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

Tuesday, February 26, 2019

Top 10 Tips on Working with Arizona Private Money Lenders

Arizona private money lenders might seem confusing if you’re working with them for the first time. Learn how to navigate the money lending process with these tips.

If you’re new to the world of private lending, it can be helpful to know how to work well with Arizona private money lenders. In any industry, there are things that, when done, can help make proceedings go more smoothly. To make the lending process as easy as possible for you and your lender, we’ve put together our top 10 tips for working with Arizona private money lenders.

Our Top 10

1. Know your private lenders’ backgrounds.

It helps to go into your loan process knowing a little about who you’re dealing with. This can help you start conversations and build strong relationships with your lenders. Good relationships with them can work in your favor when it comes to future loans.

2. Research their company.

Make sure you’re working with a reliable company. Their company website and online reviews should tell you a lot.

3. Know the type of loan you want.

Oftentimes, hard money lenders will offer various loan types. It will help them if you have an idea of the loan type you’re looking for, whether it be a cannabis business loan, commercial property loan, or fix and flip loan, for example.

4. Go in with an ideal rate.

Think about the ideal rate you’d like on your loan, or even a range of rates that would work for you. Having this in mind going in will help you better negotiate with your lender.

5. Have a payment plan in mind.

If you have any payment constraints or desires, map them out before discussing them with your lender. Knowing what you need in a payment plan and communicating that to your private lender will help them help you.

6. Know the ins and outs of your property.

This is a big one. Know the property you want to purchase like the back of your hand and bring information about it with you to your lender if you can. The better you know your property, the better you will be able to determine the amount of money you need to borrow.

7. Know what exactly you will be doing with the money.

Going along with knowing your property, try to know as much as you can about what you’ll need the loan for. This clarity and detail will build trust between you and your lender.

8. Keep up a dialogue with your private lenders.

Lenders want to know that you will pay them back. You can assure them of this by effectively communicating about payments and problems.

9. Treat your Arizona private money lenders kindly.

They’re helping you out, and you will be working with them for likely a long time as you pay back your loan. Treat them well and make sure they know they’re appreciated.

10. Recommend your lenders to others.

Businesspeople love more business! Recommending your private lenders to others will not go unnoticed.

Follow these tips to ensure a smooth lending process.

Your private lenders will be thankful for effort you put into communication with them. Build strong relationships with your lenders and it will help you in the long run.

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 Work at Home by Taking Out Arizona Hard Money Loans

Getting Arizona hard money loans to help you invest in real estate can really pay off. Investing wisely will get you on the path to being the best work-from-home landlord on the block.

It seems like everyone wants to work from home, and for good reason. You can make money without leaving your living room or getting out of your pajamas. It almost sounds too good to be true, but it’s actually a goal within reach.

Investing in properties by taking out Arizona hard money loans can make you a decent salary, and you can work toward managing it all from home. While you’ll have to put in work outside your home to get your business started, property investment can be a work-from-home job if you want to make it one. You just have to put in the initial effort.

The Process of Real Estate Investing

The first step is to explore your options. Rental properties, commercial properties, and fix and flip properties are all great real estate investments. One may be more worth your time than another depending on your area and the real estate market, so be sure to do your research and see which investment plan fits your lifestyle and environment.

Once you’ve decided which kind or kinds of properties you’d like to invest in, it’s time to make it happen. We’d recommend starting with one property to test the waters and give you a better idea of how to run an investment property. To find good deals on property, scour real estate websites and sit in on property auctions. You’re looking for a low-priced property in a good neighborhood. You can fix up a property, but you can’t change its location.

The Arizona hard money loans you need will depend on the property you’re interested in. If your property already has a building on it, you may want an investment loan or a fix and flip loan. These loans will help you pay for the property and fix it up if needed. If you want a lot or piece of land on which to build your property, you may need an investment loan and a construction loan to help you purchase the property and then build on it.

The great thing about buying an investment property with Arizona hard money loans is that the property will pay for itself over time. Whether you’re flipping a home or renting it out, the money it brings in will help you pay back your loan. Then, once your loan is completely paid off, the rest is money in your pocket.

Flipped homes typically bring in $30,000 in profit each. Rental homes and commercial properties will likely bring in more overall, as you’ll be getting payments from your tenants each month. Depending on how long you keep the property, you could earn way over $30,000. That will depend on your rent and your area’s real estate market.

After you’ve had one experience with property investing, if you like it, you can take out more Arizona hard money loans to finance future purchases. By the time you have a few investment properties, you can manage them from home and only visit them when they need repairs. Plan strategically and that life could be yours.

Choose Level 4 Funding to finance your real estate dreams.

