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

Tuesday, April 9, 2019

Rental Property Loans: Advice for the Self-Employed

Banks don't like to give Texas rental property loans to people with irregular incomes. So if your self-employed, you might think there is no way to buy into rental properties, but you'd be mistaken.

Because you can always use hard money, but if you do a google search for this term you might end up thinking to yourself, "so they don't care about how much money I make, and they charge over ten percent in interest, it sounds like a scam."

But hard money is a legitimate way to finance short term real-estate purchases. The high-interest incentives you to pay these loans back quickly, so hard money is often used to flip houses.

But what if you want to hold onto a property for a long time?

Using hard money as a source of rental property loans benefits the self-employed and those in unique income situations.

Say there is a freelance graphic designer. Every three months or so he earns a significant commission on his long term projects. Every month paying his bills remains a careful balancing act, but he manages.

Renting out a house seems like the perfect way for him to earn a steady income. He scouts out a cozy little two-story house in a comfortable suburban development.

Given his excellent credit score, getting a mortgage shouldn't be a problem right? Well, bank after bank denies his application, because on a monthly basis, he's not making enough to pay his bills. Nevertheless, he can pay his bills, so what gives?

It's just that on a month to month basis, his debt to income ratio doesn't meet the banks' standards.

He looks on real-estate investment forums about situations like his, and he hears about hard money. The initial terms scare him, to say the least, 10 percent interest, over 12 months with a balloon payment due at the end. Yikes, but just before he closes the tab he reads:

"You can use hard money to refinance to a conventional loan." Knowing there's a way out, he bites the bullet. Hard money financing allows him to buy the house, and he even has a little money left over to bring his rental into the 21st century.

The attractive interior attracts a long term tenant who is just so pleased with the condition of the home that they agree to sign a 24-month lease.

Once he's got a long term tenant under contract, he goes back to the bank and applies for refinancing. The contractually obligated monthly rental payments will cover the cost of the new mortgage, on a monthly basis, and so, at last, the bank is happy.

In fact, that little bit of rehab work he did boosted the property’s value. So refinancing allowed him to pay off his initial loan and covered those steep interest payments, which he was so afraid of in the beginning.

Don't overlook the benefits of hard money when it comes to rental property loans. It may be expensive at first, but you can always refinance later.

Hard money remains an excellent option if you'd like to earn a steady income from rental properties. No matter what your current income situation is, don't let the bank stand in your way and keep you from getting into the rental business.

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

The Benefit of Purchasing Rentals with Texas Hard Money Loans

Most in the real-estate investment game consider Texas Hard Money Loans to be best suited for house flips, but what about long term rentals? Why would you want to use hard money to buy a rental property? Since hard money is supposed to be paid off in a handful of months, it’s easy to assume this type of financing isn't meant for long term investments.

But hard money allows you to finance distressed properties based on their worth after their repaired. With hard money you can pay nothing for your next rental using a simple strategy: buy a distressed property, raise its value, rent it out and then refinance the property at the new higher value.

How you can use Texas Hard Money Loans to pay nothing for your next rental property

Using hard money if you can raise a property’s value enough through repairs, then refinancing will allow you to pay off your initial loan and maybe even earn a profit.

It might be helpful to illustrate how such a strategy would work with some specific numbers:

Say there is a disused house going for $70,000. Getting the property up to a livable standard will cost about $15,000. The first step is to take out a hard money mortgage for $85,000. After a few months of repair work, and after finding a long term renter, you are ready to refinance.

If your rehab raised the value of the rental property enough, refinancing should pay off your initial loan.

Here’s how the numbers work in this case:

Cost of the Property = $70,000 Purchase + $15,000 in rehab

Say you refinance at 80 percent of your rentals new appraised value of 125 K=

100 in refinancing - 85 K + interest payments= You secured a long term rental without spending any of your own money.

Here’s a simple formula:

• Hard Money= Purchase price + Rehab

followed by

• amount in refinancing - hard money= a free property

With Texas Hard Money Loans, if you can refinance for a large enough amount you could pay nothing for your next rental property.

You might wonder if you can use another less expensive type of loan to execute the above strategy. The key to this method lies in buying a distressed property at a steep discount, then refinancing the property at a higher value.

Other lenders and banks in particular don't offer financing for distressed properties and even if they did in the above case you’d likely only get 80 percent toward the initial purchase of that 70 thousand dollar shack, so in the end you would have to pay 29 thousand dollars out of pocket.

With hard money you can buy dilapidated rentals, boost their value and then refinance so that in the end you pay nothing out of pocket. Not spending any money, getting a steady source of income, now that’s the dream isn’t it?

So consider using hard money to buy your next rental investment.

Monday, April 8, 2019

Reality TV is Not Reality: Some Advice on Texas Fix and Flip Loans

Nielsen ratings rank HGTV as the second most watched cable network on TV. These well-produced shows might make flipping look like a path to easy profits. But, take out Texas Fix and Flip Loans with reality TV in mind and your first flip will likely be a flop.

