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

Friday, February 15, 2019

If You Can Read This Post, You Can Get A Commercial Real Estate Loan

Both buying and renovating commercial real estate is the mark of a giant step for your small business. However, it can be extremely stressful. It is imperative you completely understand the process—this will take a lot of stress off of you.

Very few small business owners have enough cash on hand to support any type of project with their own money—they will have to take out a loan. Fortunately, there are Arizona commercial real estate loans that can help make the project go much smoother.

There are many options when it comes to Arizona commercial real estate loans. The decision you make will affect the success of your project. Some options take much longer to close and some require a large amount of time spent of application and paperwork.

DIFFERENT TYPES OF ARIZONA COMMERCIAL REAL ESATE LOANS

What is commercial real estate? It is any type of property that is used for business purposes. Some examples are a shopping center, a movie theater or an office building. Actually, any building that uses 51% of the building for business can be considered commercial real estate.

Purchasing new or existing commercial real estate or rehabbing said property makes a borrower eligible for a commercial real estate loan. Commercial Real Estate Loans in Arizona can vary. There are multiple types of loans that vary in their application processes, rates, fees and loan terms.

The first loan that springs to mind for most borrowers is a traditional commercial real estate loan. These come from a bank or credit union. These loans generally fund the largest amounts of money at the smallest interest rate. However, these are very hard loans to get. Traditional Commercial Real Estate Loans in Arizona are generally given to businesses that have the best track record of profit and have the highest credit score. Even then, these loans are infamous for being painfully slow with tons of paperwork and documentation.

Hard money Commercial Real Estate Loans in Arizona are short-term loans from Texas Hard Money Lenders who are private investors. Private investors are not one size fits all. There are some who won’t give out amounts as large as a bank loan would—and others that can give out even more than a bank would. Texas Hard Money Lenders will charge a higher interest rate than a traditional lending institution. However, the payoff comes with the application process. These are much easier to qualify for than bank loans. Although, a hard money lender will look into your credit score—they will not base their decision simply on your credit score. These are loans backed by the property. Many startup businesses work with Texas Hard Money Lenders. You can typically apply for, be approved and receive funds in less than two weeks.

Real Estate Crowdfunding is a real estate loan platform. With crowdfunding many people lend small amounts of money to the business owner for their project. For example, instead of receiving a $100,000 loan from a bank or hard money lender you will receive many small loans that add up to $100,000. Real estate crowdfunding has similar terms as hard money lending does. However, you will be dealing with many people you have to pay back versus just one.

When it comes to Commercial Real Estate Loans in Arizona borrowers have many options.

Your options will depend on how long you have been in business, if you are startup business, what your credit score is and how much you can pay per month on your loan when it comes to deciding which real estate commercial loan will work for you.

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.

Eager to Open an Arizona Medical Marijuana Dispensary?

If you have driven down any major streets in Arizona, you have seen medical marijuana dispensaries. Thinking of opening a small business? A dispensary may be a great option. But, how do you get a loan for an Arizona medical marijuana dispensary?

Even though there are many states that have legalized both medical and recreational marijuana—it still isn’t considered “legal” by the federal government. What that means to entrepreneurs looking to open a dispensary is a traditional bank will likely not lend to a borrower for this purpose. And, in all reality, it may be a very long time until banks will be willing to lend to this industry. It is a very gray area when it comes to the Feds, the banks and the marijuana dispensary industry.

Even if the Feds approved of lending to dispensaries—banks still feel there are a lot of risks involved and not enough protection. The guidelines are so vague, making lending too risky, for the banks to conduct any marijuana related business.

WHO LENDS TO ARIZONA MEDICAL MARIJUANA DISPENSARIES?

Non-Traditional lending institutions are able to give loans to borrowers looking to open an Arizona marijuana dispensary. Every startup business needs funding to succeed in their market. If a borrower is looking to open a boutique or a restaurant they can simply get a Arizona small business loan from a bank, but because of the ambiguous legal issues when it comes to marijuana related business federal banks won’t participate in lending. The Federal Deposit Insurance Corporation (FDIC) will not insure a bank that takes on what they view as excessive risks—these would include loans that may be in violation of federal law. A non-traditional lending institution does not have to adhere to federal requirements as do traditional lending institutions.

Many private investors are backing medical marijuana businesses Private investors will typically require that a dispensary is incorporated, has a monthly gross sales of at least $8,000, has a business banking account and have a minimum credit score of 500. Private investors use the equity of the property as the collateral to secure the loan. If you live in a state, such as Colorado, there are a few banks that will work with a marijuana based business. However, in Arizona it is only legal for medical use and banks will not lend to marijuana dispensaries. Using a private investor in Arizona will allow a borrower to not only get a loan for the real estate, but also to purchase equipment necessary for a startup business.

Securing financing for a medical marijuana dispensary can be quite challenging, but the potential financial rewards are huge.

Marijuana based businesses are rapidly growing. If you are looking for a small business that there is a high demand for—a medical marijuana dispensary is well worth looking into. Get yourself an Arizona private investor that will work with you and help you achieve your dreams.

