Setabay Private Hard Money Lender

Monday, January 7, 2019

How Hard Money Lenders Help Save Suffering Businesses

Arizona Hard Money Lenders saved my business, and I am so thankful for it. They can help your struggling business too.

As we approach the new year, I’m thankful for a number of things. My health and family are the obvious ones, but I’m also thankful for my Arizona Hard Money Lenders. This may sound cheesy, but once you read my story you’ll understand.

My family has owned a pizza place in our small town in Nebraska for 50 years. Throughout those years, there has been a lot of ups and downs with it. The latest down was in 2017 when we had a small fire and had to pay for repairs. We thought that was it, but then we ended up with plumbing issues, which cost a few thousand more dollars to repair. Business was starting to slow down, so income wasn’t as good as it used to be. People were simply turning to healthier foods due to the recent health craze.

As we scrambled financially to keep the business afloat, we started to fall behind on our building’s payments. We couldn’t keep up, and the lender was threatening to kick us out. We couldn’t have that happen to our family business.

We tried to run some specials to drum up some business. We even had an event to draw people in, but it just wasn’t enough. We were strapped.

How Arizona Hard Money Lenders Helped

One day as I was searching online, I learned about Arizona Hard Money Lenders and how people with commercial properties get out of difficult situations. I called one up to see how they could help me.

The hard money lender told me that they would give me the money to pay for the lease as a loan. The amount they would give me was based on the value of the property, and would end up being 60 to 70% of the total value of it.

This was much more than I needed, and definitely would get me out of the financial rut I was in, so I decided to go ahead with it.

The process was quick and simple. There was minimal paperwork, and it only took a couple of days to hear back on how much they were willing to lend me.

The Arizona Hard Money Loans saved my business and I am forever grateful.

Business owners need to know that Arizona Hard Money Loans are available. They get people out of hard financial situation quickly and easily when there’s nowhere else to turn. Hopefully, if you’re ever in the spot I was in, you’ll consider turning to one of these lenders.

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

PRIVATE MONEY LENDERS IN ARIZONA HELPING SMALL BUSINESS FINANCING

As a small business owner I can promise you that finding funding from a traditional bank can be extremely difficult.

Banks have always been very reluctant to lend to small businesses. In fact, the small business loan approval rate is less than 25%—that means over 75% of small business owners that apply for small business loans are turned away. When I needed funding and was turned away from my credit union and another national lender I went to see a private lender.

Most small businesses are able to obtain loans through Arizona private money lenders. In fact, the demand for private business lending has skyrocketed so heavily that they are not difficult to find anymore. Private money lenders in Arizona usually specialize in certain financing—others have many niche markets.

ADVANTAGES OF PRIVATE MONEY LENDERS

Unlike a bank, where you are inundated with documents to send, documents to sign and documents to return—and then the documents they send back to you and return once again. This underwriting process can take months, and with only a less than a 25% chance of being approved— is it even worth your valuable time. The application process with private lenders is much quicker—business owners can be approved with a day and receive funds within days. When you are running a business you don’t have time to wait for your money.

Bank terms are solely based off of your credit history. As a small business owner myself, I know that many times owners can run into financial difficulties, especially in the beginning stages, and your credit can be effected. Unlike banks, private lenders are more understanding of market trends and can tailor their loan terms based on their own judgement.

There is a potential for higher interest rates on private loans due to the risk the lender is taking. These are asset-based loans—meaning the amount of the loan is based on the collateral you can offer the lender. Typically, it is not the entire value of the collateral that is considered—instead it is the loan to value ratio that is considered for the loan. The loan to value is simply a percentage of the property’s value. The loan value is the appraised value of the property. Typically, Private money lenders in Arizona loan up to 65% of the value of the property—but it is not unheard of them to finance even higher. This is how the lender assesses their risk in the loan.

If you are looking to open a franchise or your business is not in a position to qualify for a traditional small business loan, private money lending is an avenue you should seriously consider.

Other than the slightly higher interest rate attached to private money loans all other aspects of private money lending are easier and quicker than traditional loans. These loans are based almost completely on the collateral of the small business owner and funds can be released quickly. If your business is in need of funding, and you have found yourself discouraged with the banks, it is time to begin your search for private money lenders.

Sunday, January 6, 2019

ARIZONA RENTAL PROPERTY LOANS

Each state has different processes and laws for buying rental properties. This article will reflect Arizona specifically.

