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Wednesday, April 3, 2019

How to Use Hard Money for Texas Fix and Flip Loans

Jumping into the real estate business can be difficult—high risks can accompany seemingly easy decisions, and consequences can easily put you in the red instead of a rising line of profit. Read more below to see how hard money can help with the costs of your fixer upper.

The first thing most people will tell you when you’re about to renovate a home is to be smart. Doing your research and investing in a reliable team will be important so that you don’t end up in a hole of debt. Any money lender will want to know that you have solid plans and a property with potential. The last thing you want is for the home to cost you more than you can afford in finances, and accumulating interest and debt from your loan lenders.

Most of the time, people turn to their bank when seeking out loans. What a lot of people don’t know is that reliable Texas private money lenders literally “lend” themselves to cases of fixer uppers in their natural loan lending process.

What Texas private money lenders Offer that Public Lenders Don’t

In doing your research, you may find that private investors focus on the property’s value when approving borrowers. While your financial history is important, it isn’t held as highly as what they think the possible consequences of the property’s value are. If you approach a public lender, like your local bank or credit union, they will focus on your financial history. This includes things like your credit score and debt to income ratio.

If you are denied by a bank it is still possible to be approved by a local private investor for your Texas fix and flip loans. As long as your private Texas hard money lenders believe in you and your plans, it is likely they will give you the stamp of approval. Being approved by a private lender will allow you to begin the loan lending process almost immediately—as soon as the day of, in some cases. This is really attractive to borrowers who are bidding on a competitive market and want to begin fixing and flipping right away.

Costs of Using Texas private money lenders for your Texas fix and flip loans

Texas hard money lenders are great options if you need transparency, flexibility, and speed. However, it is important to know the very literal costs of borrowing hard money. First are the high interest rates, which can be as high as five percent more than traditional lenders. Second are the short repayment periods. Now, the short repayment period is actually something that lends itself well to fixed and flipped homes. Quick renovations and a successful sale are key to being able to repay your loans without stress. But, if you encounter a lot of unforeseen problems with the already high interest rates, Texas hard money lenders may not be for you. Though, they generally do work well with those looking to make a profit renovating homes, they are very pricey compared to other options.

Hard money is a great option for people looking to fund their Texas fix and flip loans that overall offer transparency, flexibility and speed, but may not be right for everyone. If you are still unsure if borrowing from a private lender is right for you, consider working with a real estate attorney to go over the terms of the loan agreement so that you can feel confident in your decision to proceed or look down another route.

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 and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Tuesday, April 2, 2019

When You Should Turn to Texas Private Money Lenders

Obtaining a loan isn’t easy. Lack of decent credit score and a reasonable debt to income ratio is what turns many people from traditional public lenders to private alternative options.

Being denied a loan can be the cause of many things. It could be an unstable financial history, or unreliability as a lender. It could be unstable plans or an architect who is unable to meet deadlines. It could also be lack of experience and risk of failure if the loan is for something like a fixer upper. Being denied for a loan doesn’t mean you should stop looking—it just means you should look other places.

Oftentimes, loans can be combined with one another. Or, as we reside in the age of technology, you can receive investors from crowdfunding websites. Other ways could be untraditional, like loans from friends and family, but all work. Turning to a Texas private money lender is another option, but private lenders offer both positives and negatives based on your situation.

Reasons to Turn to Private Lenders

Texas private money lenders are companies or individuals who invest in properties, usually using hard money. They approve candidates who wish to borrow based on the property’s value, potential, and chances for success. If your plans are solid and you have a reliable team, there is still a possibly to be approved by a private lender, even if you have been rejected by a public one and have less than perfect credit.

Another reason private lenders can be good to work with is because of their transparency. They will be honest with you if they do not like the project, and will be able to work with you a little bit more than public lenders like banks. For instance, they are known to work with lenders if they need loan extensions. These extensions can be anywhere from one to five years. With the ability to work more individually than public lenders, they can be a great option when seeking out a loan. However, private Texas hard money lenders have high costs that should be considered before jumping right in to a loan agreement.

Doing What’s Best for You

Hard money is a great option because it is fast, and the lenders who offer it can maintain some form of flexibility. However, their attractive qualities are countered by high interest rates and a short loan repayment period. In some cases, like those of fixer uppers, a short loan repayment period makes sense, and is usually preferred. Confidence in the repayment plan is essential because failure to meet deadlines could result in dastardly situations that would make it even more difficult to obtain another loan in the future.

