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Wednesday, April 3, 2019

Horror Stories of Texas Hard Money Loans

Many people turn to Texas private money lenders who offer hard money when they cannot obtain funding from their local bank or public lender. While there are reliable private lenders out there, it’s important to know what to watch out for so you don’t find yourself in even greater need of financial assistance than you were before.

Hard money is an option for people looking for money fast. Maybe they need the speed that banks don’t offer, needing to start a project literally the day they get approved of the loan, or they are bidding for a property on a competitive market. Whatever the reason is, Texas hard money loans have plenty of attractive qualities that make it seem like a great option to the ordinary borrower. However, before you agree to just any terms of hard money, there are a few things to consider.

When Hard Money is more Horrifying than Helpful

The first major thing to consider when evaluating the potential of Texas hard money loans is the high interest rates. Investors that offer hard money can offer speed, but it comes with a cost. The price of hard money can sometimes be as high as five percent more than that of public lenders. Someone on a budget may not be able to afford the interest of hard money. However, many people like builders and those working on fixer uppers find the price worth it if they are able to get the money fast.

Additionally, they find that the short repayment period works well with the timeline of building and renovating. If you need hard money for something other than home building or flipping, Texas hard money loans are something you should heavily consider. The last thing you want is to be unable to pay for the loans and have a completely new financial issue to worry about.

Following Your Dreams Down the Path That’s Right for You

Private investors can be great options, but they are definitely not for everyone. Just because they can approve more people than the average bank doesn’t mean those approved borrowers are being smart with their money.

Each situation is different, and you have to evaluate the needs of yours first. There are lots of different Texas hard money lenders out there, and if you choose to move forward with hard money you don’t have to accept the first lender you come across. Look for reliable lenders you want to work with who believe in you and your project.

If you need help, you can always hire a real estate attorney who can help evaluate the terms of loan agreements with you so that you can move forward confidently. Otherwise, break down your needs, budget, and timeline and use them to help you make major decisions. If hard money is not for you, don’t give up. There are lots of other loan options you can consider, based on your needs.

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.

Can You Really Be Approved for Texas Hard Money Loans if you have Rotten Credit?

Obtaining a loan can be a difficult process if you don’t understand all of your options. If you haven’t explored the potential of private lenders, read more below to see what kind of things that offer that public money lenders don’t.

Joe and Sue were looking to fix and flip a home, but they had limited experience and an imperfect credit score. However, Joe’s experience in business school and Sue’s experience as a designer made them great candidates for successfully flipping a home. Still, their local banks wouldn’t approve their plans.

Joe and Sue began to look elsewhere, and soon found that private lenders could offer loans to people with rotten credit, and they could offer the money fast.

What are the Benefits of Working with a Private Loan Lender?

Joe and Sue research local Texas hard money lenders, and soon found a reliable private investor to meet with. They brought their plans for the home, which included blueprints, timelines, budgets and references of the small team they would be working with on the renovations.

Their private lender, Dan, loved it, noting that the risks for failure were low. Because Dan focused on the property’s potential, instead of Joe and Sue’s financial history, he was able to approve them for their Texas hard money loans. Needless to say, Joe and Sue were ecstatic and Dan was able to get that process going the very day.

Joe and Sue were shocked they hadn’t considered Texas hard money lenders sooner because of the flexibility, transparency and speed they offered. Fortunately for Joe and Sue, they put in the research to find a reliable Texas hard money lender.

What are the Possible Consequences of Working with Private Investors?

When seeking out private Texas hard money lenders, it is essential to find a reliable one. Sometimes it’s good to have a real estate attorney look over the terms of the loan agreement so that you don’t overlook any hidden and predatory fees. Other times, it just takes a little extra research to see the history of clients your lender has had. Knowing what kinds of projects and clients your lender has had success with in the past is also a good indication if they are a good candidate for your project.

Joe and Sue didn’t hire a real estate attorney to help them in their process, but because they took their time looking over the terms of the loan and asking questions, they were able to find solid ground with their lender. In some unfortunate cases with Texas hard money loans, investors have pulled out last minute. A lot of the time, the first thing people think of when borrowing money is their reliability as a borrower—but it is essential to consider your lender’s reliability. You never know what fees or stipulations they may be trying to hide in their agreements, or what they may do at the last minute—like suddenly pull out of the contract.

If you are seeking Texas hard money loans, take your time and don’t give up. There are lenders out there who may be invested in you and your project; you just have to find them.

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.

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.