So, you are considering buying an investment property in Arizona—and you are wondering what the process looks like. The first thing you need to do is determine your budget. Keep in mind that this will be a home for someone other than yourself and so it must meet certain criteria—this usually means you will need to make some repairs and upgrades on it. When obtaining financing these rehabilitation costs need to be included.

Once you find a property—the next step is negotiating a price. After that, you will have a home inspection process and appraisals. But, unless you have cash—where is this money coming from?

TRADITIONAL LENDING VERSUS HARD MONEY LENDING FOR ARIZONA RENTAL PROPERTY LOANS

So, you have been pre-approved by the bank, but now you must go through the long, tedious process of obtaining approval. Using traditional funding is a lengthy process that can easily take up to 90 days—banks have a very strict underwriting process that slows everything down. Many times, investors lose the property to a cash buyer. The problem borrowers run into with investment properties is these are non-owner occupied loans—meaning the owner will not live in the home. There are some specifics you ought to be aware of. First, you will certainly have a higher interest rate and closing costs will be higher, as well. Your down payment will be much higher than your owner-occupied home, also. With conventional mortgages banks will require that borrowers maintain a certain amount of money in reserve at the time the loan closes—reserve requirements typically range from two to six months of total monthly housing per property—think how much that will be after two or three investment properties.

Many investors choose hard money loans for rental properties. With a hard money loan chances are your down payment will be smaller and it is possible you could have no required down payment. The approval process is quick—it is possible to receive same day approval and funds within a week. An investor can compete with all cash buyers easily using a hard money loan. You are also able to borrow more with hard money lending. When banks require your down payment that is their security threshold. With hard money lending for an Arizona rental property, the security is backed with the property.

Hard money loans can be a great starting point for Arizona investors.

Hard money loans can be extremely helpful if you do not have the large down payment required for an Arizona rental property or the time to save money for the down payment. They can also be beneficial for competing with cash investors. Arizona Hard Money Lenders can help you through the process and start expanding your real estate investment portfolio.

What Are Bridge Loans

Understanding the purpose of Arizona bridge loans can offer home buyers many options if their current home is still on the market. These temporary loans can help to coordinate your finances between buying a new home and selling your current one.

There are many events that must fall into place when you are in search of a new home and wish to sell your current home. And very rarely does everything work on the perfect timeline for you to sell your house before you need to purchase the new house. But buyers can use Arizona bridge loans to secure their dream home while waiting for their current home to sell.

What you are really doing with a bridge loan is borrowing the money for the down payment on your new home which would have been funded via the sale of your current home. Most home buyers, other than first-time buyers, rely on the equity they have in their current home to make the sizable down payment on their new home. So in a sense, Arizona bridge loans are designed to be short-term loans.

The qualifications for Arizona bridge loans are not the same as a standard mortgage. It’s assumed that if you have a current mortgage on your home then you have decent credit. What the lender is more concerned with is your ability to make both mortgage payments until your first home is sold. The lender will evaluate your income and the total of the two mortgage payments to decide if you are able to carry both mortgages. If the numbers work out then most lenders will fund requests for Arizona bridge loans.

The Cost of A Bridge Loan

Rates and terms can vary depending on the lender. In many cases, the lender will offer borrowers a payment schedule with the first payment being due several months after the loan is funded. This allows the borrower time to sell his or her current home without having to make payments on the bridge loan for a few months. But there is interest accruing from the day that the loan is funded. Then the borrower pays that interest when the loan is paid off. The goal is to sell the home quickly and only be required to pay a month or two of interest but in a slow market, the bridge loan could extend for a longer period of time which would require the borrower to make payments.

Risks and Rewards

The greatest reward offered by a bridge loan is that buyers are able to purchase a new home without having to wait for their current home to sell. That is important if the market is very competitive or if the inventory is very limited. The drawback is that the borrower will be paying two mortgages until their old house sells. And if the house does not sell soon after the new home is purchased, borrowers could be facing two mortgage payments plus the payment on the bridge loan each month. The result could be a very tight budget until the original home is sold.

THE REAL DEAL ON ARIZONA HARD MONEY LOANS

Hard money refers to capital available outside of traditional lending institutions. A hard money loan is secured by the borrowers real estate assets. Investors use the loans to acquire needed capital to purchase or renovate a property.

Arizona Hard Money Lenders are private individuals or groups that have available capital for loans. Lenders primarily loan in certain geographic locations and have more lenient underwriting criteria. The main criteria is that there is a reasonable loan to value (LTV) and defined loan terms. These lenders are investors themselves and their investment comes in the form of the interest accrued on the loan. They are seeking better returns than traditional investments such as stocks and bonds.

