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Thursday, April 4, 2019

Who are Texas Residential Hard Money Lenders?

Public lenders have high standards and requirements surrounding your financial history that can disqualify you from loans when you really need them. If this is the case for you, read more below to see how you can make the best of working with Texas private money lenders, so you can finance the property of your dreams.

Seeking out a loan provider can be exhausting, and the disappointment in rejections can make it easy to lose motivation. However, public lenders are not the only resources there are for loans. While your local bank or credit union may seem like an easy option, they are likely to reject people who do not have a solid credit score or a reasonable debt to income ratio. Because of this, many people are turning to private lenders.

Residential hard money lenders in Texas are private money lenders that offer speed, but, most importantly, they flexibility in their approval process, meaning they can approve more people than banks can. This means they can approve some borrowers who are being disqualified from public bank loans.

What are the benefits of Texas private money lenders?

The most obvious benefit of residential hard money lenders in Texas is the opportunity to be approved with less strict requirements than public lenders. Instead of considering your financial history as top priority, they considered the collateral the most important factor. The value and potential of the home is considered before the creditworthiness of the borrower is considered. Now, the creditworthiness of the borrower is still considered, however, it is not held as highly as the factors regarding the property. Texas private money lenders can offer a type of flexibility and transparency in this way, because they will be real with you about the potential of the property.

Are Texas private hard money lenders right for you?

While residential hard money lenders in Texas offer a lot to offer, it is important to know a few things that may not make them ideal for your particular loan needs. The first thing is that they have high interest rates, and they can be as much as five percent more than what is asked by other lenders on the market. Some people who need money fast can afford to lose a pretty penny, but, combined with the short repayment period, they may not be for everyone.

Particularly, lenders who offer hard money work great with builders and home renovators. Builders and renovators are usually working on a fast timeline and, with the goal to sell the property as soon as possible, with what is hopefully a significant profit, the short timeline literally lends itself to them. The high interest rates just end up being an extra cost that pays for the speed of the loan, which can be really important if they are bidding on a competitive property.

Private hard money lenders are not for everyone, and not all of them are reliable. If you choose to move forward with a private lender, be sure that you understand all the terms to the loan agreement and the terms fit your particular situation.

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.

How Helpful Are Residential Hard Money Lenders in Texas?

Obtaining traditional funding for a loan is determined by a variety of things: credit score, debt to income ratio, reliability, creditworthiness—the list goes on. If you are seeking funding for a loan, you should be aware of all possibilities including untraditional routes like residential hard money lenders in Texas.

Texas hard money lenders usually consist of private companies and investors. They are alternative options to people who cannot receive traditional funding by public lenders like banks and credit unions. Private lenders can offer money vast on a variety of different properties including, but not limited to, residential homes, apartments, and condos.

So, what’s the deal with Texas hard money lenders? And how can they help you?

What’s so Great About Private Lenders?

Residential hard money lenders in Texas offer a few attractive qualities that are unmet by most public lenders: speed, transparency and flexibility. These Texas private money lenders are able to do what banks cannot by beginning the loan process almost immediately. If they can’t get it started the day of, it’ll only take as long as 10 days while banks usually need between one and two months to get the process started.

Additionally, Texas private money lenders offer transparency and flexibility that banks do not. Private lenders focus on the property’s collateral. This means they evaluate the property’s value and potential, and how that affects the risk in investing. Banks, however, will consider the borrower’s creditworthiness first. This consists of analyzing the borrower’s financial history and seeing if it exceeds banks standards. Private lenders also consider creditworthiness. However, private lenders consider collateral first. So, they make great options for people with an imperfect credit score who are in need of financial funding fast.

Which Scenarios Are Best for Hard Money?

Hard money is not for everyone, and, before you jump right into any hard money agreement, there are definitely a few things you should consider first. Texas hard money lenders have high interest rates—and, sometimes, they can be as five percent more than a traditional or public lender. Some people can afford this, and some people don’t mind paying the extra costs if it guarantees speed. For example, architects and home renovators rely on speed if they are bidding on a particular property on a competitive market

Additionally, hard money works great for them because of the short repayment period. With the goal being to build, renovate and then put on the market for what is hopefully a quick sale, the short repayment process lends itself perfectly to builders and renovators. However, people seeking hard money for long term projects may not find it as easy to work it into their timeline. Still, hard money can be used for other things including preventing foreclosures or working on short timelines.

If you are interested in residential hard money lenders in Texas, do a search of private investors in your area. Being rejected by a public lender, or even by a private lender, doesn’t mean you won’t find funding from another investor. Be smart about your needs as a borrower so that you can make the decision that is best for you.

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.

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.