Variations in California Hard Money Lending

An California hard money loan is a loan secured by the value of a real estate property. California hard money loans are typically arranged at much higher interest rates than conventional commercial or residential property loans and are almost never issued by a commercial bank or other deposit institution but by private investors, generally via local areas brokers who specializing in arranging hard money loans. In reality every hard money lender California and every hard money loan is different than any other.

There are many other factors that affect individual loans among them:  credit, personal income, equity, loan purpose, term, owner occupancy, property type, property age and condition, location, city and state regulations, co-borrowers, market trends, availability of lenders and other factors. The relative importance of the factors varied from loan to loan. Every California hard money loan situation is to some degree unique—your own situation is unique. The only effective way to find out about your specific case and what can be done is enter a very basic request from a hard money lender California. The lender will have to review your request and reply with questions or with initial an approval. Based on the reply from the hard money lender California, you can modify your request and provide additional data

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 Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027111 Congress Ave |Austin | Texas | 78701                                   

         

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Private Money Lenders in California Risk Less

So, what is a Private Loan? It is a loan made, in this case, to a real estate investor and is secured (collateralized) by real estate. Private Money Lenders California are typically given a first or second mortgage that secures their legal interest in the property thus securing their investment. We are not talking about high Loan-To-Value (LTV) ratios the banks and savings and loan institutions make on homes. We typically employ low LTV ratios to our Private, also called Hard Money Lenders California, to increase security of the loan. Standard LTV ratios are usually under 75% of the value of the property securing the loan and frequently as low as 60%. This means additional security on the investment.

For example, if a property is valued at $100,000, Hard Money Lenders California would usually not loan more than $75,000 dollars on the property. That’s a 75% loan-to-value ratio. This approach taken by private money lenders California is obviously a much safer approach from that taken by conventional lenders. These banks get into trouble because they make loans at a 90%, 95%, or even 100% loan-to-value ratio leaving them no equity for transfer costs, if they are ever forced into a position where they have to take back the collateral property. It is in the best interest of the hard money lenders California to minimize risk and maximize return and this is why private loans should not be made without a 25%+ safety net.

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 Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027111 Congress Ave |Austin | Texas | 78701                                   

         

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Things to Consider as an California Hard Money Lender

With an California hard money loan, the payor needs the money. If he is coming into the private market and paying higher rates, it is because he has been rejected by or cannot go to the banks. I like paper because it can have a lower risk factor than any investment that I know. I am an equity investor. I know the property can pay me when the payor can’t. I do not want a loan turned down by the institutions unless there is enough equity that I would love to own the property and have the staying power to re-market it. As a hard money lender California, when I buy a discounted mortgage I am doing so because the seller of the note needs the money - not the payor. In addition, my yield is derived by buying the note at a discount, not because the payor is being charged usurious rates. Which brings up another important point!

As a hard money lender California, if you are loaning money at high rates you may be in violation of your local state usury laws. "Usury" is charging more interest than is allowed by law. These laws vary from state to state. In a situation where I make an California hard money loan at 18% interest, I could be in violation of a local state's usury laws. If I buy a 10% note discounted to yield 18% - that would not be usury. Making or buying a usurious loan can lead to a complete loss of all interest as well as other potential damages. There are federal "truth in lending" laws that apply to mortgage lending as well as local state versions in some states like California. For example, the APR - Annual Percentage Rate must be disclosed on a loan that includes points and other loan costs. It can be a violation of federal law not to do so. Violation of these laws could lead to a total loss of interest and principle on a loan, lawsuits or judicial problems. Buying a discounted mortgage is a whole different matter. Most laws do not apply to a secondary buyer.

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 Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027111 Congress Ave |Austin | Texas | 78701                                   

         

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Regulations For California Hard Money Lenders

You may have heard that hard money lenders California do not need a license. But is there any truth to this? It’s true that private money lenders California don't need one in the commercial sector. But do hard money lenders California need a license to lend for residential properties? Hard money can fall in the gray. The answer will vary depending on the state where the property is located.

If private money lenders California lend to a business who fixes up a residential property then it is many times completely valid to consider the loan a commercial loan. That means the commercial loan rules could apply. If hard money lenders California lend to an owner occupant for their primary residence they are definitely in the residential space and need to be licensed and also follow all the regulations. Most private money lenders California will not lend on residential property that will be owner occupied. That should give you a clue as to what most hard money lenders California think about the residential loan market and the regulations.

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 Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027111 Congress Ave |Austin | Texas | 78701                                   

         

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

How You Know When to Use an California Hard Money Lender

When should you use an California hard money lender? Hard money is great for beginning investors who may not have money or for those who have bad credit and cannot qualify. Investors also use California hard money when they need to purchase quickly. Typical soft money or conventional loans take 30 days or more. Sometimes that is too long. Using an California hard money lender is also a creative way to finance a property. Most like to call it "Nothing Down." If you can borrow enough money to buy the property, fix it up and then sell it under market value for a profit, then you've just made money without any of your own money. Sure it will cost you money to borrow that money, but the rewards outweigh the expense.

How can you find a hard money lender California? There are hundreds of hard money lenders waiting to lend you money. It could be your next door neighbor. The best way to a find hard money lender California is to talk to a mortgage company and ask for referrals. You can also call a title company or a real estate agency. They deal with buyers and sellers of houses every day. Shop around until you find the best one that will fit your needs. Another way is search online to find a hard money lender California. Some will lend nationwide, but these typically want a credit check. A hard money lender California will typically do a drive-by of the property if it is in-state.

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 Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027111 Congress Ave |Austin | Texas | 78701                                   

         

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

How Fast Can You Get Your California Hard Money?

Something you need to consider is how quickly the funds will be available from your hard money lender California. Many times, when you find investment properties, you need to move quickly. Your ability to get access to California hard money quickly can make all the difference. It's important to begin relationships with potential private money lenders California as quickly as possible. You also need to be aware of pre-payment penalties. Pre-payment penalties can really hurt your deal and cut into your profits substantially. Try to avoid pre-payment penalties when you look for private money lenders California.

Many private money lenders California today will also require you to fill out a credit application that may ask you for W-2's and or tax returns, your most recent pay stubs, and bank statements. Again, it's all about protecting their assets. Yet, some like the old fashion way where they only care about the deal so they do a drive by or physically look at the property. Again it all depends on whom you deal with. It’s very important to pinpoint that hard money lender California that you want to work with and make sure that you can get the terms that you need in order to successfully make the type of profit that you need.

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 Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027111 Congress Ave |Austin | Texas | 78701                                   

         

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Be Sure to Know the Terms of Your California Hard Money Lenders

It is good to know what the terms are when dealing with an California hard money lender so you can find the one that will fit your needs. Here are some of the terms you can expect to see from many California hard money lenders. Typically they will only loan you up to 70% ARV (after repaired value). This means that a hard money lender can loan you up to 70% of what the home is worth in repaired condition. So if you find a home worth $45,000 in the condition it's in, and needs $20,000 in repair work, and after it is repaired the current fair market value is worth $100,000, then typically they can lend you up to $70,000, which would cover the cost of the house and the repairs.

Other terms you can expect from hard money lenders California are high interest rates. Interest rates vary from 12% - 20% annually and terms can last for 6 months to a few years. Many times these rates vary depending on your credit score and experience. In most cases, there will be closing costs or fees to use hard money California. Typically hard money lenders will charge anywhere from 2-10 points just to use their money. One point equals one percent of the mortgage amount. So charging 1 point on a $100,000 loan would be $1000. These are all important things to consider when choosing a hard money lender California.

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 Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027111 Congress Ave |Austin | Texas | 78701                                   

         

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.