Drawbacks of Arizona Hard Money Loans

Nothing is ever perfect for every situation and Arizona Hard Money Loans are no exception to that rule. But understanding the drawbacks of these loans can help borrowers use the loans correctly and for the greatest benefit.

Most borrowers quickly discover that the cost of Arizona Hard Money Loans is often substantially more than the cost of a traditional loan. But there are reasons that the loan is more expensive, and for many of the borrowers, hard money is their only option. Having a loan that is not based on a credit score is all that gets many borrowers funded after a foreclosure or other financial issues. While other borrowers are unable to wait through the 60 to 90-day application and evaluation process that traditional lenders impose.

In particular, the interest rate charged by hard money lenders is double to triple the rate that a traditional lender will charge. But again, borrowers who have no other option are willing to pay the higher rate to get a loan. In some cases, the borrowers can agree to a shorter term loan which decreases the interest cost. Other times, the borrowers will carry Arizona Hard Money Loans long enough for their credit to improve, then refinance with a traditional lender.

Another cost drawback for Arizona Hard Money Loans is that the lenders are not required to follow the same rules as traditional lenders regarding fees. The lenders can charge just points to cover their administrative fees or they can itemize the fees. The lender is free to select any method that he or she likes to set up the fee structure for the loans.

Time Frame

The fact that hard money is a short-term loan can also be seen as a drawback for some borrowers. Paying back a substantial loan in just a few months or even a few years can mean that the payment schedule is very aggressive. These very large monthly payments can be difficult to continue to make. Some lenders will allow borrowers to pay the interest each month in addition to only a small amount of the principle, but that required a very large balloon payment at the end of the loan term which can also be hard for borrowers to make.

Make Smart Choices

Nothing is perfect, but there are usually ways to work around the downside or drawbacks of any situation if the reward is high enough. Securing hard money when you cannot qualify for a traditional loan is a big reward for some borrowers. And those borrowers are willing to pay a higher price for the loan. Other borrowers understand that they need the loan very quickly and that hard money is the only choice in the short term. They then work diligently to find a more traditional and low-cost way to refinance the loan. Understanding how hard money works and the costs involved will help you to evaluate the costs as well as any other options that you might have and make a well-informed decision about the money that you borrow.

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

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Creative Solutions For Rental Property Loans in Arizona

Securing a mortgage for your personal home is different than getting a loan for an investment property. You might need to think creatively to secure Arizona rental property loans.

There are many differences in the finance process when you are seeking investment loans including rental property loans. In most cases, you are already carrying a loan for your own home, so that makes getting a traditional loan even more challenging. And because mortgage insurance does not cover investment properties, you will also need to be able to invest at least 20% of the purchase in the down payment. But there are a few tips that can help you to secure Rental Property Loans in Arizona to begin your career in real estate investing.

As mentioned, the down payment for a loan to purchase a rental or any investment property will require a deposit of 20% or more. And it is important to remember that having instant equity in the property is always good for a borrower. If you can invest 25% or more in the down payment, that equity will help to get you a lower interest rate as well as increasing the potential for securing any loan that you are seeking. A high credit score is also important when seeking a very competitive interest rate and getting approval for a loan.

Securing Rental Property Loans in Arizona can require some flexibility from the lender, so you are more likely to get financed when using a smaller bank or mortgage lender. Larger traditional banks and mortgage lenders tend to be very strict when it comes to the loan terms and the qualifications required to secure a loan. But smaller lenders and private hard money lenders are known to be much more accommodating to their potential borrowers.

Owner Financing

As the bank's loan criteria have become more stringent, sellers have become more open to owner financing. There are simply not as many well-qualified buyers, and a motivated seller is often willing to extend owner financing to potential buyers. But it is critical that buyers have any owner financing documentation reviewed by a legal professional to be certain that the deal is acceptable to the buyer. Terms and clauses in an owner financing contract are legally binding once signed and should not be one-sided to favor only the owner.

Be Creative

There are many ways that a resourceful buyer can acquire the cash needed to purchase a rental property. In some cases, equity or a line of credit on a personal residence can be used for the down payment. Other buyers choose to cash advance credit cards or to secure a personal signature loan to make a down payment on an investment property. Others turn to friends and family for loans or even a peer-to-peer lending site. What is important is that you are realistic about the amount of money that you can repay and the number of loans that you can manage to pay off at one time. Overextending yourself to make a down payment on a rental property is taking a large risk and could end up costing you the property before you even pay off the down payment loans.

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

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

How to Get Rental Property Loans with Bad Credit

The American Dream is defined as “the ideal that every US citizen should have an equal opportunity to achieve success and prosperity through hard work, determination and initiative.”

Many people believe that the best way to reach that dream is through real estate investments. Specifically, rental properties. The most frequent obstacle that gets in the way for potential investors is poor credit. Have no fear; the American Dream can still be yours even with bad credit. There is a way around pretty much everything and that includes less than perfect credit.

Very few people have the liquid assets to buy a rental property with cash, which is why conventional bank loans are used. Unfortunately, bad credit means bank loans are not an option. The best loans typically come from a traditional mortgage because they will give you the best rates and longest terms. This makes them the most affordable choice. But, if you don’t have superior credit and enough monthly income a bank will deny your loan request. If you want multiple rental properties it is highly unlikely that you will be approved for a conventional loan. Banks are uneasy when it comes to rental properties because there is always the chance that the home will be vacant; that means the investor will have to cover the mortgage. So, without a tremendous amount of monthly income it is most likely a bank will turn you down, even with gold credit.