If the cost of Texas private money lenders is too high, there are always other options or—other private lenders. Just because one private lender doesn’t work out, it doesn’t mean another won’t as well. As long as you understand the terms you are agreeing to, working with private Texas hard money lenders is common, and is often the solution many go to when seeking out a loan. If you are still unsure, or if your particular loan need isn’t something to be accomplished in such a short time frame, it’s always possible to hire a real estate attorney to look over the terms of the loan with you. Having a professional in the field can give you the confidence you need so you know that when you accept or reject a Texas hard money lender, you know you’re doing what’s best for you.

How Texas Hard Money Lenders Can Help You with Fixer Uppers

Fixing and flipping homes has become so common in popular media that there are a number of various shows dedicated to every variety of fixer upper, inspiring viewers to seek out easy ways to fix and flip their own properties for a profit. Read more below to find out what opportunities you can find with Texas private money lenders.

Chip and Joanna Gaines are one TV couple that has taken the world by storm, and have even evolved into their own brand. Watching the show, it’s easy to become inspired to seek out local properties with potential for profit. If you’re someone who doesn’t come from readily available wealth, like those running a highly rated and successful reality series, you can turn to Texas hard money lenders to help fund your project.

Private lenders that offer hard money do a few things differently than banks and other public lenders. With the ability to approve a variety of borrowers, as well as offer speed and flexibility, lenders that offer hard money are a great option for ordinary people looking to fix and flip.

How Hard Money “Lends” Itself to Fixer Uppers

Oftentimes, the ability to fix and flip relies on a market with available properties—and if the market is limited, with few properties with high potential value, the ability to compete on the market is essential. This is what makes Texas hard money lenders so attractive.

Unlike traditional lenders, private lenders who offer hard money are usually able to begin the loan lending process immediately—literally as soon as the day of, which is not something public lenders can accomplish. Public lenders can take as long as a month or more to begin the loan lending process which, if bidding on a competitive market, could be the difference between obtaining your dream property and having to start from scratch all over again.

Hard money is also lending itself to fixer uppers in terms of the repayment period. A short repayment period falls in line with the timeframe of fixer upper, given that it is renovated without any major problems and sells fast. Though, if the property isn’t selling on an ideal timeframe, it’s possible to work individually with your lender and work out an extension. It isn’t unheard of and part of what private lenders offer. Their tendency to focus on the value of the property as an investment compared to the borrower’s

How to Know if Private Lenders Are Right for You

While private lenders have a variety of attractive characteristics that make them great options in situations of fixer uppers, they are not for everyone. Because of their ability to work faster, they have much steeper interest rates—and they can be as high as 5% more than other lenders on the market. Experienced house flippers may be able to handle the extra costs.

However, considering how the higher rates will factor into the repayment period will be essential. Having a strong financial background is not always necessary when working with Texas hard money lenders, but it may be necessary to those flipping for the first time. After all, as much as we all would like to follow in the steps of Chip and Joanna, we all start somewhere, and just because hard money is a solution for some, it isn’t one for all.

How Texas Bridge Loans Can Help Surprise Your Significant Other and Make for an Easy Move

Read Jim and Jenna’s story below to find out how to “bridge the gap” between homes so that you can move into your dream house without having to find an alternative, transitionary moving space in between it all.

Jim was in love with his long-time girlfriend Jenna and wanted to surprise her with their dream home. They’d already committed to living together long-term, but their current home was causing them all kinds of problems: dripping sink, outdated tile, unreliable air conditioner. And, the fire alarm had yet to alert them of one too many pitas that had been forgotten in the oven.

It was time to move.

Jim wanted to surprise Jenna with a new home, while also easing the moving process. As he was looking over his options, he found himself looking away from contracts and contingencies that he had to sell his current home first. He soon came across Texas bridge loans and found that they didn’t have contingencies and allowed prospective homebuyers to find their dream home, and then work to sell their current.

This would help Jim surprise Jenna. If he didn’t have to work around any stipulations that he had to sell his current home first, he could invest all of his energy in finding the perfect home—and the perfect engagement.

How to “Bridge the Gap”

“Bridging the gap” would require Jim to use the down payment on his current home to be used as a loan for his next home. Doing this would mean paying two mortgages and paying interest that was two percent higher than the general market. It wasn’t cheap, but Jim wanted to take a risk. Taking the risk give Jim the freedom he desperately wanted for both his home search and proposal planning. There was a little bit of pressure for Jim to fix the problems with his current home immediately, so that it would increase its ability to sell on the market. While it could mean extra costs, Jim had a few personal connections that wouldn’t cause a huge dent in the budget. He couldn’t wait.

Success and Eligibility

Texas bridge loans require that the borrower have a solid financial history. Fortunately for Jim, he had a great credit score and great debt to income ratio. He was thankful he was able to be approved so easily, because he knew it certainly wasn’t the case for everyone. And while he could afford two down payments, it wasn’t a decision he made easily. He figured that surprising Jenna as they moved forward into the next steps of their lives would be worth it. With the help of his personal connections, he was able to fix the problems in the current house—right under Jenna’s nose. She had no idea he was home searching until he found the perfect two-story with a rose garden and white picket fence. He proposed under a trellis in the backyard, and proposed they move in immediately. Jenna said yes.

