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Monday, January 14, 2019

Red Flags On Loans To Flip Houses in Arizona

Sometimes it can be challenging to find a good deal on Loans To Flip Houses in Arizona. But if you find a deal that looks too good to be true then it probably is fraudulent.

Getting into the flipping business takes a lot of hard work, research and time as well as a good amount of cash or a reliable lender. When you are seeking a solid lender for Loans To Flip Houses in Arizona, it is important that you understand the terms of the loan and the red flags to avoid so that you don’t end up overpaying for your loan or getting scammed altogether.

Any legitimate lender is going to be will if not actually eager to disclose all of the loan terms upfront. This is simply a way for the lender to know that you are serious and to avoid wasting his or her time on a borrower who can’t afford the terms of the loan or one who is not willing to pay the fees for the loan. If you run across a lender who will not provide you with a complete list of terms and all costs in writing, then you should quickly find a new lending resource. A lender who is not willing to provide this information is likely to have hidden fees and a hidden agenda when it comes to your loan.

For a very similar reason, if your lender is not willing to provide you with a complete copy of your documentation prior to signing the agreement, then there are almost certainly hidden fees or terms included that will work against you. Loans To Flip Houses in Arizona are complex documents and unless you are familiar with the terminology and the legal ramifications of the loan documents, then you need to have a legal professional review the contract before you sign it.

Less Than Helpful Lenders

Any lender who is not responsive or who is difficult to contact during the application process is very likely going to act in the same manner after you sign the loan agreement. If you feel that you are not getting the customer service that you deserve, it is better to end the process and begin to work with a different lender who better meets your needs.

Follow Your Gut

Selecting a lender who will provide you with Loans To Flip Houses in Arizona is a big decision. If at any time during the process, you begin to feel uneasy, pressured or ignored by a potential lender, then you need to sever the relationship. Ideally, you will find a lender and continue to work with him or her for many years to come and on many deals. So be sure that you find one who is reliable, professional and above all, one who is honest and clearly has the integrity that you desire in a business partner. Invest the time in selecting a good lender and you will undoubtedly save yourself money over the course of your real estate investing career.

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

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.

How to Make Money with an Arizona Airbnb

For some time it was difficult to run an Airbnb in the state of Arizona. However, thanks to Governor Doug Ducey, and the Arizona state lawmakers, residents of Arizona have a new possibility for financial growth.

Arizona lawmakers were worried about residents buying up property and turning the “house next door” into a hotel. Fortunately, for real estate investors the new laws were passed early last year and there are no limits to the number of properties that an investor can buy; add to that— there are no days that the home cannot be rented out. This means an investor can buy numerous homes on a street and potentially make the entire street Airbnb.

When it comes to potential income for Phoenix residents—the sky is the limit. Phoenix hosts MLB Spring training, Waste Management Phoenix Open, Barrett Jackson—add to that being the home of four professional sports teams and a division one college. That being said, Phoenix has thousands upon thousands of visitors each year.

HOW TO BECOME AN ARIZONA AIRBNB OWNER

1. Understand Rental Arbitrage— When the potential for profit is significantly higher than what it cost you to obtain that is called opportunity. Rental Arbitrage is when your achievable daily rental rate is obviously much greater than your actual daily rental cost. Every city will have this and it is important you do your homework for your market.

2. Be Realistic About Your Investment In Time—Unfortunately, you don’t just buy a property, list it and the money starts pouring in. This is business that will take some time to build. The key is in your reviews.

3. Find A Property—It is important to find property near places tourists would want to live. In Arizona a superb property would be in Sedona. If you are in Phoenix look towards Westgate— where the Cardinals are located, North Scottsdale, Old Town or Tempe. Make sure you research the annual events that will bring your customers to you.

REGULATIONS OF AIRBNB LOANS

The financing is always the tricky part when it comes to investing in an Airbnb. Although, it can be difficult finding funding for your Arizona Airbnb it is possible. Banks are watching carefully how properties are being used when it comes to approving new mortgages and refinancing existing ones. Mortgages that operate as rentals are riskier investments for banks than primary residence. The bank needs to feel confident that during times of vacancy the owner will be able to pay the mortgage.

A Arizona Hard Money Loan is a loan backed by the borrower’s assets versus their credit and monthly income. Arizona Hard Money Loans are easily approved sometimes within minutes—the borrower will have an approval usually within 24 hours and typically have their funds within two weeks. The borrower must have documents proving the value of their assets and that they are the legal owners. Arizona Hard Money Loans are short term loans usually ranging from one to five years. After the loan terms are up usually, they can be transitioned to a mortgage through a traditional bank.

If an Airbnb is something you have been interested in, find a property and make an appointment with a local hard money lender to get you on your way to financial freedom.

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

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.

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.