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

Friday, April 12, 2019

What Is An Owner-Occupied Property And How Can An Arizona Hard Money Lender Help?

An owner-occupied property is the primary residence one lives. A property with up to four units, as long as the owner lives in one, is also considered an owner-occupied property. A vacation home that is outside of the county a person lives is also identified as an owner-occupied property.

What exactly is an owner-occupied loan? These are loans where the borrower lives in the property for which the loan is being obtained. There are tighter regulations involved and longer waiting periods for mortgage loan approval when working with a traditional bank. Banks also focus solely on a borrower’s credit worthiness and income when determining loan approval. Most people are familiar with the immensely long process and never-ending paperwork when trying to obtain a conventional mortgage. If the borrower has had a recent loan modification, is self-employed or has less than two years at their current place of employment a bank will likely deny their application.

For these many reasons many borrowers choose to work with a hard money, or private, lender. Not only do borrowers use Arizona Hard Money Lenders because of deficits or marks in their financial history—many times it is for the speed of the process. Arizona Hard Money Loans can also help assure the buyer they will not miss out on an opportunity due to losing the property to a cash buyer.

Terms Of Owner-Occupied Arizona Hard Money Loans

Owner-occupied Arizona Hard Money Loans are intended for short-term use—usually three to five years maximum. The rates on an owner-occupied Arizona Hard Money Loan can vary. Typically, they run between 9.99% to 14.99% with 2-6 points on the loan origination fee.

There are some standard requirements for Owner-occupied Arizona Hard Money Loans. Income must be verified by a 3rd party and hazard insurance and property taxes must be impounded for the first year. Depending on the lender they may be a prepayment penalty and there are disclosure laws that give the borrower awareness of the loan terms before documents can be signed. Most lenders require at least a 20% down payment—however, each lender is different in their terms.

If you are in need of financing for your owner-occupied property and either don’t qualify for conventional lending or you need the financing quickly make an appointment to speak to a local Arizona Hard Money Lender.

There are several reasons a conventional mortgage may not work for you. However, that shouldn’t hinder you from buying if the time is right. Arizona Hard Money Lenders can give you many options and will help you determine which one is best for you. Don’t give up on what you want because the bank said, ‘no.’ Banks are not the only options and many times they aren’t the best option.

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.

Why Use an Arizona Hard Money Lender?

Arizona Hard Money Lenders are individuals that have money to lend to projects. They will finance a borrower’s who bring projects to the table that an Arizona Hard Money Lender can anticipate will have a large return.

Why would anyone need an Arizona Hard Money Lender when they have a bank? Great question! There are many reasons to use hard money. A huge advantage to working with an Arizona Hard Money Lender is they do not focus on your credit report or your monthly generated income. Their focus is on your assets. Why? Because banks and individuals want to know they will have their money returned to them—while banks focus on “if” a borrower can pay the loan back, an Arizona Hard Money Lender focuses on “knowing” the money can be paid back. In plain language—your assets are their insurance. If a borrower defaults the lender can repossess the property and sell said property.

Arizona Hard Money Loans are short-term loans and, although there are situations where people in need of long-term financing use these loans temporarily, make the most sense for fix-and-flip investors. Fix-and-flip investors buy a property, quickly rehab it and sell it for much more than they purchased. These investors usually are in need of financing for only a very short period. Typically, Arizona Hard Money Loans are interest only loans with a balloon payment due at the end of the loan term. Most Arizona Hard Money Lenders do not impose an early payment penalty—meaning as soon as the property is sold the borrower is able to pay back the loan which decreases the pay back amount.

Benefits Of Using an Arizona Hard Money Lender

Arizona Hard Money Lenders can be more flexible in their loan terms than traditional banks can. These lenders do not have a standardized underwriting process. Each deal is appraised individually. Because of this flexibility lenders are able to adjust repayment schedules. An Arizona Hard Money Lender is one individual the borrower will work with— versus a team of people the borrower never sees at a traditional lending institution.

Arizona Hard Money Loans are closed quicker than conventional mortgages. Because their underwriting is much more lenient than a bank’s they don’t spend as much time on the loan application. They are focused on the collateral.

Arizona Hard Money Lenders work using a loan-to-value ratio. They keep this ratio anywhere between 50%-75% usually. However, in certain situations it can be up to 100%. If the borrower is buying an investment property, the lender will lend as much as the property is worth. Using this formula ensures the lender that in case of default the property can be sold back for the loan amount.

To find an Arizona Hard Money Lender you can do a simple google search of your geographic area.

If you are a real estate investor or plan on becoming one it will benefit your business to find a Arizona Hard Money Lender you work well with. Being connected to an Arizona Hard Money Lender will prove priceless, especially during times where fast cash is needed.

How an Arizona Bridge Loan Can Alleviate Stress

An Arizona Bridge Loan is money that is lent by a bank or investor to cover the interval between two transactions. A typical example is when a person is buying and selling a house.