Level 4 Funding is a trusted hard money lender based in Phoenix, AZ and has funded over $40,000,000 in projects. You could be next! Apply for your loan online now and get your results faster than you would at a bank.

How Much Do You Know About Hard Money Lenders?

Arizona hard money lenders are great options for loans, but not everyone knows that much about them. Private lending is pretty simple and can save you time and money compared to banks.

You should know that there are more options for your loans than just banks. Arizona hard money lenders can get you money quickly and easily without having to deal with banks’ complicated application processes. Private lending has several advantages over bank lending and is available all over.

If you’re looking for more information about private money lenders, check out some of these facts to become more familiar with the process.

Did you know that…

You don’t need flawless credit to get a loan from a hard money lender?

Hard money loans are equity-based, while bank loans are based more on your financial history. Therefore, money lenders typically place more emphasis on your collateral and less on your credit. If you have poor credit and can’t get a loan from a bank, you might be able to get one from a hard money lender.

Arizona hard money lenders offer a variety of loan types?

Private lenders lend money to support various business endeavors, including cannabis, real estate, and others. Bridge loans, fix and flip loans, investment loans, and commercial loans are some of the most common real estate loans.

You can apply for a hard money loan in less than ten minutes?

Like banks, some Arizona hard money lenders have online loan applications. Level 4 Funding’s loan application is just a few easy questions, and they’re likely to get back to you about your application faster than banks. Hard money loans are typically used to get money fast. If that’s what you’re looking for, consider applying.

Some private lenders can get you 100 LTV financing?

With Arizona hard money lenders, you have the possibility for 100 LTV financing in some cases, something banks cannot always offer. Part of what makes money lenders so helpful is their ability to work with you on an individual basis to develop a loan plan that works for you. Your rate and your payment plan can both be discussed with your lender to make sure they will fit your lifestyle.

Taking out a loan now could help your financial future?

People make millions investing in real estate, and you could, too. You can purchase your first investment property with a hard money loan, pay it back in no time, and be on your way to financial success.

Consider a hard money lender for your next loan.

Arizona hard money lenders make loans easy, from application to final payment. Their ability to work with you throughout your loan process cannot be matched and is helpful for many borrowers.

Monday, February 25, 2019

Bridge Loans: The Help That's Right for You?

Bridge loans allow investors and developers the opportunity get their unrealized projects off the drawing board and into reality. These loans allow investors to take advantage of opportunities when funding is unavailable, for reasons of bad credit, speculative projects, or if the investment property is in poor condition or suffering due to low occupancy.

Bridge financing acts as a bridge between a properties initial purchase and its eventual refinancing or resale. If a borrowers financial profile doesn't meet the bank's criteria, they'll face consistent denial. Loan officers might shudder at a project that seems particularly speculative, say demolishing a building to make way for a new development or if a property suffers under low occupancy or poor condition, in these cases conventional lenders are not going to risk getting involved.

The Benefits of Bridge Loans really shine in situations like the following

• Bad Credit: Say a developer took a hit on their last project. Work got stalled, and all at once his lender called his loan, and let us assume he defaulted. Now the site sits vacant, and his financial situation prevents him from getting another loan. He approaches a bridge lender and says "I only have a little work left here I just need a bit more money," after receiving bridge financing work on his development finishes, the banks are well pleased with all the extra income he's earning. Finally, he's able to refinance to a long-term mortgage, which pays off his bridge loan and allows him to enjoy a steady stream of income from his shiny new development.

• Speculation: Our developer sees a derelict factory in a blighted industrial area, where the local university will be building their new campus. Our developer is pretty convinced he can develop low-cost apartments in place of the factory and make a boatload. But the bank considers the area, and says no, as they can't see his vision. With bridge financing, our developer can build his apartments. They quickly reach almost full occupancy after the new campus opens allowing our developer to sell off the new complex, paying off his loan and earning him a tidy profit.

• Neglected property: An unscrupulous landlord has been nickel and diming his tenants for years, disgruntled renters have been steadily moving out, and the landlord seeing the apartments as being more trouble than their worth, puts the property on the market. Our buyer is convinced that with a few improvements and more reasonable management the property can quickly turn to full occupancy. But the bank considers the current state of the property and denies him his loan. With the help of bridge lender, our buyer manages to purchase the property, makes a few small improvements and under his patient care, the complex achieves near 90 percent occupancy. Just a few necessary improvements, and a little competence on his part and our investor can refinance, allowing him to earn a generous income from the once god-forsaken apartment complex.

In short, bridge loans can help your dreams come true

Without the help of bridge financing, none of the developers mentioned above would have ever seen their projects move. Bridge lenders are willing to speculate on a properties potential, looking beyond a borrower's poor financial situation, a projects seemingly speculative nature or a properties derelict condition.

