true for your loan.

The most apparent expense on an asset based loan is the point fee, which is a percentage of the loan amount which is paid by the borrower up front. You should do your best to negotiate the point fee because depending on the size of your loan this cost can be considerable.

You as a borrower need to be aware of the cost of your loan in points and any other fees that may apply.

Which fees can you negotiate when it comes to hard money loans?

In the first place, there's the underwriting fee, which is the cost of a lender's due diligence. The cost of underwriting can range from 750 to 2,500 dollars depending on an individual deals complexity. In addition depending on your circumstances the cost of servicing your loan could also be a factor. Loan service fees cover the cost of recording payments and generating reports, and this price can be considerable. A lender may charge a fixed monthly payment or charge a given percentage of the loan amount annually.

In addition, be aware of any late fees, or any potential change in your interest rate if you miss a payment. You will want to keep these fees as low as possible because if you miss a payment due to financial difficulties, higher interest rates and late fees will make it harder to catch up.

The main advantage of asset based lenders over traditional banks is that they are flexible and that their is always room to negotiate the terms of your loan. If you don't try to negotiate these additional fees you may be taking on an unnecessary expense.

Take advantage of the flexibility offered by hard money lenders

Some of the fees mentioned before may or may not apply in your case. But you should try to take advantage of the flexibility offered by private lenders. If you are a borrower with considerable experience and strong collateral on hand, in most cases your private lender will work with you to negotiate any fees.

In short don't look at an attractive interest rate when shopping for a loan. If you want to get the best deal possible, know the fees that are being charged and to do your best to negotiate.

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.

Thursday, April 26, 2018

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.

Saturday, April 14, 2018

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.