Dennis Dahlberg - It Can't Get Better Than This!

Saturday, January 12, 2019

Red Flags on Arizona Hard Money Loans

Not all Arizona Hard Money Loans are the same. You need to be aware of a few red flags that can indicate that the loan or the lender is less legitimate.

Arizona Hard Money Loans are considered non-traditional loans only because they are funded by a private lender. There is no other reason for the term and it does not indicate anything about the legitimacy of the loan or the lender who is offering the loan. But many borrowers are unfamiliar with Arizona Hard Money Loans and because of their ignorance, they believe that these loans are in some way shady or less than desirable or legitimate. But it is also important to note that as with any industry, hard money has a few bad apples in the bunch. Knowing the red flags to look out for can save you the time and frustration of dealing with one of the few but bad lenders.

Not being forthcoming where documentation is concerned is never a good sign in any business. If a lender refuses to provide you with a complete set of loan documents to have them reviewed by a legal professional, then you should be concerned. Even though you are working with a private lender and not a traditional bank or mortgage company, the loan agreement is a legally binding document. And as such, you should have the right to have it reviewed prior to signing it. If the lender will not provide a set of documents then there is likely something less than legitimate in the documents and you should find a new lender.

A lesser red flag but one which should still get some attention is a less than helpful or responsive lender. If no one returns your calls or emails requesting information, then you should expect the same treatment after you sign the contract. This can mean that you could face slow funding or have no way to get a response on an issue or concern during the life of the loan. This poor customer service is all that you should expect if you continue to deal with an unresponsive lender.

Failure To Disclose

The terms of Arizona Hard Money Loans can vary a great deal because the lender is a private entity and not a traditional lender. For this reason, it is critical that you request a complete list of all fees and charges that you will incur for using the lender’s money. If the lender is not willing to provide this information in writing then you need to seek a new lender. It is very likely that the lender will charge you hidden fees which will greatly increase your costs and his or her profit.

Follow Your Instinct

Most importantly, you need to follow your instinct as you begin to deal with any lender. If you feel unusually pressured to sign or to sign a contract very quickly, then there could be hidden fees that the lender is trying to slip past you. If you feel unappreciated, and that the lender in inattentive, then seek a better lender with a higher level of service. Finding the right lender is critical to every flipper and ever purchase.

Dennis Dahlber Broker Ri CEO Level 4 Funding LLC Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Non-traditional Loans to Flip Houses in Arizona

Flipping houses is a unique business and it requires some specific services. Loans To Flip Houses in Arizona offer investors the speed and short-term needed to turn a great profit.

Flipping houses is a process that has become very popular in the last decade. But this newer type of real estate investment deal needs a rather unique type of financing as compared to the traditional mortgages that most homeowners use. Loans To Flip Houses in Arizona need to meet the time frame and other terms that flippers rely on to make their deal profitable. So most flippers elect to use non-traditional finance options.

Hard Money Loans To Flip Houses in Arizona are short-term loans which are funded based on the value of the property and not the creditworthiness of the borrower. These privately funded loans are often called asset-based loans because the property being purchased is the collateral for the loan. Borrowers like that these loans can be approved quickly and that the funding is also much faster than a bank or mortgage company. But all of this convenience comes at a higher interest rate than a traditional loan.

Cash out refinance loans are another option that is available to homeowners who have equity in their personal residence. Most lenders require about 30% to 40% equity in the home and a credit score of about 650. The interest rates are fairly reasonable at up to about 6% but you will need to pay closing cost which will increase your total cost on the loan. In addition, the time frame can be as long as 45 days to get the refi completed and the cash in your hands.

Save The Fees

Another option that many homeowners choose is a home equity line of credit. The beauty of this option is that you can have the application and approval process completed long before you are ready to purchase a property, which allows you to make a fast offer and know that the money is in place to close the deal. In addition, there are no closing fees associated with a line of credit. It is open but costs you nothing until you decide to use the money. Then you begin to pay the interest once you use the money. An added benefit is that the interest you are paying on the HELOC could be tax deductible which will save you even more money in the long run.

Picking The Best Loans To Flip Houses in Arizona

Having many options is always good but it is especially important when you are flipping houses. The most critical factor in a flip is staying on budget to turn a profit. So acquiring a loan affordably allows you to invest more in the renovations to increase your earning potential. A smart flipper will always compare the total cost of all potential loans before selecting the best lender and the best overall loan cost for each deal. Knowing your options, how each loan works and how much it will cost are all factors that will have a huge impact on your success and profitability.

Friday, January 11, 2019

How to Get Rental Property Loans in Arizona

Beginning a career as a rental property owner is a great way to take control of your life and your finances. But getting Rental Property Loans in Arizona can be a challenge.

Getting into real estate investing is a great way to be your own boss and increase your earning potential. But it can be a challenging career to break into. In order to ensure success, it is important to become as strong financially as possible. Being a strong borrower is one of the best ways to ensure that you will always be approved for Rental Property Loans in Arizona. Taking just a few important steps before launching your real estate investment career will greatly increase your potential for not only success but great profit.

