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

Sunday, January 13, 2019

Understanding Arizona Hard Money Loans

Not all loans are perfect for every borrower’s needs. Understanding what Arizona Hard Money Loans are and how they are best used can offer you some unexpected benefits.

Many consumers are completely unaware of what Arizona Hard Money Loans are and how they can be beneficial. The misconception is that these loans are in some way less than legal is completely false. These are simply loans which are offered and funded by private lenders and not traditional mortgage companies or banks. And these lenders are providing the money not so much based on the borrower’s credit score but more on the value of the property being purchased. This is because the property is going to be the collateral for the loan. Arizona Hard Money Loans are sometimes referred to as asset-based loans as well.

There are a few benefits to Arizona Hard Money Loans being based on the value of the property. The first benefit is that the borrower can have less than perfect credit and still easily get approved for the loan. Most lenders would prefer to see a credit score of about 550 or more but each lender is free to decide who they are willing to lend money to. Also, by eliminating all of the background documentation and inquiry into a person’s financial history, the approval process can move much more quickly than a traditional loan. In addition, hard money lenders are free to tailor the terms of the loan to meet the needs of the borrower rather than forcing all borrowers to live within the same terms as banks often do.

All of these benefits make hard money a faster and simpler process when time is critical such as for the purchase of a fix and flip property. Finding a great deal on a property is not always easy and when an investor does, it is like to become a bidding war if he or she cannot get funded quickly to close the deal. In these cases, a flipper can turn to a hard money lender and have the deal done in as little as a week.

A Price To Pay

All of these great benefits are not free. Any loan will cost you money in the form of interest and other fees, but hard money is going to cost you a little more in interest than a traditional loan. Because most hard money deals represent a higher risk, the lender will ask for a higher interest rate to protect his or her interest in the deal. In addition, there could be fees or other terms of the loan that works to protect the lender’s investment.

Due Diligence

Because hard money lenders are private lenders, they are free to create the terms of their choice for any loans that they fund. For this reason, it is critical that you read the entire loan document and understand all of the terms of the loan prior to signing it. Even though the lender is private and not a bank, the loan agreement is a legally binding document and you will be required to follow any agreement that you sign.

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.

Types of Loans To Flip Houses in Arizona

It is important to know that there are different types of loans available. And, some Loans To Flip Houses in Arizona offer more benefits than others.

There are dozens of television shows which have popularized the concept of buying a house, making some repairs and renovations and then quickly reselling the home. The process is known in the real estate industry as flipping. And this process is making a lot of money for a lot of people. But there is more to this business than just buying low and selling high. It is critical that investors understand all of the nuances of using Loans To Flip Houses in Arizona.

There are four common Loans To Flip Houses in Arizona for the average investor. And in this case, average means an investor who is going to need to secure financing and does not have a pile of cash under the mattress. The first method is what almost everyone uses to finance a home, the traditional lenders. These are the mortgage companies and banks that everyone is familiar with. The biggest issue when using a traditional lender is the time involved. Just as the name implies, flipping is a fast process which relies on speed and efficiency to make the process profitable. And anyone who has ever applied for a traditional mortgage knows that the process is anything but fast.

The second method is to use personal credit such as the equity in your own home through a refinance or a home equity line of credit. The personal refi has the same issue as the traditional loan in that the time required does not fit the fast process of a flip. The home equity line is a better fit because you have instant and constant access to the fund. But you are essentially placing your own home at risk by using a HELCO.

Arizona Hard Money Loans To Flip Houses in Arizona

Hard money is a loan that is funded from a private lender rather than a bank or mortgage company. These loans are fast and relatively easy to secure as compared to a traditional loan. This makes Arizona Hard Money Loans the best choice for most real estate flip deals. The drawback on hard money is that the cost is higher than a traditional loan. But when time is critical, hard money is the way to go. Hard money is an asset-based loan so the application process is not as time-consuming or stressful as a traditional credit-based loan approval.

Evaluate Your Options

Even though Arizona Hard Money Loans are more costly than traditional loans, the fast turnaround time is often worth paying for. You could find a property, make an offer, get hard money and complete the refi and flip before a mortgage company would even get you an answer on your application. And the fact that Arizona Hard Money Loans are short term is also a benefit as you are not financing out for a number of years and paying interest for the entire time. There is also the option to use the equity in your home or a line of credit but beware of risking your home on the flip of another property.

Tips for Getting Rental Property Loans in Arizona

Rental properties are a great way to grow your wealth. But it can be difficult to secure Rental Property Loans in Arizona.

Home values are climbing which is great for anyone who wants to get into owning rental properties to increase their wealth. Many people are not looking to rent because they can no longer afford to purchase. So the rental market is strong and getting even better. But the housing collapse did have an adverse impact on the fast loans that many investors where using to buy rental properties. Now the best way to secure Rental Property Loans in Arizona is to know a few tips that the pros use.

Getting any loan is always easier if you are prepared to make a sizable down payment. In the past, putting 20% down was a big deal for most investors. But now with the tighter lending restrictions and qualification, 25% down or more is your best bet. Not only does this help to keep your payment lower, but it also will get you a better rate in most cases. So cash on hand can save you a lot in the long run.

Another important factor in getting approved for Rental Property Loans in Arizona is having great credit. Being a strong borrower will always get you the best rates and some other benefits as well. You might find that the processing of your loan request is not only faster but the process is less stressful as your credit does a lot of the talking for you. Lenders want to know that they are working with a serious professional who has a strong financial history and professional history.