Thursday, February 14, 2019

Why Would I Need an Arizona Bridge Loan?

So, you’ve put your house up for sale and you’ve begun to look around for your new, upgraded home. In no time at all you have found your dream home but, there is one problem—you haven’t sold your house.

Most people can’t afford to pay two mortgages. This is where a Arizona bridge loan comes into play. When borrowers want to buy a new home before selling their initial investment a Arizona bridge loan can give you the money for a down payment on a new home before the sale of the old home is complete.

Unless, you have stashed away a big financial cushion chances are you don’t have the required down payment on your new home before you’ve received the funds from your old home’s sale. Sometimes, a seller will include a contingency in the home you are trying to buy. A contingency states that you won’t buy the new home until the sale of your old home. Unfortunately, in competitive real estate markets many sellers don’t want to deal with contingencies.

In a Arizona bridge loan your home is the security on the loan. A Arizona bridge loan is taken out from a hard money lender. Hard Money Loans in Arizona are asset-backed loans. You will pay origination fees and closing costs on the loan. After those fees and costs are paid you will have the money required to put down on the new home.

BENEFITS OF A BRIDGE LOAN

Bridge loans make it possible for borrowers to purchase the home they desire in a competitive real estate market. Sometimes, borrowers have to rent while they wait for the sale of their home to go through—that means they are, literally, throwing money away. If a borrower either doesn’t have the means to pay two mortgages or doesn’t have enough money for a down payment before the sale of their home closes, a Arizona bridge loan can provide them with the funds needed to purchase their new home while waiting on the sale of their old home to close.

Another benefit to a Arizona bridge loan is there is no contingency required. Sellers are more likely to want to work with you if they aren’t waiting on a contingency. This also gives buyers of your old home to have more time for inspections and finalizations.

Bridge loans are set up to be interest only loans, requiring a balloon payment at the end once you sell your old home. Many times, payments on bridge loans are deferred until a month or two after the borrower closes on the loans—giving you more time to handle the selling of your house with less financial stress.

A Arizona bridge loan is a fantastic way to get the funds you need to secure the down payment on your new home.

A Arizona bridge loan is a short-term term loan where the funds are used to bridge a financial gap. Bridge loans will help cover the cost of your down payment on your second home by using the equity you have as the collateral needed to secure the loan. After the sale of your home you simply pay back the hard money lender with the sale of your home.

How To Determine If Hard Money Will Work For You

Hard money loans are typically used by investors who need funding for an investment property quickly without the strict requirements of traditional mortgage lender financing. However, Hard Money Loans in Arizona can be used efficiently in other scenarios.

Essentially, hard money loans are short-term loans that provide financing to a borrower—these loans are secured by the borrower’s property. Texas Hard Money Lenders are private lenders. Because of this the hard money lender can be more flexible with their terms. Usually, these loans are right around a 12 month loan term. Typically, borrowers pursue Hard Money Loans in Arizona to finance their deal quickly or they want approval for a loan that wouldn’t be approved by a traditional lending institution.

Investors regularly use Hard Money Loans in Arizona for fix and flips. Banks will not approve fix and flip investments due to the risk they pose for repayment. A hard money lender will use the property as collateral and, in the case of default, they will repossess the property and sell it. A hard money loan can include not only the financing for the property, but can include the materials that will be required to refurbish the property. These loans are interest only loans throughout the life of the loan—the last payment is a balloon payment. Usually, within the 12 month period the borrower has renovated and sold the property—this allows the repayment of the loan and a profit for themselves. Texas Hard Money Lenders will work with a borrower when it comes to the term of the loan. A borrower may need more than 12 months— these loans are known to be extended out to three years and occasionally five years.

PROS AND CONS OF HARD MONEY LOANS

With a hard money loan the interest rate will be higher than a traditional mortgage. Many borrowers, when weighing the pros and cons of Hard Money Loans in Arizona, agree that the high interest rate is worth all the pros these loans give. Borrowers can be approved and receive funding in as little as a week to 10 days. This lightening fast process can secure property for investors that may easily lose properties due to the incredibly slow approval process of traditional banks. Texas Hard Money Lenders will also approve loans that traditional lending institutions will not. An example of this is a cannabis marijuana dispensary loan.

Many borrowers are not approved because of poor credit. Lenders want to know they will be paid back. Banks use a borrower’s credit score and income to asses risk of default. If a borrower has a clean credit report and makes enough income to meet the debt-to-income ratio they have a better chance of approval. However, Texas Hard Money Lenders look at assets— they base their decision on the value of the property. Usually, a borrower can receive a loan for 70% of the purchase price—however, many times 90%-100% of the purchase price can be financed.

Hard Money Loans in Arizona are often referred to as bridge loans. These loans bridge the borrower from an unconventional loan to a conventional loan. These loans can give the borrower time to clean up their credit, time to sell their property, time to handle whatever they need to handle in order to have convert to a traditional mortgage.

Yes, Hard Money Loans in Arizona have higher interest rates than conventional loans. Researching this subject thoroughly has shown that the high interest rate is truly the only negative that can be found.