Producers on these shows know that the majority of their audience only cares about design and decoration, but flipping is about investing and not designing. If you want to get into the flipping business, you can't ignore these facts:

• It takes time to find the right deal.

• Financing is limited and carefully structured.

• If a house doesn’t sell in time, it could be a disaster.

HGTV programs devote about three minutes to finding a property to flip and the conversation usually goes as follows:

"Hey, babe. Found a great place, in that neighborhood."

Usually his better half is in some distant office, with a laptop in front of her. She gives a cursory glance to some comps. “Well that's great! We could make this much," she says off-hand.

Then they close, while counting out the cost of repairs on fewer than five fingers. Their biggest obstacle seems to be choosing that perfect white subway tile for the kitchen.

Texas Fix and Flip Loans are given out in draws, so unexpected expenses can put your entire project in danger.

After the happy couples on these shows walk into a perfect deal, money never seems to be a big concern. They seem to have hundreds of thousands of dollars stashed under their mattresses.

About 10 minutes into the program, an issue will invariably pop up that will require an additional outlay of thousands more dollars. Somehow, this is no big deal.

"Hey, babe, there’s some insert problem here, and it is going to cost X amount of money to fix it." To which their better half will invariably will reply, "Oh really? Well, that sucks, but I guess we have to do it. Alright, well, spend the money."

Texas Fix and Flip Loans entail balloon payments, so there’s a lot at stake house doesn’t sell in time

The last five minutes or so of these programs are full of wide-eyed buyers, ogling the impressive rehab work, and then: "We got an offer! Here’s how much we made," and then the credits roll. All usually turns out right for the smiling couples on these programs.

If these programs more closely followed reality they might look something like this:

• Five minutes consisting of months of time-lapsed footage with the frustrated flippers groaning and grunting, bitterly sipping coffee whilst clicking through the online listings. Because, in reality finding the right deal takes time.

• Five minutes consisting of actual rehab work, and when that unexpected issue pops up, there'd be a lot more at stake. Fix and flip financing is based on draws. You get a certain amount of money each month, and if you go over budget on a given month, you might not have enough money to finish your project. So we'd have another five minutes with the couple on the phone asking their lender for some extra money that month.

• Another 5 minutes devoted to selling the house, but once again there'd be a lot more at stake. Financing flips usually entails paying back the entire loan balance after a few months. If the house doesn't sell in short order, you will have to pay back the entire loan out of pocket, and who has a couple hundred thousand dollars just lying around?

With all the tension and looming risk of failure, the true reality of flips might be more interesting than what you see on reality television.

Texas Fix and Flip Loans: Properties You Should Never Finance

Don't get overexcited if you spot an online listing you'd like to flip and the profit projections look great on paper. There are specific properties that might never qualify for Texas Fix and Flip Loans, and even if they are eligible, there are certain deals you should avoid.

When it comes to flips, you want properties that will qualify for financing that is unless you've got hundreds of thousands stuffed under your mattress, and above all, you want properties that will sell and sell quickly.

If you can't flip a house within a few months, you could be on the hook for a massive balloon payment, so first, let us talk about homes that don't sell or even if they do sell they sell at a steep discount.

Properties you shouldn't take Texas Fix and Flip Loans out for, because they don't sell:

• Houses in high crime areas: Most buyers might want to take Fido for a walk after their evening meal. Before purchasing a house to flip, drive to the neighborhood in the late evening and ask yourself “Would I feel comfortable walking around here after dark?” If the answer is no, it’s a deal you should avoid.

• Houses in high noise areas: Buyers have alarm clocks for a reason. No one wants to be roused from sound slumber by a blaring cargo train, the horn of a semi, or the roar of an approaching jet, so avoid flipping homes in high noise areas.

Even though these houses are bad deals, you'd likely still be able to get a loan for them. But there are some houses that you shouldn't bother with because most lenders avoid them like the plague.

Don't risk applying for fix and lip loans on the following:

• Houses with a history of meth manufacture: If Walter White previously inhabited your home, lenders aren't going to touch it. The cost of environmental remediation is not an expense lenders want to cover.

• Houses with extensive mold or fire damage: In any flip, you might expect some damage, but if the cost of resolving the issue exceeds a couple thousand dollars, this is an expense most lenders don't want to cover.

• Houses with severe roof or foundation issues: Re-pouring a foundation or putting a new roof on would be a considerable expense that you will need to take care of before you can even begin any rehab work. Most lenders aren't interested in taking on such a cost.

• Houses that have been pillaged: In the rehab business, you can’t expect properties to be in mint condition. However, if you notice that someone has a stripped a house of its wiring and copper pipes, most lenders won't consider the cost of fixing the property to be worthwhile.

Notice that in the above cases, you could pay for these costs yourself, and you might still be able to get a loan. You could flip a house in a high crime area, next to the airport, or that has been used to make meth. Yes, you could flip such houses, but do you want to?

