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

Monday, March 11, 2019

The More You Know: Secrets of Arizona Private Money Lenders

Here are some insider tips for getting to know the Private money lending in Arizona industry and how it can help you in your business endeavors.

Private money lending in Arizona can seem intimidating if you are not familiar with the process and how it is different than traditional lending institutions. There are a few key things to know to be successful in obtaining a private money loan and we are here to tell you those things! Whether you want to buy an investment home, a commercial property, or start an Airbnb business, we are here to help you through the Private money lending in Arizona process and want to make it as easy as possible.

Be prepared!

One of the best ways to go into a Private money lending in Arizona institution feeling confident is to have a thorough, well-organized loan pitch. You’ll need to include information on what you need the money for and why. Are you starting a cannabis business? Have a detailed business plan ready. Are you buying a commercial property to generate monthly income from tenants? Explain that in a carefully crafted loan scenario.

The more information you can bring to us in order to help us better understand your financial goals, the easier it is for us to make a swift decision on your loan approval.

Find the Arizona Private Money Lender for you!

Not all Private money lending in Arizona institutions are the same. Although the idea behind private/hard money lending is easier approval and less qualifications with credit, there may be different payback terms. Arizona Private Money Lenders may also have specializations for what types of loans they prefer to fund. You can do your research online and set up an appointment with a couple different Arizona Private Money Lenders to get to know them and find the right one for your monetary goals.

Get ready to apply!

Once you’ve chosen your Private money lending in Arizona institution it’s time to request an application. You’ll need to provide detailed information about the property for which you’re applying for funding, as well as your own finances including equity. This is where having your business plan or loan scenario will come in handy. Any Arizona Private Money Lender will want to know your plans for the property.

This information should help you feel comfortable approaching Private money lending in Arizona for your first time. If you’d like to speak to an expert to learn more, give us a call and we can make sure you’re well taken care of for your first private money loan.

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.

Sunday, March 10, 2019

Why the Mighty Arizona Bridge Loan is Making a Comeback in 2019

An Arizona Bridge Loan is a type of short-term funding used in real estate. Thanks to market changes and consumer demand, it’s making a big comeback.

There’s a lot of misinformation on the net about what an Arizona Bridge Loan is and how it works; so much so that oftentimes investors don’t know if and when it’s appropriate to leverage one. This form of lending works well when someone is trying to bridge a gap in funding for a short period of time. They often have 6-month or 12-month terms, though some lenders offer terms of five years or more. Usually, the borrower only pays interest during the term, and then pays off the balance when the term ends, and funding is quick—much quicker than other forms of lending like mortgages, which can take three months of more. It’s often believed that you have to have excellent credit to qualify. This is true some of the time, particularly if you’re working with a bank, but alternative lenders routinely work with people who don’t have good credit.

There are many situations in which this form of lending could be beneficial. For example, a real estate investor might use it to make an initial purchase because he knows he’ll get funded quickly, so he can grab a deal before someone else does. In this case, he’ll likely refinance the property or resell it within a matter of months. An investor might also use one if he’s purchasing a multi-family property, but plans to bring on a more investors. Private homeowners sometimes use them as well, especially when they want to move into a new home while they’re waiting on their old home to sell. Using this financial tool, they can pay off their prior mortgage and possibly make a down payment on the new place with one.

With so many uses and benefits, one might wonder why they fell out of popularity. In reality, they never really did with investors. However, private individuals struggled with them during the early 2000s, around the time of the housing collapse. People were using them to get into new homes. The problem was, when the market started collapsing, their old homes stopped selling. The homeowners would wind up with two homes and loans they couldn’t afford, and so these loans fell out of popularity in the consumer market.

Due to Market Shifts, Potential Pitfalls are Declining and Security is Increasing

The housing market has obviously recovered and there are now even housing shortages in some areas. That means opting for an Arizona Bridge Loan is a safer option for private homeowners than it once was because their old home will likely sell much faster. Because of this, more people are leveraging this form of funding; both in the private and commercial sectors.

If you’re on the verge of securing a great deal, alternative lending can help you have a great year too.

Start with the mindset of an investor when dealing with any kind of financial product. Good investors have a solid exit strategy and contingency plans. They get into an investment only after research, but also prepare for issues like not being able to refinance or not having a new buyer for a property. This in mind, you can secure an Arizona Bridge Loan that will help overcome your short-term funding gaps and make this year your strongest yet.

How to Find Commercial Texas Hard Money Lenders That Are the Real Deal

There are lots of commercial Texas Hard Money Lenders, but not all can become real contributors to your success. Learn how to evaluate your options, so you can get funded fast and have a great experience.

