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

Sunday, February 17, 2019

Help Your Capital Needs with Commercial Hard Money Loans

Investors use hard money when an opportunity arises and they need to jump on it quickly before someone else grabs it or when they need to bridge a gap between where they are right now and where they want to go.

Hard Money Loans in Arizona can be referred to as many things— one such thing being a bridge loan. They are called this because in essence they are bridging an investor from one opportunity into another. These are the same type of loans that investors take out when they are flipping homes or commercial real estate—such as a mall or an office building.

When you apply for a traditional loan at a bank they generally look at the last three years of your businesses financing to see if there is enough collateral and cash flow to satisfy their lending requirements. When these requirements are not met or when a business has not existed long enough this will result in non-approval of the loan. This is why there are Texas Hard Money Lenders.

COMMERCIAL HARD MONEY LOANS OPEN UP OPPORTUNITY FOR BUSINESSES

When a bank turns down a borrower for either not being established long enough or has insufficient cash flow a borrower can turn to a hard money lender. These business owners can use hard money. This is money that is used to transform a business to where it needs to be in order to obtain traditional financing.

Hard Money Loans in Arizona are short-term, interest-only loans that typically have loan terms from six months to three years. The terms are short because these loans are intended to only be a short-term fix. Once the business owner has the capital to bring their business up to par, they can secure long-term financing.

A good example of when hard money lending may be useful is when an investor wants to purchase an office complex that is vacant and needs to be rehabbed. Because there is no income being generated from this property a bank will not approve the loan. However, a commercial hard money lender will approve the loan and use property as collateral to secure the loan.

A hard money lender can explain many different hard money scenarios that can work for an investor’s unique situation.

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.

Your Dreams Can Come True with Private Money Lending for Your Small Business

Unfortunately, a small business can’t prosper without funding. Funding can come from many sources—such as family, friends and loans.

If you are fortunate enough your friends and family will have enough cash on reserve to help you grow your business. However, the reality is most of us do not know many people that can just toss us thousands of dollars to invest in our small business.

A business owner can take out a Arizona small business loan from the bank. However, banks require stellar credit and enough monthly income for them to feel secure loaning money to a business— and let’s not forget the agonizing process of a bank loan. A business owner can easily wait months for approval and funding from a bank.

WHERE CAN YOU GET A QUICK SMALL BUSINESS LOAN

Private investors provide small business owners loans with capital to get their project off the ground. These investors can make a huge difference in the success of a business. There are clear benefits of working with a private investor—the main benefit being the quick access to capital. Private funding serves small businesses that may not qualify for bank loans.

Capital is the most important factor of a small business—it is what makes or breaks a small business. Bottom line is a business cannot grow without money. It can be difficult for small business to obtain approval for a bank loan and without private lending many businesses could struggle to grow or even to keep their doors open.

Small business owners with poor credit or new small businesses have a great opportunity for obtaining a small business loan with private investors.

Private investors are a good alternative to traditional bank loans. Most banks are weary about lending to new businesses and frown upon business lenders with poor credit. Private investors are also referred to as Texas Hard Money Lenders. These investors will use the business owner’s commercial real estate as collateral for the loan. The property is used to secure the loan and protection in case the borrower defaults on the loan. This is great news for business owners that do not qualify for a traditional bank loan. The loan you receive is almost completely determined by the collateral that is offered to the hard money lender. Because private money, or hard money, loans are not available through the bank, you will need to find a local hard money lender. If you are a small business owner in need of financing, please contact us at level4funding.com.

Saturday, February 16, 2019

How You Can Buy a New Home Before Selling Your Old One

Sam and Judy had just put their home, of 20 years, up for sale. As, people do, when they are selling their home, they began looking for a new home. Luckily, or so they thought, they found the ideal house only a few days after putting their house up for sale.

When Sam and Judy found the home, they wanted to purchase they were so excited. Their realtor said it shouldn’t be a problem for them to put an offer in because they could put a contingency in the contract. However, that served to be a great problem.

The house Sam and Judy had decided on was a popular one. It was a steal of a deal and had more than one offer in on it. Unfortunately, the seller felt a contingency wasn’t necessary due to the fact that there were cash buyers putting offers in on the home. Sam and Judy lost that home and were feeling a bit concerned. The home they were selling had repairs that were necessary, and their realtor had warned it may be on the market longer than they were hoping.

