Showing posts with label commercial mortgage broker. Show all posts

Wednesday, May 30, 2018

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.

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.

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 22, 2018

Tips to Secure a Business Loan Arizona

Securing a business loan Arizona can be challenging. But following a few tips can greatly improve your chances for a fast approval.

Securing any type of loan can be a very stressful process. But the application process for a business loan Arizona can appear extremely overwhelming. Unlike a personal loan application which is fairly simple and straightforward, a business loan application requires a great deal of information about the business and even the personal finances of the owners or principles of the company. To ensure that you are investing your time in a successful loan application, you will want to be sure to follow a few simple tips that have been found to produce successful results.

The business finances are critical to any loan approval as you might expect. The company should have been profitable for at least two years to have a good chance at securing funding. Having financial statements and credit reports in good order before requesting a loan is very important and will save you a great deal of time when completing application. Also having the owner’s information readily available will make the process less stressful.

In addition to financial information, lenders want to have a good understanding of the company, its history and the experience level of the owners and senior management team. This means detailing the birth and growth of the company as well as explaining the business plan and reason for the loan request. Simply stating that it is for growth or expansion is too vague. Explain what the funds will be used for, how they will benefit the company and the expected return on the investment. Details about how the loan will help the company achieve goals in the five and ten year plan will demonstrate strong and experienced leadership and increase the lenders confidence in your business.

Think Local

Unless you have a very large and well established business, a local lender might be a better option for a business loan Arizona. Local lenders tend to place more value on business history, involvement in the community and the local economy. Large national lenders work more from a very strict formula for loan approvals where a local lender has the ability to “bend” the criteria slightly to process loans that are less favorable. Knowing this though, be certain to have a very well prepared and detailed loan application for local lenders. They will be even more motivated to learn about your business and the professional history of the management team.

Be Well Prepared

When seeking any business loan Arizona, detailed preparation is your best tool for success. Detailed financial information and history about the business will help to establish the creditworthiness of the business. This information presented to a local lender in a professional format is going to create a good first impression for you and for your business. And though the process might take some time, you will find that you stand a much better chance of getting your application approved.

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.

Saturday, May 5, 2018

Why it’s Important to Find a Flexible Lender When Commercial Real Estate Loan Rates are High

When you need a loan, finding a flexible lender that is able to negotiate for your best interest, even when commercial real estate loan rates are up, can help you get the best value for your money. Level 4 Funding shares why this is important.

Obtaining a loan can be tricky business. In fact, over half of loans that are submitted are typically denied. While this can seem very daunting for someone who is trying to obtain a loan, it’s crucial to remember that there are many options out there when seeking a loan. Conventional loans are very difficult to receive approval for, but there is hope in knowing that non-traditional lenders are there to say “yes” when banks have already said “no.” Even if you have less-than-desirable credit, you are a first time investment purchaser or current times mean high commercial real estate loan rates, you can still get approved.

Traditional banks are very rigid when it comes to approving loans. There is a lot of bureaucracy and red tape that must be dealt with conventional lenders — and they are rarely very flexible. That’s why hard money lenders are a good option. They can be a lot more flexible because rather than focusing on credit score, your business plan or other criteria, they are more interested in the assets of your business or the property you are purchasing which can serve as collateral. You will need to ensure them you have the collateral to put up and perhaps provide a brief outline for the business or property you plan to purchase.

While these lenders deal in short-term loans which typically have high commercial real estate loan rates, if you find a reputable lender who truly believes in your business plan or is flexible enough to negotiate better rates for your loan. However, because short-term loans typically have a repayment schedule that ranges between three months and three years, naturally the commercial real estate loan rates are going to be higher than a traditional long-term loan that allows for many years for repayment. Sometimes the commercial real estate loan rates associated with a short-term loan are simply higher because the lender is making a high risk by approving a loan that would typically (or already has been) declined by a traditional lender like a bank.

There is one more thing your lender might want you to provide.

Many short-term lenders will want you to provide you “exit strategy” from the loan. For example, would you sell the property? Refinance with a more conventional lender once the business starts earning a profit? It’s important to prove how you will build cash flow so you can ensure the lender you’ll be able to make the repayments on schedule.

It’s also important to find a lender you can trust.

While getting the best rates are crucial, it’s also important to work with a lender that is reputable and you truly believe that they have your best interest in mind when creating the loan agreement. Level 4 Funding can help you get the loan you need (sometimes in as little as 24 hours) with people you can trust.

Thursday, May 3, 2018

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.

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.

Sunday, April 29, 2018

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.

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

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.

Tuesday, April 10, 2018

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.

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Monday, April 2, 2018

The Top Differences to Watch for with Private Hard Money Lenders

While there are over 600 private hard money lenders in the U.S., no two are created equal. Understand the differences and what to look for when choosing a lender for your next project.

Looking for a short-term loan quickly? Need 7 to 10 days? Looking to purchase residential and commercial property for purchase and renovation? Obtaining quick capital via a private hard money lender may be your best option. In fact, this is one of the primary forms of financing for first-time real estate investors. Let’s take a look at what are the marked differences among the various lenders.

Some private hard money lenders focus on properties in relatively good condition, while others will fund properties in poor condition if you come aboard with a good business plan and the numbers to back it up. This includes an in-depth look at renovation costs, time frame, and market. You will also need to include the monthly costs that you’ll incur during the renovation process such as utilities, insurance, loan interest and property tax. Some companies and private investors loan only on the LTV or loan-to-value, while others will consider the ARV or after-repair-value. For instance, some will issue a loan up to 80 percent of the LTV or 70 percent of the ARV. If your model is to rehab properties in poor condition for a fix & flip, you’ll want to be sure to ask your potential investor which value they consider when funding a project.

Buy-and-hold investors, on the other hand, obtain private hard money lenders in order to ensure quick capital. After renovation is complete, they look to more traditional loans for longer terms and lower interest rates. You’ll find many private investors that specialize in one segment of real estate. For instance, there are hard money lenders that invest only in the office or multifamily segments, while others focus on the fix-and-flip model. You’ll want to be sure to find one that is comfortable and knowledgeable in your area. There are even hard money lenders that fund residential loans. These are, in most cases, considered bridge loans—short term loans that bridge from one property to another such as when home owners buy a new home before their old home sells.

Interest Rates and Average Lender Fees

Going into this arena of commercial lending, it’s important to be aware that the interest rates are going to be higher than conventional mortgages because the hard money loans are shorter terms, interest-only payments, and increased risk for lenders. The interest payments are considered “holding costs” and are monthly fees incurred prior to selling or refinancing. These interest-only payments result in lower monthly payments. When you agree to a loan with a hard money lender, there can also be what are known as “loan origination fees” or “points.” Additional fees that the borrower may be required to pay include closing costs, appraisal costs, application fees, prepayment penalties and loan extension penalties.

At Level 4 Funding, we offer loans from 7.99 percent APR with 90 percent LTV.

In addition, we do not charge prepayment penalties and can often fund within days. Because we work with hundreds of private investors, we can usually find an investor in your niche who can offer you the best terms and rates for your project. Call us today for a no-obligation quote.

Technorati Tags: commercial loans,commercial lending,commercial mortgage