Step 1: Watch the language. Finding people who promise you the sun, moon, and stars? That’s a warning sign. Yes, you can get funded even if you have rotten credit and you can get a substantial sum too, but if the company is veering from industry standards by promising you all the money you need with no down and interest rates well below average, they’re probably wasting your time.

Step 2: Do some research. Find out what the company’s track record is like and if they have a strong history of helping people like you. They may be great to work with, but if they don’t typically have involvement in your industry, it’s going to be harder to get funded.

Step 3: Find out the terms in advance. If you’re working with a reputable company, chances are they’ll have lots of information on their website about the process and what they offer. Look for pages that give overviews about the types of projects they fund and the rates they offer. Beware of barren websites. Commercial Texas Hard Money Lenders that are well-established and have created a successful businesses will have sites packed with information that make it easy to understand what you’re getting into before you reach out to them directly.

Know the Differences Between Industry Standards and Fluff

Chances are, you will have to put some skin in the game. Anywhere between 50-90% LTV is considered standard. That means you can expect to receive funds equal to somewhere between 50% and 90% of the asset you’re leveraging. In other words, if you’re purchasing real estate valued at $100,000, you won’t get more than $90,000. Some commercial Texas Hard Money Lenders use ARV, which is “after repair value.” If this figure is used, expect the percentage available to be much lower. It’s also worth noting that one of the key benefits of working with alternative lenders is that they can lend a helping hand when bank financing is not an option, but no company can help every single person who applies. Some simply don’t have sound strategies or haven’t evaluated the risks and profit margins well enough. Don’t buy into the hype if a company says they can help everyone. They can’t, and if they did, they’d be out of business fast.

A good lending team is there when you need them.

When commercial Texas Hard Money Lenders care about you, they value your time and work diligently. You should expect prompt responses, answers to your questions, and people who are more than willing to see that you get the best rates possible for your situation. They will help you identify issues with your approach and will find ways to assist, even if you have rotten credit or haven’t been in business for long.

Why New Investors Fail with Commercial Texas Hard Money Lenders (And How to Make Sure You're Not One of Them)

Historically, commercial Texas Hard Money Lenders have been the go-to funding sources for those in real estate investing. Newcomers to the field sometimes struggle to get a plan off the ground due to funding shortfalls, but if you understand why they fail, you’ll avoid the same errors.

If you’re doing your homework, you’ll probably see lots of people asking about commercial Texas Hard Money Lenders who will fund 100% of a project. This is a newcomer error. Asking for 100% is asking someone to assume total risk for your project, and that rarely happens, even if you’ve got loads of experience and already have already earned serious money for the people who fund your deals. If you’re short on cash and just getting started, focus on purchasing a property for less than what it’s worth. That will give you more wiggle room with the budget and funding.

Another big mistake is not working with experienced professionals. As a newcomer, it’s tough to know what everything will cost, what permits will be needed, what the property value is now, and how much you can safely increase it without making it overpriced for the neighborhood. Plus, there’s always a chance you’ll overlook some kind of damage that can tank your budget and set you behind schedule. Always build up your team first. Not only will it make you more successful, but you’ll look like a more appealing borrower too. Consider people at every phase of the plan, from contractors through appraisers and brokers.

Lastly, many fail to find a niche. You can’t be an expert on everything, nor can your funding team. Find an area you really enjoy working in, such as single-family homes, multi-family properties, distressed properties, historic homes, and so forth. Become the expert in that area. Again, it will make you more successful and will help you network, which is essential when you’re searching for new projects or need help with one. This is also looked upon favorably in the lending niche, particularly if you can pair up with a lending team that shares your affinity.

Focus on Creating a Win-Win Solution for Everyone

One other tactic to try is to put yourself in the mindset of commercial Texas Hard Money Lenders. Look at yourself and your plans with a very critical eye. Try to poke holes in your own plan. Are the profit margins too small? Is the budget or timeline too tight? Is the neighborhood you’re considering less in demand than others? Is the team involved lacking in experience? Once you’ve made a list of all potential issues, find ways to overcome them, so your deal is a win-win for everyone involved.

Work with an experienced broker who can help you find the right funding with the best terms.

On a final note, you’ll have greater success with commercial Texas Hard Money Lenders when you work with an experienced broker. A seasoned broker will listen to your plans and help you polish them up before getting you matched up with someone who is excited to fund your deal and finding the best possible terms, so you start your project off ahead of the curve.

Saturday, March 9, 2019

5 Types of Commercial Real Estate Loans in Arizona You'll See in 2019

Many types of Commercial Real Estate Loans in Arizona will be in play this year. Become familiar with the most prominent, so you can pick the right type of funding for your needs.