Selling your home or buying a new home can be two extremely stressful times. Sure, it it exciting. However, it is that in between time that can easily cause anxiety for a buyer and seller. An Arizona Bridge Loan is simply a short-term loan that is used in both residential and commercial real estate.

Borrowers take out Arizona Bridge Loans when they want to buy a new house before selling their old house. Arizona Bridge Loans can ease this process and allow homebuyers to sleep at night. Arizona Bridge Loans can be structured in various ways depending on the situation. However, typically an Arizona Bridge Loan will be used to pay the mortgage off of the borrower’s old home. Usually, an Arizona Bridge Loan is interest only throughout the loan’s life—and a balloon payment is required as the last payment. This gives the homebuyer an opportunity to purchase a new home without paying two mortgages at once. Arizona Bridge Loans generally are only a few months, but some may last up to two years.

How Much Will I Pay Each Month For My Arizona Bridge Loan?

This is a question that has many variables to it. A borrower must factor in their new purchase price, how much cash they have to put down on their new home, how much their first mortgage, loan term and interest rate are, the Arizona Bridge Loan interest and the anticipated Arizona Bridge Loan term.

Let’s assume the following to give you an idea of what a borrower would be paying if they were to take an Arizona Bridge Loan and pay off their first mortgage monthly.

Ken finds a home for a purchase price of $250,000. He has $10,000 available to put down on this new property. His old mortgage was $180,000 for 360 months with an interest rate of 6.5%. His Arizona Hard Money Lender is approving him at 7.99% with a 24 month term. With those numbers Ken would be looking at his Arizona Bridge Loan payment of interest only at $399.50. So, instead of paying both mortgages until the old property sold—he is paying a total of $1,532.22 per month ($1,137.72 on his new mortgage and $399.50 for his Arizona Bridge Loan). Once Ken sells his old property he can take that money and pay the balance on the Arizona Bridge Loan—while he pockets the profit.

There is absolutely no reason to live in financial stress while you wait to sell your old home.

Depending on the market you live in it is highly plausible you may only be paying on your Arizona Bridge Loan for a couple of months. But, in the case that your home takes a little longer to sell, you have peace of mind not having to shell out two mortgages a month. See an Arizona Hard Money Lender and find out how they can take the stress off of you.

Thursday, April 11, 2019

The Real Deal on Flipping Houses in Arizona

Most people believe that you need money to make money. For the most part, that is accurate. However, there is a way to fix and flip a house with no money down—you just need the right lender.

Investors typically achieve flipping houses in Arizona with no money down by wholesaling properties and using their own money. Good news! That is not the only way. Another way to flip a house with no money down is to find a lender that offers 100% financing. Hard money investors are the “go to” when it comes to rehabbing a property. Their application process is simple—usually a borrower can apply online and be approved within 24 hours. Once approved, funds are typically available within 10 business days.

How Can I Flip A House With Zero Down?

Many people new to flipping houses in Arizona believe they have to have a large amount of money saved to get started. However, that is absolutely not true. The only absolute you must have is funding. Arizona Hard Money Lenders make it very easy to borrow money to rehab and sell a property.

Arizona Hard Money Lenders are lenders who have liquid capital and they are looking for profitable investments. However, there won’t be investors calling you on the phone and knocking on your door. You have to find them and approach them with your investment proposal.

Arizona Hard Money Lenders will typically loan with a higher interest rate than a traditional bank and their loan terms are much shorter. Most Arizona Hard Money Lender’s terms are 12 months to 3 years at between 7.99% to 15% interest. They base their lending on a loan-to-value ratio. Arizona Hard Money Lenders are a fantastic place to start your real estate career.

It is important you evaluate your tolerance for risk before taking out a loan from an Arizona Hard Money Lender. Have a plan B ready in case the house doesn’t sell as quickly as you hoped. Do your research on local real estate costs, rehab costs and permits needed. Flipping houses in Arizona has four basic parts: find the property, purchase the property, rehab the property, sell the property. An Arizona Hard Money Lender will work with you on funding all parts of the process.

It is possible to flip houses with no money down. Thousands of new real estate investors start this venture yearly.

It is true that many people have oversimplified the house flipping goldmine. Data proves that very few house flippers are using their own cash—the majority are taking out loans and many of them with 100% financing. Each case is different and each lender is different. If flipping houses in Arizona is something that has sparked your curiosity, find an Arizona Hard Money Lender and see if you can qualify for no money down. One major benefit is Arizona Hard Money Lenders do not focus on a borrower’s credit worthiness or monthly income. The loan is based on hard assets—property. Flipping houses in Arizona is highly profitable when done correctly.

How to Get the Real Deal When It Comes to 100 Percent Texas Fix and Flip Loans

Getting 100 percent Texas Hard Money Loans for flips might seem as difficult as catching a unicorn, but in reality it isn't. Getting such a deal just requires a little out of the box thinking and some negotiation on your part.

