Setabay Private Hard Money Lender

Monday, January 14, 2019

Why Don’t Most Lenders Offer Owner Occupied Hard Money?

Finding someone who will provide Owner Occupied Hard Money In Arizona isn’t always easy. However, it’s still out there and you can get financed if you know where to look.

In order to understand why Owner Occupied Hard Money In Arizona is harder to come by, you have to break down what exactly it is, how it works, and who uses it. Unlike traditional loans which are essentially offered on a promise to repay and are based on a borrower’s good standing, hard money is collateral-based. That means the borrower has something of value and that item is used to secure the loan. In most cases, it’s a home or commercial property. Because of this, things like the borrower’s credit don’t impact approval a whole lot, so the loans are leveraged quite a bit by small-business owners and real estate investors.

The other big difference is that the funding typically comes from private investors rather than big banks, so the terms will be different as well. Oftentimes, alternative funding opens up doors for people because the terms are far more flexible than traditional loans.

The catch comes in when the owner intends to live on the property. That means it’s no longer a commercial loan for business purposes, but is more along the lines of a traditional mortgage. As such, the loan is subject to more regulations than it otherwise might have been. For example, a third party has to verify that the borrower has enough income to repay the loan, there’s greater tax and insurance oversight, and the full disclosure process must be seen to. This means that that’s normally a simple process that can be seen to in a matter of days could take a month or longer, and the work a lender must do is amplified quite a bit. So, it’s totally understandable that a whole lot of alternative lenders don’t want to get involved with them.

If You Have a Business Purpose, it’s Easier to Get Alternative Financing

That said, there are times you may still really want to use Owner Occupied Hard Money In Arizona. For example, if you’re doing a fix-and-flip, but plan to live in the home while you’re doing the work. It’s times like these that your project may genuinely be considered a commercial one, in which case, it’s easier to qualify.

Work with a broker who understands your goals and regulations to improve your chances of getting funded.

Although it may be harder to get Owner Occupied Hard Money In Arizona, it’s not unheard of. A seasoned broker will explore lots of options and will find a funding source that works for your needs. From going with a standard fix-and-flip loan through options like bridge loans and blanket loans, there are many methods to get your project off the ground, even if you plan to live in the house for the duration of the loan. Start by finding a broker who knows the industry well and works with a number of lenders and you’ll find a solution that’s right for you.

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.

How Get an Airbnb Loan in Arizona and Work at Home in 2019

If you’ve always wanted to work at home, 2019 is the year to make it happen. Using an Airbnb Loan in Arizona, you can cash in on the trend and earn a solid income in short-term rentals.

Your future profits will hinge upon finding the ideal property, so start looking early. If you live in an area with lots of tourism, do your searches during the slow times, when homeowners aren’t likely to be using vacation properties and they won’t be rented out. This will give you more time to check out the inside of each and will give you a bit more wiggle room when negotiating a better purchase price. In most areas, the summer is tops for tourism, so you’ll want to start your research at the start of the year. The same rules apply even if you’re looking at properties in neighborhoods, as home sales peak during the summer because families tend to move when school is not in session.

Get to know the areas you’re considering. People who are only staying for a short period of time like to be close to activities and necessities. Check out how close each property is to things like airports, convention centers, cultural activities, entertainment venues, grocery stores, and the like. Whenever possible, visit the area at various times of the day to get a feel for what your renters will experience.

Check out the house and decide on a plan of action. You’ll have a myriad of options here, from determining what, if any, renovations you’ll make through how you’ll handle the upkeep. Nowadays, there are numerous services designed to clean and prepare rental homes for guests, but you can hire your own team or take care of the transitions on your own to keep more money in-house. You’ll also need to verify what kind of Airbnb Loan in Arizona you want. Bear in mind, banks will consider this a second property for your or will look at is as a commercial property, so you may need to have an alternative funding source, like a hard money lender, lined up to make the purchase.

If You Want an Extra $21,000+ Per Year, You Can Get It Through Vacation Rentals

According to research from Savills, the average income achieved through a second home is $21,000 per year. To be clear, that’s almost exactly what someone working full-time on minimum wage will earn in 2019 ($21,528) and is only a couple thousand shy of what the average part-time employee earns ($27,284). In other words, your Airbnb Loan in Arizona can give you the opportunity to almost effortlessly earn what other people make in their careers, all while sitting in your pajamas and sitting at your computer.

Work from home and build a successful portfolio to increase your wealth exponentially.

If the average vacation rental is netting its owner $21,000 per year, imagine what the top earners are getting or what you could get by operating several. When you’re ready to get approval for your first Airbnb Loan in Arizona, take time to create a comprehensive business plan, complete with details about the property, how it will generate cash, how much it will earn, and what your plans are for operation are. With a little bit of effort, you can create a solid secondary stream of income or wholly work from home in 2019, all through vacation rentals.