Making a substantial down payment is always important on your first few investment properties. Now only does this help to keep your payments lower but it also decreases the amount of interest that you will be paying which instantly increases your profit. Large down payments would be anything over 25% of the purchase price. Knowing that you are going to need such a large down payment, you might need to save longer than you planned before making your first purchase. It could even be helpful to get a part-time job or second job for a period of time to help increase your funds.

Another factor that will greatly influence your profit margin is the interest rate you are paying on Rental Property Loans in Arizona. A lower interest rate is a great way to increase profit. But being new in the real estate business, you might have a hard time finding a good interest rate unless you have great credit. It can be wise to take some time before making a purchase to focus on improving your credit rating. You can do this by decreasing your personal debt, being on time on all of your bills and even paying off some loans early. All of these steps might not appear important at first but they can help you to create a solid financial foundation for yourself and your real estate business.

Prep Your Documents

Once you have a strong financial profile, it is important that you can demonstrate that fact to lenders. You will want to have all of your bank statements, proof of income and tax returns compiled and ready to include with any loan applications that you are submitting. It can take some time to get your documents compiled and in a professional looking presentation. Having this task completed prior to shopping for a rental property will help to reduce your stress level when it’s time to make a purchase.

Keep Your Options Open

You might find that not every lender is interested in offering Rental Property Loans in Arizona to someone who is new in the real estate investment field. So you will want to submit your application to several lenders and then take some time to compare the total cost of all of the loans that you are offered. Making a good first choice is important to a profitable first rental property.

How Your Credit Score Impacts Arizona Hard Money Loans

It is important that borrowers understand how a low credit score can impact Arizona Hard Money Loans. But it is also important to know that it does not eliminate the potential for a loan.

The Internet is full of stories about borrowers who managed to get Arizona Hard Money Loans without having good credit. And the fact is that there are lenders who will make loans to borrowers with a credit score in the low 500’s. But it is also important that borrowers understand that even though the loan approval is not based solely on your creditworthiness, your credit score will have some impact on what you pay to use the lender’s money.

Arizona Hard Money Loans are also called asset-based loans because the loan is approved and funded based on the value of the property being purchased. This property becomes the collateral and is the lender’s security in the event that the borrower defaults on the loan. But the lender is more interested in having the borrower repay the money and the interest than having to go to the trouble of foreclosing on a property and selling it to recover his or her funds.

The best way for a hard money lender to be certain that the borrower will repay a loan is to look at the borrower’s credit score and credit history. A high credit score means that this borrower is very likely to repay the loan with no issues which decrease the lenders level of risk. But a person with poor credit is less likely to repay the loan which means the lender is facing a greater risk. Many hard money lenders are willing to accept that higher risk that comes with a low credit score but in return, the lender is going to charge a higher interest rate.

Low Credit Will Cost You

A credit score below 600 will still get you a hard money loan, but you can expect to pay as much as 20% interest on the money being borrowed. In addition, the lender might not be willing to loan you as much money as he or she would a person with a higher credit score. And you might even pay additional fees for the increased risk the lender is assuming. As a private lender, the fee structure and interest rate are up to the lender and are not regulated in the same manner as a traditional lender.

Arizona Hard Money Loans Are An Option

As a borrower with bad credit, there are not as many traditional loan options available to you. And even with a score in the low 500’s, hard money is still available but at a higher cost. The most important facet for any borrower is to evaluate the total cost of all loan options that are available and select the one which offers the best overall cost and terms. Using hard money could be costly but if it is the only option, it will allow you to begin to rebuild your credit and your assets.

Requirements For Arizona Hard Money Loans

Arizona Hard Money Loans are not the same as traditional bank loans. And because of that, the requirements for these loans are also quite different.

Arizona Hard Money Loans differ from traditional bank and mortgage company loans in many ways, so it only makes sense that the requirements for these loans would also focus on different criteria. But for many borrowers, it is the different qualifications that make hard money so appealing.

Borrowers who have no credit will have a very difficult time getting a loan from a traditional bank because the approval process is based on the applicant’s credit score. The bank feels that without a credit history and a strong credit score, the borrower represents too much of a risk and the bank will decline the loan application. But Arizona Hard Money Loans are asset-based, meaning that they are based on the value of the property being purchased more so than the borrower’s personal credit history. So a person with no credit history can still qualify for hard money.

Likewise, a person who has bad credit is also going to be denied by a bank or a mortgage company with applying for a loan. In some ways, having bad credit is worse than having no credit at all. But a hard money lender is normally willing to lend to a person who as a 550 credit score or better. What the hard money lender is looking for is proof that you have an income so that you can repay the loan that you are requesting.

Fix and Flips

If the borrower is going to use the hard money for a fix and flip project, the lender could also be interested in the experience level of the borrower. Fix and flip projects can be tricky and therefore represent a higher risk to the lender. Each lender is free to set his or her own requirements but most will want to see the records of a few successful projects before they are willing to loan hard money for fix and flip projects. There is an added risk with any property undergoing renovations as until the project is completed, the property value could actually drop and no longer be worth as much as the balance on the loan.