WHAT YOU CAN DO WHEN YOU CAN’T COMPETE WITH CASH BUYERS

When a seller doesn’t want a contingency in the deal a smart move is a Arizona bridge loan. A bridge loan, as the name suggests, offers a bridge that allows a buyer to purchase a new property by using the home they currently own as collateral.

A Arizona bridge loan is also known as a “gap financing.” They are there for home owners who want to purchase a new home before selling the home they are currently in. Unless you have a large nest egg of cash, most people cannot buy a new home before selling the old one—and in a competitive market most sellers frown upon a contingency. It is very difficult to qualify for two mortgages at one time let alone pay on two mortgages.

This is where a bridge loan can be a buyer’s saving grace. A bridge loan can come from a hard money lender. A hard money lender will loan the money to you and usually give you a few months before a payment is due. Once due, the monthly payments are interest only payments. When the old home sells, the borrower will pay the loan in full in what is called a balloon payment. This allows the borrower to purchase their new home and have time to sell their old home without carrying two mortgages. Once the old home sells, the buyer has money to pay off the loan and pocket the rest of the cash as profit.

Typically, a hard money lender will finance up to 80% of the combined value of both the new home and old home. The other 20% or so usually comes from home equity or savings for the new down payment. There are lenders that will lend more than 80% but be prepared to have the other 20% handy.

Bridge loans can be a life saver for borrowers wanting to purchase their new home without waiting on the old one to sell.

Bridge loans take a shorter time to process than a conventional mortgage. Typically, these loans are approved, and funds are released in two weeks or less. These loans will have a slightly higher interest rate than loans from a traditional lending institution, however, remember you will only be paying interest on the loan until the last payment—the balloon payment.

What to Expect with Hard Money Loans

Hard money loans are funded by individual investors when traditional lending institutions can not approve a borrower for what they need or a borrower needs quick financing.

A typical hard money loan will run between 7% and 15% in interest rates and cost anywhere from 4 to 7 points. Points are an upfront fee of the loan amount. Hard Money Loans in Arizona are short-term loans that generally run between six months and three years.

If you took out a loan with a bank for $1,000,000 you would be paying back approximately $6,000 per month—that is including interest. With a hard money loan you would be paying back approximately $8,700 a month. This is due to the higher interest rate of a hard money loan.

Many people will read this and think, why in the world would I take out a hard money loan if it is less expensive to take a loan from a traditional lending institution. Well, let’s take that $1,000,000 we were discussing above. If an investor finds a commercial property that is being sold for $1,000,000— but there is nothing there except empty rooms, however the investor has a clear vision of what they can do with that building. What do they typically do? They go to their bank. Well, because there is presently no income being generated the bank is most likely not going to approve any amount of loan. So, what does an investor do if they don’t have $1,000,000 laying around. They find a hard money lender.

WHY WOULD A HARD MONEY LENDER INVEST IN MY PROJECT?

Hard money investors are investors that choose to invest money into real estate rather than traditional investing such as stocks and bonds. They do this because they make money much faster than waiting around for the ebbs and flows of the stock market.

Texas Hard Money Lenders have money and they want to invest in a project they feel will be profitable for them, as well as you. And this is where they make their money. The borrower will present their project, and show that they will contribute anything they are able to contribute to the project—whether that be money down, showing ways to cut corners or having an active role in the project themselves—such as pouring their blood, sweat and tears into the project. The hard money lender is able to approve the loan within minutes and distribute the funds within days, unlike banks.

Where Texas Hard Money Lenders make their money is through points and interest—just like a bank. However, a borrower pays for the convince of quick loan approval and funding of properties that banks will not fund through a higher interest rate.

Although hard money loans cost more initially, it will gives the quick funding required and allows you to prosper in the future.

It is important that when you take a hard money loan out you have a clear and realistic vision of your investment. Make sure that when you meet with your hard money lender you have a crystal clear business plan that you believe in—your hard money lender can’t believe in an investment if you don’t.

How to Find a Hard Money Lender in Texas

Read this article to find a hard money lender in Texas and learn how to make sure your loan gets funded.

When it comes to Texas Hard Money Lenders, many people don’t really know what they are. They have been stereotyped as loan sharks trying to take your money, but in reality this couldn’t be more false. Texas Hard Money Lenders are simply private investors that want to work with you and make money with you.

Finding a hard money lender can sometimes be difficult—especially because Texas Hard Money Lenders vary just as much as borrowers vary. Stay away from anyone trying to make money off of you buy selling you a list of Texas Hard Money Lenders. It is simple—google: hard money lender in Texas. Yes, it’s that simple.