And the truth of the matter is—a hard money lender is taking a large risk with these types of investments. Whether it is a single home property being fix and flipped or a construction loan being taken out for a house that hasn’t even been built yet. A hard money lender believes risk pays off. They believe and are involved in the investments they approve.

Commercial Real Estate Loans Made Simple

Commercial real estate loans are typically used to purchase or renovate an owner-occupied commercial property.

Income-producing property is called commercial real estate and is used for business versus residential. Malls, retail shops, hotels and office buildings are some examples of commercial real estate. The commercial real estate loan includes the financing of not only the property, but the development and construction of said property.

Commercial real estate loans can be financed through banks and private lending institutions. There are no FHA or VA programs when it comes to commercial lending—and there is also no private mortgage insurance. What this means to lenders is they have no insurance to cover default of the borrower.

Interest rates on Commercial Real Estate Loans in Arizona are higher than residential loans. And there are fees involved, such as loan origination, loan application and appraisal fees. Depending on the lender there can also be other fees involved—such as prepayment penalties and exit fees.

HARD MONEY COMMERCIAL REAL ESATE LOANS

A hard money loan is a non-traditional bank loan. Texas Hard Money Lenders are private investors that do not have to follow the strict requirements of conventional mortgages. A hard money loan is an asset-based loan and is secured completely by the property’s equity.

Waiting on approval from a bank can be painful and time consuming—and much of the time can take months to receive funding. Here steps in the hard money lender. A borrower can be approved and funded in less than 10 days on a hard money commercial real estate loan. These are short-term loans and are usually only set up to last between 6 months and one year. However, because of the flexibility of Hard Money Loans in Arizona, they can be extended up to five years.

A borrower’s credit is of great importance to a traditional lender. But, because hard money loans are based on the equity of your property they can look past dents in your credit. While closing time is insanely long with a traditional lender—due to documentation, inspections and waiting on the loan committee, a hard money loan can close quickly because typically there are only a few individuals involved in the loan terms and it is their money they are lending.

The bottom line is that hard money loans are set up to be bridge loans. Bridge loans are “bridging” you from a temporary situation into a permanent situation.

These loans are interest only loans until the end of the loan term, in which the balance is repaid. The goal is to give the borrower time to get their ducks in a row and bridge themselves into a conventional mortgage. Texas Hard Money Lenders are there when the bank says, “no.” They are there when you need money quick. They are there when your credit has some issues. Texas Hard Money Lenders are there when you need them.

Wednesday, February 13, 2019

Can You Get an Arizona Bridge Loan?

What exactly is a bridge loan? The definition of a bridge loan is “a sum of money lent to cover an interval between two transactions, typically the buying of one house and the selling of another.”

Basically, what this breaks down to is if you don’t have enough income to cover two mortgages at the same time, you can use a Arizona bridge loan to pay off your initial mortgage while you wait on the property to sell—all the while being able to purchase your new property. Bridge loans are short-term loans that borrowers can qualify for a mortgage on their new house before the Arizona bridge loan is paid off.

Bridge financing is a short-term method of financing that is interest-only. Typically, borrowers can receive their funds in less than one week—and very often within 48 hours of approval. It is a secured form of lending that is backed by property—meaning that if a borrower defaults on the loan their property can be repossessed by the investor. Bridge loans can be used for a variety of purposes that include both residential and commercial properties. A common Arizona bridge loan scenario is when the borrower is selling their primary residency, but has found a new home and the seller doesn’t want to wait on the sale of the initial home— a Arizona bridge loan can secure the sale. Also, many times borrowers need fast access to capital in order to obtain permission for a new development. Sometimes, a property is not inhabitable (typically, a fix-and-flip) and a traditional bank will not approve a mortgage.

Texas Hard Money Lenders will approve borrowers with poor credit for an Arizona bridge loan. Because these loans are asset-based a borrowers credit is not as important. These loans are interest-only until the end of the loan term—meaning a borrower only pays the interest throughout the life of the loan and at the end a balloon payment is required. In case of default the lender can repossess the property and sell it in order to get their money back.

WHY GET AN ARIZONA BRIDGE LOAN?

Unlike a traditional bank, a hard money lender does not require excellent credit. However, they will look at your credit score. Texas Hard Money Lenders use collateral to secure the loan. The collateral, which is your property, reverts to the hard money lender that if the borrower defaults the home will go into foreclosure.

Borrowers usually choose a Arizona bridge loan due to the ease of the application and the speed of financing. A borrower can be approved same day and funding can be released in less than a week. However, this convenience does have a cost—slightly higher interest rates. Most borrowers don’t mind this, as they are only short-term loans. Hard money loan terms are usually around one year, but can be extended up to five years.

Bridge loans are an excellent resort to a temporary situation.

When you are searching for a home and you find that perfect home—but you can’t buy it until you sell the home you already have—that can be heartbreaking. Especially, when the seller refuses to wait on the sale of your initial home. This is where a bridge loan can save the day—even with poor credit a hard money lender can help make your dreams come true!