If a flip has any of the above issues, you should move on. Trust that there is a better deal out there.

How to Get Colorado Hard Money Loans for Medical Marijuana Dispensaries

Medical marijuana programs are now legalized in a number of states in the United States. Many times, Colorado Hard Money Loans are the best option to fund dispensaries participating in these programs.

In his youth, Jerry served in the military completing a Gulf War tour and earning a purple heart. In the early-1990s, he returned to his home in California with post-traumatic stress disorder and chronic back pain. For many years he suffered from these conditions and struggled finding a form of consistent relief. By the mid-1990s, there were legal changes to cannabis, which came to Jerry’s attention. Medical Marijuana was soon approved under Proposition 215—The Compassionate Use Act. According to the new proposition, Jerry learned that, with a physician’s approval, he could use medicinal cannabis to alleviate his PTSD and chronic back pain.

Jerry interested to see if medicinal cannabis could help his post-war conditions. After some time had passed and the proposition had taken effect, he talked to a physician and got approval to use medicinal cannabis. The treatment worked. Over time, Jerry experienced reduced anxiety, less nightmares, and greater sleeping intervals. The ability to sleep longer, and the lessening or stress and anxiety, helped him feel more relaxed, well-rested, and calmer.

While he had not disclosed his medicinal use of cannabis to those close to him, many friends and family members began to take note of Jerry being more relaxed, sociable, and friendly. Jerry felt better and less burdened.

Get Colorado Hard Money Loans for Medical Marijuana

Over time, Jerry decided he would like to help others struggling with chronic psychological or physical pain. Jerry decided to make a non-profit organization through the California Department of Public Health’s Medical Marijuana Program (MMP). With a knowledge of the system and various connections with physicians, Jerry applied to become a care provider in accordance with state law. The only problem was funding for his non-profit. Some friends of his suggested Colorado Hard Money Loans.

“While Jerry had accrued a significant amount of savings, he relied on Colorado Hard Money Loans to acquire the non-profit instructor he needed to participate in California’s Medical Marijuana Program.”

While Jerry had accrued a significant amount of savings in the past, he relied on Colorado Hard Money Loans to acquire the non-profit instructor he needed to participate in California’s Medical Marijuana Program. Colorado Hard Money Loans allowed Jerry to establish himself and help other individuals suffering or in need of medical help. His clinic attends to a community of thousands of patients

Sunday, April 7, 2019

Find Colorado Private Money Lenders for Flips

Colorado Private Money Lenders are here to help you eke out a living through profitable investment. Talk to your private money broker at Level 4 Funding for more information.

John Meredith was a car salesman. He worked 10 to 12 hours a day talking to the interested customers in his small town. Every morning, he woke up to the Arizona sun gently entering his window. Every morning, he ate the same breakfast comprised of three eggs. With his shoes covered in a fresh coat of polish and his shirt ironed, every morning he’d make the same 20-minute drive to work.

Opposed to the shady salesman archetype, John had a very calm, open, and helpful demeanor. His method of salesmanship was showing people the facts, the book values, the information… Transparency. Negotiation. Closure. Trust. The sale. Return customers, asking for him. With 4 years in the business, he had started to see many return customers. He’d watch them stroll onto the lot from the sales building’s window. The problem with the building was that it faced the east causing the mid-morning sun to glare his view. With a customer on the lot, he would stroll out, greet, question, and calmly guide. Calmly address concerns, objections, anger, bliss. Selling was chaos. It was an infinite cycle of addressing objection and responding with fact. Responding with reason. Coming out of the void of uncertainty with answers, assurance, and mutual benefit.

John sold cars by calming the horde of frustrated clients. After closing a deal, he would slowly move to the window and watch for another customer. Watch the sun cook the concrete and the blacktop. John had a friend who wanted to flip a house. His name was Jimmy Anderson. Knowing a few Colorado Private Money Lenders in the area, Jimmy was interested in taking out a loan to flip a house. The problem was that the Colorado Private Money Lenders would only fund based on a 60% of the loan-to-value amount. Meaning, to flip he needed John to match his investment amount.

Earn More Money Today Using Colorado Private Money Lenders

Jimmy had experience flipping, John had seen his success in flipping homes and was interested in investing. Within a week, they had received funds from local Colorado Private Money Lenders and had acquired a promising piece of property. What followed was not the easiest project. It required many hours after work and weekends. Many parts of the flip went well. Other parts were difficult: lackluster contractors, unexpected property damage, city laws, bureaucratic appeasement, marketing, sales, commissions, interest rates.

Find Colorado Private Money Lenders for your ventures. Talk to your private money broker today at level for funding to find the loan type, interest rate, and terms that are right for you.

However, with everything said and done, their side hustle earned an extra dollar and the effort in the end seemed worthwhile, a means to a monetary end. All of this was possible thanks to John’s friend’s insight and the funds from Colorado Private Money Lenders. Thanks to John and Jimmie’s private money broker at Level 4 Funding this opportunity was made possible.