HOW TO GET TEXAS HARD MONEY LENDERS TO FUND YOUR DEAL

First, make sure you have a deal. When you speak to a hard money lender they can’t approve funds for a property that isn’t there. If you aren’t sure if a deal is good enough for a hard money lender to invest in there are resources on the web that can give you that information.

Once you find a property, make sure that you are organized. There are steps to be taken when trying to obtain funding for your deal—be professional. Create a presentation that includes pictures, a business plan, your experience and goals and prepare a document with all the expenses that will be necessary.

Texas Hard Money Lenders want to see that you are willing to take as much of a risk as they are. Although, lenders may finance 100% of the deal, be prepared to put some type of a down payment. If you don’t have the money to do this yourself come to the table with some potential ideas where that money could come from. Maybe a silent investor or a partner would be willing to help with the down payment. If you can’t think of anyone that could help fund the down payment, maybe you will be the one to do the repairs yourself. Therefore, the cost of hiring someone can be deducted from the original loan amount— be creative and think outside the box. Lenders just want to see that you are willing to work hard and you have passion about your project.

Make sure that you communicate with your lender. If they ask for a document—make sure you are on top of it and that document is sent asap. If they call, answer the phone or call them back the minute you can. Don’t put them off. Be responsible and make sure your lender is comfortable with you and trusts you—remember this is their money they are risking. Make sure you follow through with your project as planned. This will help you when you need to take out another loan.

Texas Hard Money Lenders are individuals that are literally loaning you their own money.

Texas Hard Money Lenders need to see that you are professional, organized and have some skin in the game. Finding a hard money lender that you work well with is priceless—meaning you can make deal after deal after deal and have an investor that will fund you—which in turn means making a whole lot of money.

Friday, February 15, 2019

5 Reasons to Use a Texas Hard Money Lender

Texas Hard Money Lenders can be a real estate investor’s best friend. They offer speed and flexibility on top of a plethora of other benefits.

1. You Don’t Have To Have Perfect Credit— If you fall into the majority of borrowers you have a ding or two (or several) on your FICO score. When it comes to traditional loans, the most important factor a bank looks at is that three digit score. If your score falls below their required number—no loan for you! Not only your credit score, but your monthly income is of just as much importance to them. If you fall outside of their criteria, you will not be approved. Texas Hard Money Lenders focus primarily on the value of the property that serves as the collateral on the loan. As long as the lender is comfortable with the loan-to-value ratio they are not overly concerned with a borrower’s credit score and income.

2. Quick Loan Approval and Funding— If you have ever applied for any type of loan at a bank you are familiar with the painfully slow process. There are countless documents that must be filled out and even once that is done the underwriting process is almost sloth like. It can be a month before a borrower is even approved and even longer to receive the funds. By this time, it is highly likely the borrower has lost the property to another real estate investor. The application process for a hard money loan is simple. Typically, a borrower only needs to fill out a standard loan application—and can be approved in minutes. Usually, the borrower can receive funds in 10 days or less.

3. Getting Financing For Additional Loans— Most banks cap the amount of loans a borrower can take out at four. It usually doesn’t matter how great their credit is or how much money they generate. Because Texas Hard Money Lenders are private investors they make their own rules. They do not have the same limitations on loans as do banks. Their main concern is the borrower’s equity in a property. Texas Hard Money Lenders enjoy working with investors that have multiple properties because the borrower can cross-collateralize their properties.

4. Making The Investor’s Offer Strong— Seasoned real estate investors are very familiar with banks pulling the financing during escrow—it is not uncommon. This can easily destroy the deal and the investor will lose the potential property. When an offer comes in from an investor using hard money sellers see this as a benefit. Texas Hard Money Lenders are not known to pull out of deals at the last minute. What that means is that an investor that is working with a Dallas Texas hard money lender in a competitive market is seen as preferential to the seller when there are multiple offers on the property.

5. Quick Close— Sellers want to close quickly—this is why cash buyers are a sellers dream buyer. Good news! Investors using hard money are viewed in the same light as cash buyers. Real estate investors can often negotiate a lower purchase prices because they can give a shorter escrow period and all that equals a quicker close.

There are numerous reasons for a real estate investor to work with a Dallas Texas hard money lender.

An experienced hard money lender is an expert in real estate investments and will work with an investor to make sure there are no issues that could hurt the project. At Level 4 Funding we have years of experience and are here to work with you. Please contact us at level4funding.com.