Because Arizona Hard Money Lenders are not required to follow federal banking regulations they approve and release funds much quicker than traditional lenders. Although, they have an underwriting process, it is much simpler and requires much less documentation. Most lenders do not require tax returns to prove property is generating income—many borrowers run into this when dealing with a bank. Banks require all documentation of all properties and the income on tax returns. This can slow the approval process down tremendously. Most Arizona Hard Money Lenders can give immediate approval and funding within a week—whereas, a bank can easily take up to 45 days.

ARE ALL ARIZONA HARD MONEY LENDERS THE SAME?

Absolutely not. Because Arizona Hard Money Lenders are private lenders each has their own set of rules. Many lenders choose to only work locally, some choose a certain geographic area and others work nationwide. There will be some lenders that focus solely on fix and flips while others have a wider spectrum of specialization.

Just as Arizona Hard Money Lenders have different styles—they have different lending practices, as well. Lenders vary in the fees and expenses they asses. Some work with a higher LTV while others charge for preparing documents. Flexibility is a key component of the hard money lending business. Lenders can work loans on a case by case scenario. Although, they have their lending terms and requirements they can differentiate terms amongst borrowers.

Make sure you research lenders, as they are all very different and have different rules and regulations. For example, many lenders do not have prepayment penalties—others may. When inquiring about lenders make sure to ask about any fees that will be part of the loan. Don’t forget to gain a full understanding of late fees, as well.

Although, these loans are backed by the borrower’s property versus their credit and income—Arizona Hard Money Lenders do not want to have to foreclose on a property. In the case of default, a reputable lender will try to avoid foreclosure at all possible costs. When a borrower misses a payment, lenders will reach out and attempt to work with them. The key is communication. As in any financial situation where money has been borrowed—if you can’t make a payment, make a phone call and arrangements. Veteran lenders have dealt with this and can work with you to make your payment.

When you work with a Arizona Hard Money Lender, you are working with a person—not a team of faceless bankers.

Forming a personal relationship with your lender is the biggest benefit of hard money lending. You are both making the same investment and your lender wants you to succeed as much as you want to succeed. It’s a win-win when teaming up with a Arizona Hard Money Lender.

What Are Arizona Construction Loans

Building a new home is very exciting. But for most homeowners, the process is not possible without an understanding of an Arizona construction loans and how to properly use them.

1. Going to the bank to get a home loan is a nerve-wracking process but one that many people are familiar with. The loan approval is based on the borrower’s creditworthiness but also the value of the property that the borrower wishes to purchase. This is because the value of the property represents a certain level of security for the lender. In the event that the borrower defaults on the loan payments, the lender is able to recover some or all of their investment by taking possession of the property. But in the case of building a new home, there is no existing property to be used as the collateral for the lender. In these cases, construction loans Arizona are used to fund the building of the new home.

There are two types of Arizona construction loans that borrowers can choose from. The first is a construction-to-permanent loan which pays for the construction of the home and then the lender converts the loan balance to a more traditional mortgage. The second option is a stand-alone construction loan. This is exactly what the name implies. The loan pays off the construction of the home only. When the borrower’s home is completed, he or she must finance a traditional mortgage to pay off the balance of the construction loan.

Securing a construction loan is more challenging than qualifying for a traditional mortgage simply because there is no real property to uses as the collateral for the loan. Lenders will want to know all of the standard loan information about the borrower but they will also want to know a great deal about the proposed home. Information regarding the size of the home, the material being used for construction and the contractors and subcontractors who will be doing building the home. All of this information allows the lender to project the potential value of the completed home and the security that it would represent if the borrower defaults.

Proof of Funds

In addition to having a good credit score and the home having a good market value, the lender will require borrowers to show proof that they have a good amount of savings for construction overruns or contingencies. There is not a specific number or percentage that all lenders require for construction type overages, so borrowers will want to verify with each lender what is recommended.

The Process

Construction loans in Arizona hold much more risk for lenders, therefore they are more expensive and will include more inspections and contact throughout the construction process. Lenders want to see continual progress on the project, only standard building methods and practices and quality workmanship from the contractors. If building your new home is your dream, then be certain to complete your research to know the requirements and process for securing a construction loan. You will face more scrutiny when seeking the loan but your custom home is certainly worth the extra effort.