If a lender is offering 100 percent financing, you have to ask, 100 percent financing for what? Few if any lenders want to take on 100 percent of the risk by offering a true no money down deals up front. They will either fully cover the cost of purchasing a property, or rehabbing it, but not both.

You want both these costs covered, so what can you do so you can pay nothing for your next flip?

To cover both the cost of purchasing and rehab you need to work within the terms initially offered by your lender.

Simple tactics to get "real," 100 percent Texas Hard Money Loans for your next flip:

• Lower your initial bid: If your lender is offering 100 percent financing on the initial purchase price, lower your initial bid, so that your loan can pay for the rehab costs as well.

The less you pay for a property up-front, the more financing you'll have on hand for repairs and the less money you'll need to pay out of pocket.

Say your lender is offering you the full purchase price of a property listed at 100 K, and repairs will cost you ten thousand. In this case you’d simply lower your offer by ten thousand.

The math, in this case, works out as follows:

90 (to purchase the property)+10 in repair cost-100 in hard money= basically a free flip.

This simple formula will always work regardless of how much financing your lender is offering up front:

Purchase Price + Cost of Repairs = Funding Offered

Not every seller will be so kind as to lower their initial sales price by thousands of dollars for the sake of your own profit and convenience, so

• Take out a small loan to make up the difference: If you encounter, an intransigent seller unwilling to give you the required discount is your hope of getting 100% financing lost? No, all you need to do is take out a small credit line to make up the difference.

Getting 100 percent Texas Fix and Flip Loans comes down to following a simple formula.

The first thing you should look for is the largest amount of financing possible. The more financing you have, the more wiggle room you have when it comes to negotiating the purchase price of your flip.

So get a significant loan first then buy the property at a low enough cost so that your loan covers the cost of rehab. Working within the formula:

Purchase Price + Cost of Repairs = Funding Offered

Using this simple method you can flip for free regardless of the amount of money that your lender initially offers you. Remember you can always plug any shortfall in terms of financing with a small credit line.

If you can manage to make the numbers work you can pay nothing for your next flip.

Texas Fix and Flip Loans: How Much Should You Spend On Rehab?

With Texas Fix and Flip Loans, you might wonder just how much you need to spend on rehab. Should you spend a lot or a little? What’s the right balance?

Let us consider the following story, of 3 flippers in one neighborhood, to answer that question.

When it comes to Texas Fix and Flip Loans and rehab budgets, should you go overboard, or should you skimp out to make more money?

Our first flipper in this story has plenty of savings on hand to spend a boatload on repairs. She knows there's a bunch of cash-rich yuppies moving into the area, and given the market she decides to go all out.

She adds marble countertops imported from the Florentine hillside, custom plumbing fixtures from a French sculptor whose name no one can pronounce. She sources old Victorian paneling in mint condition and wood floors made from near-endangered Brazilian trees.

She assumes all these posh amenities are what is needed to meet the expectations of buyers in the area. The open house is abuzz with camera flash as photos are taken of the Instagram worthy interior. But no one puts in an earnest offer. Buyers complain that there is a far more reasonably priced house just around the corner.

Which bring us to our next flipper who is just down the corner. This flipper took out a small loan and thus spent very little on repairs.

After a quick walkthrough of their home, they notice the post-apocalyptic carpet and decide to spend their limited funds replacing it. However, they don't have the funds to replace the avocado green countertops and mustard yellow cabinetry, but in the end, the house is livable right?

They list the house at the median sales price in the area, but potential buyers complain, "well there's a house up the block going for a little more, and its uh, more modern."

When it comes to Texas Fix and Flip Loans and rehab budgets; plan your project so that your flip matches houses nearby.

The last flipper in this tale is listing that other house. Before they started work they did some walkthroughs of homes for sale nearby, all the while recording the features and amenities common to homes in the area. When they repaired their house, they kept their vision in line with what they've seen in other nearby houses.

They bring the countertops into the 21st century, color the walls in a neutral shade, and put down sturdy laminate flooring. In the end, buyers are impressed both by the houses' modern amenities and its reasonable price.

This investor wisely repaired the house so that it was similar to homes nearby and applied for just enough financing to bring the house up to a marketable standard. By making reasonable repairs, they were in turn able to list the house at a reasonable price.

So in this tale of three flippers whose house sold first? The last one.

Unlike the first flipper mentioned, they didn't make assumptions about the market. They also had a sense of the features that were standard in the neighborhood, so unlike the second flipper, they didn't skimp out.

When it comes to flipping, don't waste money bringing a house up to "magazine standard," because no one in the neighborhood will be able to afford it. Don't skimp out and just bring a house up to a "livable," standard, buyers won't be impressed.

The standard you should achieve with every flip is the "market standard."