Down Payments

Because the loans are based on the value of the property being used as collateral, the lender wants to be assured that the property will always be worth more than the balance of the loan. This ensures that if the borrower defaults on the loan, then the lender can take possession of the property and sell it to recover his or her investment. For this to work in the lender’s favor, the borrower must often make a large down payment on the property. In some cases, the lender will require as much as 25% down to be certain that the property holds instant equity. Understanding the requirements of Arizona Hard Money Loans also helps to explain some of the benefits and drawbacks and how the loans can be best used.

Thursday, January 10, 2019

Why Are Owner-Occupied Arizona Hard Money Lenders So Hard to Come By?

There are many Arizona Hard Money Lenders out there, but only some of them are owner-occupied hard money lenders. Read on to find out why this is and what you can do about it.

You’ve probably seen a ton of Arizona Hard Money Lenders that lend for residential and commercial properties. In research, you might notice that Arizona Hard Money Lenders that lend for owner-occupied properties are few and far between. But, why?

Compared to other types of loans, owner-occupied loans are more difficult for hard money lenders. Residential and commercial real estate loans have fewer restrictions than owner-occupied loans, making them easier for lenders to process and approve. These traditional Arizona Hard Money Loans can be approved very quickly and without the need for good credit or loan histories, giving them clear appeal.

Owner-occupied homes require much more work due to state regulations. When a borrower offers up his home as collateral for a hard money loan, he is giving the lender control over the property until the loan is paid back. If the loan is not paid back in time, the lender has the ability to take the property. Clearly, this poses a conflict if the home owner is occupying the property. In an effort to protect home owners from hard money lenders, states have put rules in place to make this process more secure.

Owner-occupied Arizona Hard Money Lenders must place applications for these types of loans under higher levels of scrutiny. The state and federal governments have rules in place that require lenders get specialized licenses to lend owner-occupied loans. Lenders also must be more detailed in their analysis and approval process than they might for other types of Arizona Hard Money Loans based on governmental regulations. It can be easier for lenders to simply not offer owner-occupied loans than to go through the processes of getting the correct licenses and having to go through borrowers’ information very carefully.

How Can I Get My Owner-Occupied Loan?

The key to getting your owner-occupied loan is to be able to prove you can make your loan payments. It’s important for lenders to be sure you can verify your ability to pay the loan before they will lend to you. Knowing information about your loan going in can make it easier to get just because you won’t have any surprises. For example, knowing your loan amortization is important. With hard money lender SetaBay, your loan will be fully amortized over 30 years, allowing you to pay in smaller amounts over time.

Search for an owner-occupied money lender near you.

Although there aren’t too many owner-occupied Arizona Hard Money Lenders out there, they aren’t impossible to find. SetaBay, for example, is approved to lend owner-occupied real estate loans and they even offer great benefits for borrowers. Low rates are available, there is the potential for 100 LTV financing, and they have no pre-payment penalties on their loans. For anyone looking for an owner-occupied loan, consider SetaBay.

Dennis Dahlber Broker Ri CEO Level 4 Funding LLC Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Home Equity Loans to Flip Houses in Arizona

Flipping houses can be a very profitable business once you have the means to finance the purchase. Using home equity Loans To Flip Houses in Arizona is one solution.

Flipping houses is a fast-paced business and having instant access to funds when you find a great property is critical to your success and longevity in the business. Traditional lenders just can’t meet the timetable to be a useful and reliable resource for most house flip purchases. But if you own a home outright or you have a great deal of equity in your home, then you can put that to use rather than searching for other types of Loans To Flip Houses in Arizona.

Many homeowners are offered preapproved home equity loans or a home equity line of credit when the amount they owe on their home is far less than the value of the property. These funds can be used for anything that the homeowner chooses and the loan is basically a second mortgage on their house. This fast access is great for flippers who want to buy a place fast, add some value and then sell it quickly. The money from the home equity line is only used for a short time and the homeowner does not pay a huge amount in interest or in fees and closing costs.

Another benefit of using home equity Loans To Flip Houses in Arizona is that the interest rates are much lower than those of a short-term hard money loan or a personal loan. Most banks offer very competitive rates for a HELOC or a home equity loan to entice homeowners into using the money. Most traditional lenders are offering rates anywhere from 5% to 9% while hard money lenders could ask in the neighborhood of 15% or even 20% for a short-term loan. That will greatly reduce your potential to turn a good profit.

The Down Side

There is a definite downside to using home equity Loans To Flip Houses in Arizona. Not only are you risking the house that you are flipping if you can’t make the payments but you are also risking your own home if you run into trouble and the flip loses money or you are unable to sell it quickly. It is always important to consider what you are risking and how you will carry all of the payments in a worst-case scenario.

Evaluate Your Choices

As a brand new flipper, risking your personal home on a new business venture might not be the best choice. You are already in a position of a great stress as you learn the new business and having your house on the line will only add to that stress. But as you become more experienced and understand the process, the stress and the level of risk will decrease. At that point, using the equity in your home will open up new opportunities for you as the funding is instantly available. In addition, the lower interest rate will help to increase your profit margin and allow you to grow your house flipping business even faster.