Loans for Flipping Houses: Why You Should Avoid the Bank

Many are enticed to get into the flipping business, either by reality television or the prospect of tidy profits. But few people just getting into the business have cash in their pocket to buy and remodel a house on their own, and most need financing. If you are new to the flipping business, learn why banks and every other financing method out there is less than ideal in the case of fix and flip loans.

Someone new to the flipping business might leverage the equity in their home, refinancing their personal residence to embark on their first flipping project. Is putting your actual house on the line to flip another house a good idea? I'll leave that for you to decide.

Another strategy is to take out a small conventional loan to purchase the house, and then take out an unsecured loan to cover the cost of remodeling. This strategy is basically like getting a credit card to pay for your flipping project, and paying bills with a credit card is never a sound financial strategy. So why not just go to your friendly neighborhood bank?

A conventional loan will always fall short when it comes to fix and flip loans

Many novice real estate investors are lured to banks by the prospect of lower interest rates, but conventional lenders fall short in almost every respect the case of flips. First, the tedious application process could cause you to miss out on the best investment opportunities, as foreclosures and short sales move quickly and traditional lenders simply can't keep up. If the property you have in mind is anything less than livable condition, your application will be denied outright. But, there's a bigger reason to avoid going to the bank to finance flips

Without exception, even if a bank miraculously finances your flip, the loan will not cover the cost of your renovations. Ever. Banks give loans as a percentage of a property’s current value. Your bank loan might cover 90 percent of a $50,000 shack and this loan will get you that shack but nothing more. If you want to remodel the home thereafter, you will need to take out another loan.

So home equity, unsecured loans, and even banks fall short when it comes to financing flips, but not all hope is lost.

Hard money loans remain the best way to finance house flips

A cursory search of the term “hard money” might make you balk at the double-digit interest rates offered by these lenders. Understand that those double-digit interest payments don't amount to much as your plan should be to sell the property within a few months.

What sets hard money apart in the case of flips is that these loans are given as a percentage of the property’s value after it's been repaired. Unlike a bank loan, a hard money loan can not only can you get enough money to purchase a distressed home, but you also get the money you need to improve it.

This factor sets hard money apart from other types of financing, be it bank loans, unsecured loans or equity loans. Home equity loans put your house at risk, unsecured loans are expensive, and bank loans will not cover the full cost of a flipping project. If you want to get into the flipping business, your best bet is and likely always will be hard money.

Construction Loans: The Benefits of Short to Permanent Financing

Construction loans are a confusing issue, a Frankenstein of sorts among real estate financing, as they usually come in the form of two loans in one. The first covers the cost of construction while the other loan is a long-term, conventional-type mortgage. You risk less when you have refinancing built as part of your loan package.

Let us call the ideal form of construction financing "short to perm."

You have the option to get a loan that purely covers the cost of construction, but a short to perm loan with refinancing is better. Many articles on the internet cite vague, if not trivial benefits in the case of short to perm loans. Some of these benefits include you only need to pay closing costs once, which results in lower loan fees. Some talk up the fact that with refinancing built into your loan package your interest rate is locked in.

These are all nice benefits when it comes to short to perm loans. But it's safe to say loan fees are a minor expense in the context of a construction project. Also if you think about it, how likely are interest rates going to go up drastically throughout a 6-month construction project? Barring an economic meltdown, it is unlikely that this is going to happen.

The real advantage of having refinancing built into your loan package is that it protects you from risk should your project face an unexpected disaster, after construction finishes.

Singular construction loans may cover the cost of construction, but what if things don't go quite according to plan?

Say a developer gets a single short-term construction loan. He aims to construct a post-modern apartment building complete with a pool a gym, a sauna, and all sorts of other yuppie amenities. The initial monthly rent offered is pretty high as a result of all these features. After construction ends, potential tenants fret over the $2,000 initial rent, but this is the absolute lowest rent he can offer to break even and maintain all those shiny amenities.

Before his loan comes due his beautiful apartment complex lingers at roughly 15 percent occupancy, and bank after bank denies him the opportunity to refinance for this reason. The initial lender who financed his construction calls his loan, and he'll have to pay the full balance himself, and we can only hope this didn't ruin him.

Risk less in the case of construction loans by having refinancing worked out ahead of time

If our developer had refinancing worked into his initial loan, his project would still suffer as a result of low occupancy, and yes he'd still have a loan to pay. But by securing refinancing ahead of time, he would have time to maneuver and secure more tenants. Instead, he had to make a massive balloon payment to pay off his construction loan, without much in the way of additional money coming in.

In short, the main benefit of a short-term construction loan with refinancing built is that it assures you that you'll be covered if things don't work out according to plan.