Monday, April 1, 2019

Risk Taking with Texas Hard Money Lenders

When seeking out loan options, you’ll have to make some tough decisions based on your financial circumstances and the potential of the properties you wish to acquire. A lot of times, these decisions will center on whether or not you’re a risk taker.

If you get turned down by a public lender, like a bank or credit union, the end is not nigh. Oftentimes, when someone is turned down by a traditional lender, they are referred to private lenders who offer hard money.

Texas hard money lenders are able to approve a greater number of people for loans because they focus on the property’s investment value when approving loans. They are still known to deny borrowers, however, with strong plans and a property with potential, they can be great resources to help you with your dream property.

The Risks You Need to Know About Private Money

Texas hard money lenders are unlike public lenders because of the flexibility they offer. With the ability to approve borrowers and begin the process as soon as the day of, private lenders are very attractive. However, it is important to consider the costs of Texas private money lenders. Their interest rates are higher than public lenders and they require a short repayment period. A short repayment period is something that works well with something like a fixer upper, but it is not ideal in all situations.

Not all Texas private money lenders are reliable, either. Doing research is important, because the last thing you want is to be moving forward with your plans, only to have your lender pull the rug out from under you at the last minute. You also want to ensure that the terms to the loan agreement are agreeable. It sounds obvious, but unreliable and predatory lenders have a habit of hiding fees within the loan agreement. This is where a real estate attorney could come in. Having a pair of experienced eyes evaluate the loan and its value to you in your situation would be beneficial so that you can go into the loan agreement with confidence.

Finding Success and Making the Decision That’s Right for You

Choosing to work with a Texas hard money lender is a great option if you don’t qualify for a loan by a traditional lender. Working with untraditional lenders doesn’t always mean the process will be easy—and if it comes easy, it doesn’t mean it comes without risk. Choosing to move forward with hard money is just one option. If you aren’t willing to take a risk, and it’s not something that is necessary, you will have to consider other options.

Another thing to consider is that just because it doesn’t work out with one private lender, doesn’t mean it won’t work out with another. Staying focused and determined will be essential in your quest for a loan lender, and it’s something you probably had to utilize when you first began your property search. Moving forward despite some wrong turns will be essential if you want to obtain your dream property.

Working with Texas Fix and Flip loans Like an HGTV Star

The stars of HGTV and the dazzling production quality of their shows may make it seem like any one can fix and flip a home and make a profit—but what kind of steps would an ordinary person take without the razzle dazzle of the cameras and production crew?

Chip and Joanna Gaines. The Property Brothers. Christina and Tarek El Moussa. All of these partners have worked their way to success flipping and fixing homes. Not all homes reap profit, but if the vast majority didn’t, there wouldn’t be a show.

So what do you do if you don’t have a mass amount of wealth from your successful show that would otherwise allow you to purchase and bid on competitive properties?

How Hard Money Literally “Lends” Itself to Fixer Uppers

When an ordinary person doesn’t qualify for a loan from a traditional lender, like a bank or a credit union, they are usually referred to an untraditional, alternative money lender. What most people don’t know is that untraditional lenders that offer hard money are often the best options for those who need Texas fix and flip loans. Texas hard money lenders offer cash fast, so it is ideal for someone looking to grab a property off a competitive market. Additionally, they have a short repayment period, which works well for someone who wants to make a quick profit off a fixer upper, rather than a profit off a long term rental property.

How to Know What Texas Fix and Flip Loans Are Right for You

While hard money is a great option for someone looking to fix and flip, there are some important things to consider. The short repayment period does lend itself to the fix and flip process, however, coupled with the high interest rates of private lenders, it may not be the most realistic option for everyone. Still, reliable private lenders offer something else: a transparent relationship. Because they offer flexibility and therefore a more individualized relationship with their buyers, there is the possibility of adding a short extension to the repayment period. If hard money isn’t the right option for you, other loan options are available.

Depending on the needs of the property, you may be able to obtain a loan from a bank or utilize crowdfunding sources. Personal loans can be combined with other loan types, and may be used in combination with the loan from a friend or family who wish to invest in you and your property.

Whatever you choose to do, obtaining Texas fix and flip loans is not impossible. It may not be as glamourous or as easy as the TV suggests, but there are a variety of resources that can often be used in tandem with one another—and if you’re feeling unsure, it’s always possible to invest in a real estate attorney to help analyze your options or loan agreements, so you feel confident that you are making the decision that is best for you.