1. SBA 7(a)- Backed by the Small Business Administration, the SBA 7(a) can work for people with good credit, that have been in business for at least a couple years, and who want to pay off their balances over an extended period of time, similar to what one might do with a mortgage on a home. There is a requirement that the business owner must occupy the business more than half the time. These are capped off at $5,000,000 and are only available to specific business types which fall below certain income limits. It typically takes 60-90 days to get funded if you make it through the approval process.

2. SBA 504- Divided into two separate loans, with the SBA providing 40% and a Certified Development Company (CDC) contributing 50%, there is no maximum funding limit. However, they do work similarly to the SBA 7(a) in that you’ll need a good credit score, will have to have had years in business, and it can take three months to get funded if you’re approved. There is an owner-occupied requirement for SBA 504 options too.

3. Traditional Mortgage- Offered by lending institutions like banks and not backed by the government, traditional mortgages tend to offer better terms than the SBA options, but also have more stringent requirements for credit. They can work well for those who are well-established, will occupy the business more than half the time, and plan to repay their debt over a period of 5-30 years. It usually takes 30-45 days for those who get approved to be funded.

4. Bridge- Designed to help businesses compete with cash buyers, bridges are special Commercial Real Estate Loans in Arizona that fund quickly, usually within 15-45 days, and are short in duration. A typical term could be anywhere from 6-36 months. That said, these are typically only available to those who have completed at least one other similar project and good credit is required for those applying with traditional lending institutions, but you can get them through alternative lenders too.

5. Hard Money- Similar to a bridge, hard money terms usually last a matter of months or a few years, and it’s generally awarded to those with at least some experience. However, a key difference is that it’s offered by alternative lenders, and as such, people can get funded in a matter of days, and most of the time, there is no owner-occupied requirement.

Learn the Differences to Decide What Form of Lending is Right for You

If you’ve got good credit and plan to pay off your balance over a period of many years, going with a traditional mortgage or an SBA option is likely to be the most affordable way to borrow. That being said, many people don’t meet the criteria for these Commercial Real Estate Loans in Arizona and sometimes they’re not suited to the purpose.

Hard money or a bridge may be best if you have rotten credit or need to purchase quickly.

If the banks say, “No,” because you’ve got rotten credit, won’t primarily occupy the space, or for other reasons, bridges and hard money are probably your best bet. They’re also the ideal Commercial Real Estate Loans in Arizona if you need to act quickly to grab your property before someone else does or in order to negotiate better pricing.

Can You Get Commercial Real Estate Loans in Arizona with No Down Payment?

Getting Commercial Real Estate Loans in Arizona with no down payment can mean the difference between having cash to operate and leaving the doors locked. If you’re trying to obtain 100% financing, hard money could be the answer you’re looking for.

Most Commercial Real Estate Loans in Arizona have strict requirements, including starting with some serious skin in the game. At a bare minimum, you should expect to put 10% down, but more often than not, banks are looking for 20-30%. That can be completely unreasonable for a start-up and is a major barrier for many entrepreneurs.

Adding to this, businesses are put through immense amounts of scrutiny by banks. They’ll check your credit scores, profit and loss, cashflows, and more, all to determine whether you’re a safe bet or not. Even those with the best of credit get denied, simply because they haven’t been in business long enough or because they aren’t making a large enough down payment.

The good news is, the rules shift in your favor when you look beyond bank options. Alternative financing sources like Texas Hard Money Lenders help small-business owners every day and can fund 100% of your property purchase.

LTV is Key to Eligibility

Whereas banks are concerned with how you look as a borrower, Texas Hard Money Lenders are more concerned with what you plan to do with the cash you get. The property you purchase is typically used to secure the funding. This is where LTV comes in. It means “loan to value,” and references how much money you’re borrowing versus the value of your business property when Commercial Real Estate Loans in Arizona are concerned. In other words, let’s say you want to purchase a building, such as an office, warehouse, or rental property, and it’s worth $100,000, but you need the full $100,000 to buy it. Do the math: 100,000 / 100,000 = 1 or 100%. Your LTV is 100%. But, you’re a savvy businessperson and you’re not going to pay $100,000. You negotiate down to $90,000 for the sale or maybe you’re really great and get it down to $80,000. Your LTV is now 90% or 80%. You just made yourself an appealing borrower to a hard money lender.

If you can do basic math, you can get 100% funding for your venture.

Yes, Texas Hard Money Lenders still care whether you can piece together a business plan. They want to know that you’ll be able to pay off the balance within the allotted amount of time. That said, it’s easy to get Commercial Real Estate Loans in Arizona if your LTV is realistic, even if you don’t have a whole lot of your own money to work with or have crummy credit. This is precisely why this method of financing is hugely popular with people who do fix-and-flips and fix-and-holds. With the surge in Airbnb rentals, many are using the model to start their own home businesses too. If it works for them, it will work for you.