Sunday, January 13, 2019

3 Things TV Shows Don’t Tell You About Rehabs & Fix and flip loans in Arizona

While home rehab TV shows can be great entertainment and provide some insights into the industry, they don’t show the full picture. They’re missing key details on fix and flip loans in Arizona and projects that might change the way you look at the field.

1. Market research matters. In all fairness, someone scouring spreadsheets and pulling up data online doesn’t make for particularly good entertainment, so it’s no surprise most TV shows leave this component out. However, a significant portion of any project’s success is completed before the rehabber even sets foot on a property or picks up a hammer. A successful rehabber invests time in researching which cities and neighborhoods are best, then explores the needs and potential of several properties before digging in.

2. Not all restorations provide ROI. We all love seeing a gorgeous house with wow-factor and curb appeal. Potential buyers love it too. It’s the little touches a rehabber adds that create an emotional connection with buyers, so they picture themselves living in it and are willing to pay more for the home. However, there are many things that will not result in profits. According to MoneyWise, adding a backyard patio or sunroom will return less than half your investment to you. Adding an upscale master suite or bath will only give you 55-56% of your investment back. A full kitchen remodel will, in all likelihood, only give you 59% returns at best. These are things you’ll commonly see done in TV shows, but they don’t typically result in real-world profits.

3. Finding financing isn’t always straightforward when you’re not a celeb. It’s pretty rare for TV shows to even talk about financing. That may be because it rarely adds entertainment value or it could be because it’s just not a concern for them. In some cases, the network funds the flips, while in others, the stars have income from the show, so they can either pay for the projects outright or can use their cash flows to demonstrate they have the bandwidth to pay a conventional mortgage. In the real world, many rehabbers use fix and flip loans in Arizona, which are relatively easy to get, even if you don’t have celebrity income, a network funding you, or great credit.

If You Can Address the Behind-the-Scenes Issues, You Will Be More Successful

Even though TV shows don’t usually cover the legwork done before a project starts, it’s things like fix and flip loans in Arizona and crunching the numbers associated with ROI and market conditions hat play a major role in the outcome of a project. If you’re just getting into the biz, you’ll need to do some homework to ensure your rehab project is profitable.

Build a team of pros who are there when you need them.

One thing shows get right, however, is that it takes a team to make things happen. Shows like to highlight the unique dynamics of each relationship because it adds drama and entertainment value. In some cases, the disputes between parties keeps viewers tuned in, while the dynamics of a happy couple seeing to a joint project gives the empowering feeling that anyone can achieve the same. The latter is more true to life, but the real team expands beyond those seen on screen. There are always contractors, subcontractors, brokers, lenders of fix and flip loans in Arizona, and more involved, so if you’re getting into the biz, building your dream team is a good place to start.

How to Vet Contractors When You’re Using Loans to Flip Houses in Arizona

The criteria used to assess whether contractors and subcontractors are a good fit for your project change a bit when you’re working on an investment property versus your own. If you’re using Loans to Flip Houses in Arizona , make sure your team is up to the task.

1. Make sure they have experience with fix-and-flips. When a traditional homeowner hires a contractor to perform repairs or remodel, it’s usually just an annoyance if it takes longer than initially planned. If you’re in the rehab business, a sluggish contractor or delays can derail a whole project, particularly if numerous tradesmen are involved and their work hinges upon someone else’s work being complete. Even a delay of a day can send the tradesman onto his next project, leaving your project undone until he has time to come back. When you’re using Loans to Flip Houses in Arizona , you’ve got an exit plan and need to stick to your timeline. You need someone who has a proven track record of doing so in order to ensure your project moves forward without costly delays.

2. Get recommendations from other rehabbers and investment property pros. While you can check out general review sites, most are geared toward the consumer market. There’s a big difference in the types of requests a homeowner has and what a rehabber expects, and that ranges from the types of projects completed through the materials used. Your average homeowner may fixate on which shade of beige to paint the walls, which is fine because they’re the ones staring at it for years to come. A good contractor will roll with these types of things and be at least somewhat patient. That’s what’ll get him a good review with a consumer. A rehabber wants a contractor who can make a quick assessment and move on. The mindset is different. In other words, you don’t necessarily want to go with review sites, but rather get recommendations from other rehabbers and people in the industry.

3. Verify they’re insured. Uninsured contractors may do the work for less, but what happens if one puts his foot through the ceiling while working in the attic? What happens if one doesn’t seal a pipe joint properly and it leaks? The list goes on. Uninsured contractors can wind up being a costly proposition that will eat through your budget and then some with a single error or misstep. A true professional has insurance.

Get Multiple Bids to Make Evaluating Contractors Easier

Getting multiple bids lets you see the full range, so it’s easier to see if someone is gouging you or is likely to take shortcuts. It also means several highly-trained eyes will be checking out your property, so you’re more-likely to catch all the issues and hear multiple ways to address each. Getting multiple bids will also help you maximize your return on investment—an absolute must when using Loans to Flip Houses in Arizona .