Work With A Little Guy

Big banks are not going to be as impressed with high credit scores as a smaller bank or lender. Big banks are looking for big deals, so a rental property is not going to really get them excited. So unless you are buying an entire complex, check out smaller lenders who are willing to work for your business. They will often be more flexible simply because that is what they have to do to get customers. Big lenders make their money from corporations and huge businesses while smaller lenders, tiny local banks and savings and loans survive by doing business with local companies and individuals.

Be Creative

If you are finding it challenging to secure Rental Property Loans in Arizona, then get creative with your financing. The easiest way to finance a new rental property is to ask for seller financing. This is not always an option, but if you can find the right seller, then the financing could be fast and easy. Also, look at other personal sources that you might have. Using a personal home equity line of credit or even a personal loan could be a great way to make a fast purchase. Then you have the option to take some time and shop for a great rate to refinance. Using these tips can help you to secure your first few loans to begin a career as a rental property owner.

Securing Your First Loans To Flip Houses in Arizona

Becoming a real estate investor by flipping houses is a great way to start a new career. But you will need to understand some of your options to get your first Loans To Flip Houses in Arizona.

Entering the real estate industry is a great way to grow your personal wealth, be your own boss and have the opportunity for almost unlimited income if you are willing to work hard enough. But what stops many people is the challenge of securing the first few Loans To Flip Houses in Arizona. The old saying that you need money to make money could not be more true than in the flipping business. Getting the first few projects completed at a profit is what allows you to continue to make more purchases and more profit.

One method used by many homeowners who are interested in flipping is called cash-out refinancing. This process basically allows homeowners to use the equity in their personal home to finance their first flip. You will be refinancing your current home for a new mortgage which is greater than the amount that you currently owe on the home. Then you have the excess cash to uses to make the down payment on your flip property as well as any repairs or renovations that you are going to make.

Cash-out refinance Loans To Flip Houses in Arizona will require that you have a minimum credit score of around 650 and that your debt to income ratio is below 45%. It is also recommended that you have 30% to 40% equity in your home. If you meet these qualifications then you are certain to be able to get a much better interest rate on your refinance than you would be paying if you were to use a credit card or some type of personal loan to finance your first flip.

Added Costs

Because these Loans To Flip Houses in Arizona are a mortgage refinance, you will be paying some additional fees that you would not be facing if you were to use a personal loan or credit card. In most cases, you will be required to pay closing costs of anywhere from 3% to 6%. In addition, you could end up with a higher interest rate on the refinance than you had on your original mortgage so that could cost you more over the life of the loan.

Compare Total Cost

In the end, you are looking for the most affordable financing that you can find to begin your flipping business. So most new flippers will explore all of their options and compare the total cost of each lender and type of loan. Options such as Arizona Hard Money Loans and home equity loans or a home equity line of credit might be a better option for you, but you will only know once you have completed an exhaustive search of all of your options and then compared the total cost of each option. Getting the lowest cost on your first few loans could be the difference between making no profit and leaving the business or making a solid profit on each flip and growing your business.

Saturday, January 12, 2019

Rental Property Loans in Arizona for the Young Adult

Being young does not always mean that you are living day to day. Learning about Rental Property Loans in Arizona could change your life.

Many finance experts say that your first major real estate purchase should be a rental property. As a younger person, that might seem like a crazy thought. But in reality, it’s not a bad idea. You are young, you have very few bills and you are not accustomed to a large home with all of the creature comforts that you will have acquired in a decade or so. So why not keep living small for a few years and begin to grow your wealth?

You definitely need a place to live, but what if you could live in a portion of the property? Rental Property Loans in Arizona for multi-tenant homes is a great way to live affordably and let your tenant pay your mortgage. Rather than live in the spacious three bedroom main level of the home, you could live in the one bedroom apartment over the garage or in the lower level while a family pays all but a small piece of your mortgage. And all the while, you are building equity in the property. In a few years, with a great deal of your mortgage paid by tenants, you could move into the larger unit or even buy a home for yourself and begin to rent out the one bedroom as well.

Your first question is how to get financed for Rental Property Loans in Arizona if you are a younger person? The answer is as simple as two words. The secret is the down payment. If you can pay 25% or even 30% down on a property, then you will be able to get financed as long as you have a good credit rating and a steady job. The lender will see instant equity in the deal and know that the property represents solid collateral for the loan.

Getting The Down Payment

Most young investors don’t have 50k or 60k sitting in a savings account to make the down payment on a $200,000 rental property. But there are several ways to get the money if you are dedicated to your plan and want to have a tenant paying your mortgage. The most obvious method is a second income. This could be a part-time job, a second job or even a side gig that will make you some extra money. The secret is to never touch the money. Just put it away in an account and act like it is not real. In just a year or two, you could save enough to become a property owner and a landlord. Not only will you be saving your second income, but with less free time, you will be saving on entertainment expenses like moves and eating out as well.

Stay Smart

Even after you have saved enough to make the down payment, you could still keep working and saving to begin the process all over again. In the space of a single decade, you could obtain four Rental Property Loans in Arizona and own four properties which are bringing in money each month. And the best part is that you only made the down payment on each property and then a tenant paid the rest of the mortgage for you. By the age of 35, you could be well on your way to owning multiple rental properties which are over getting close to being paid off.

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.
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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.