If you’ve got cash in hand, you may be able to negotiate better too.

It’s generally unwise to prepay for services, as this can actually make the team work slower. However, letting your contractor know you’re using Loans to Flip Houses in Arizona may make him more willing to cut you a better deal. It provides reassurance that he’ll be paid swiftly and, if the project goes smoothly, that you’ll probably hire him next time too. Once you’ve found your ideal contractor, use your funding as leverage to negotiate better rates. By applying these tips, your projects will be smoother and you’ll see greater returns.

Understanding Arizona Hard Money Loans

Not all loans are perfect for every borrower’s needs. Understanding what Arizona Hard Money Loans are and how they are best used can offer you some unexpected benefits.

Many consumers are completely unaware of what Arizona Hard Money Loans are and how they can be beneficial. The misconception is that these loans are in some way less than legal is completely false. These are simply loans which are offered and funded by private lenders and not traditional mortgage companies or banks. And these lenders are providing the money not so much based on the borrower’s credit score but more on the value of the property being purchased. This is because the property is going to be the collateral for the loan. Arizona Hard Money Loans are sometimes referred to as asset-based loans as well.

There are a few benefits to Arizona Hard Money Loans being based on the value of the property. The first benefit is that the borrower can have less than perfect credit and still easily get approved for the loan. Most lenders would prefer to see a credit score of about 550 or more but each lender is free to decide who they are willing to lend money to. Also, by eliminating all of the background documentation and inquiry into a person’s financial history, the approval process can move much more quickly than a traditional loan. In addition, hard money lenders are free to tailor the terms of the loan to meet the needs of the borrower rather than forcing all borrowers to live within the same terms as banks often do.

All of these benefits make hard money a faster and simpler process when time is critical such as for the purchase of a fix and flip property. Finding a great deal on a property is not always easy and when an investor does, it is like to become a bidding war if he or she cannot get funded quickly to close the deal. In these cases, a flipper can turn to a hard money lender and have the deal done in as little as a week.

A Price To Pay

All of these great benefits are not free. Any loan will cost you money in the form of interest and other fees, but hard money is going to cost you a little more in interest than a traditional loan. Because most hard money deals represent a higher risk, the lender will ask for a higher interest rate to protect his or her interest in the deal. In addition, there could be fees or other terms of the loan that works to protect the lender’s investment.

Due Diligence

Because hard money lenders are private lenders, they are free to create the terms of their choice for any loans that they fund. For this reason, it is critical that you read the entire loan document and understand all of the terms of the loan prior to signing it. Even though the lender is private and not a bank, the loan agreement is a legally binding document and you will be required to follow any agreement that you sign.

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

Types of Loans To Flip Houses in Arizona

It is important to know that there are different types of loans available. And, some Loans To Flip Houses in Arizona offer more benefits than others.

There are dozens of television shows which have popularized the concept of buying a house, making some repairs and renovations and then quickly reselling the home. The process is known in the real estate industry as flipping. And this process is making a lot of money for a lot of people. But there is more to this business than just buying low and selling high. It is critical that investors understand all of the nuances of using Loans To Flip Houses in Arizona.

There are four common Loans To Flip Houses in Arizona for the average investor. And in this case, average means an investor who is going to need to secure financing and does not have a pile of cash under the mattress. The first method is what almost everyone uses to finance a home, the traditional lenders. These are the mortgage companies and banks that everyone is familiar with. The biggest issue when using a traditional lender is the time involved. Just as the name implies, flipping is a fast process which relies on speed and efficiency to make the process profitable. And anyone who has ever applied for a traditional mortgage knows that the process is anything but fast.

The second method is to use personal credit such as the equity in your own home through a refinance or a home equity line of credit. The personal refi has the same issue as the traditional loan in that the time required does not fit the fast process of a flip. The home equity line is a better fit because you have instant and constant access to the fund. But you are essentially placing your own home at risk by using a HELCO.

Arizona Hard Money Loans To Flip Houses in Arizona

Hard money is a loan that is funded from a private lender rather than a bank or mortgage company. These loans are fast and relatively easy to secure as compared to a traditional loan. This makes Arizona Hard Money Loans the best choice for most real estate flip deals. The drawback on hard money is that the cost is higher than a traditional loan. But when time is critical, hard money is the way to go. Hard money is an asset-based loan so the application process is not as time-consuming or stressful as a traditional credit-based loan approval.

Evaluate Your Options

Even though Arizona Hard Money Loans are more costly than traditional loans, the fast turnaround time is often worth paying for. You could find a property, make an offer, get hard money and complete the refi and flip before a mortgage company would even get you an answer on your application. And the fact that Arizona Hard Money Loans are short term is also a benefit as you are not financing out for a number of years and paying interest for the entire time. There is also the option to use the equity in your home or a line of credit but beware of risking your home on the flip of another property.