FIND YOURSELF A HARD MONEY LENDER

Veteran investors know hard money lenders are the avenue to take when financing rental properties, not only for investors with bad credit, but also for the quick approval and flexibility of loan terms. Hard money lenders are private individuals or groups who invest cash for real estate ventures. These lenders extend loans based on property not the individual borrower’s credit.

Because hard money lenders don’t have to adhere to federal and state regulations and policies they can lend money to any borrower they see fit. The hard money underwriting is also not nearly as rigid as a conventional bank, which therefore speeds up the approval time. Most borrowers will receive an approval within two days, unlike a bank loan that can easily take up to 45 days, even without any hiccups.

Many Americans have given up on the American Dream, but don’t give up. With the right lender to guide you, you can live the American Dream—and investing in real estate is the only way to go.

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

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Arizona Fix and Flip Loans

Everywhere you look people are flipping houses and making a killing. It is the newest craze! I’m quite sure you’ve wondered if it’s too good to be true. How many people truly succeed at flipping houses?

Flipping houses involves two tangibles: a distressed property and money. It is a risky endeavor, as all investments are, but the payoff can be a highly remunerative move. If you are thinking of flipping a home but don’t have the finances there are options for you. The first move is finding the property.

Finding Property— The best tool for searching property is the Multiple Listing Service (MLS). It is a database put together that lists all the properties for sale by geographic region. Only licensed realtors have access to the MLS. If you do not have access to the MLS there are other sources with information about homes for sale. There are numerous sites such as realtor.com, zillow.com and trulia.com—and that is only a few of the sites available to anyone—for free. You can also search for listings by individual brokers. If you happen to be a cash buyer auctions can be a fruitful opportunity to find property with a large discounted price tag. However, if you need financing a hard money lender is absolutely your best option.

WHY HARD MONEY WORKS FOR ARIZONA FIX AND FLIP LOANS

Conventional loans require a large down payment, usually between 20-25%. Keep in mind, that loan will only be for the property. You will still need capital to cover the expenses related to the rehab of the property. In a Arizona Fix and Flip scenario a conventional loan just doesn’t make sense.

Arizona Hard Money Loans are issued by hard money lenders. These loans not only offer easier qualifications compared to other loan options, but they also have lightning speed approval time. You can get a conditional approval in less than 10 minutes and funding within two weeks.

Where the bank typically requires at least a 650 FICO score, a hard money lender can show more flexibility with their lending requirements. A hard money lenders focus is primarily on the value of the property that will serve as the collateral for the loan and the equity the borrower has in the property. This is why a hard money lender is not overly concerned with a borrower’s credit history or monthly income.

There are numerous benefits of flipping houses: making a quick profit, gaining experience, increasing your network and learning about real estate market.

Find yourself a lender you feel comfortable with and ask questions during your meeting. Ask your lender questions such as: are there other fees you will be required to pay, are there early payment penalties, are they a direct lender or a broker, how long have they been in the business, how often have they foreclosed on a lenders property? Get to know your lender and get the best Arizona Fix and Flip loan terms you can. Finding the right lender opens a large door of opportunity when it comes to flipping houses.

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

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Avoiding Foreclosure with Hard Money Loans

If you have enough equity in your home, then Arizona Hard Money Loans could be a good short-term option to avoid foreclosure. But understanding these loans is critical to your success.

Arizona Hard Money Loans are short-term loans which are based on the value of the property being purchased rather than the borrower's credit score. These asset-based loans offer a solution for borrowers with a poor credit score as well as those with no credit history. But in some cases, these loans are a good short-term option for a homeowner who is experiencing financial issues and it trying to avoid a foreclosure.

Many things can happen that make it difficult for a homeowner to make mortgage payments. Sometimes there is the loss of a job or others it could be due to an illness or even the death of one of the owners. But until the homeowner is back on his or her feet, making a mortgage payment can be very difficult. And when this occurs suddenly, there might not be time to seek a home equity line of credit or a traditional second mortgage. Arizona Hard Money Loans can be a fast solution to allow the homeowner to make mortgage payments while sorting out the financial issues.

The key to making this method work is to work very diligently at securing other financing at a lower rate once you are no longer at risk of a foreclosure. The high-interest rate of Arizona Hard Money Loans can quickly drain any resources that the homeowner might have. Some of the alternative options include getting a home equity loan, a home equity line of credit, acquiring a second mortgage or refinancing the entire home to pay off the short-term loan and substantially lower the monthly payments.

Fees to Expect

When you are researching a short-term loan to avoid foreclosure, you can expect to pay an appraisal fee, points on the loan and an interest rate between 10% and 15% over the life of the loan. If your lender does not charge points, then you should ask for a complete list of fees that are associated with the loan. Obtaining this list in writing can help to avoid surprise fees during the loan closing or as you approach the signing. If you are comparing several lenders, this list will also allow you to compare the total loan cost from each lender to select the loan that offers the best overall rate.

Make a Smart Choice

If you have suffered a sudden financial issue and you have equity in your home, then a short term hard money loan could be a solution to avoid foreclosure. You will need to be very careful to be certain that you completely understand your responsibilities as a borrower and the total cost of each loan option. This is certainly not a long-term option, but it will help to bridge a short-term issue and can help to avoid the additional issues associated with a foreclosure on your home.

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

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

You Can Build Equity and Financial Security with an Arizona Rental Property Loans

Rental property loans allow for individuals to enter into real estate investment and build a consistent form of income that will last for years to come. Equity, security, and growth are all within your grasp.

Rental properties are attractive for a number of reasons: they are a great way to establish equity, home ownership, long term cash flow, and even a retirement. Rental properties are secure in recessions when renting becomes more common. Furthermore, rental property loans Arizona to finance acquisition and renovation are not hard to come by and form a great starting point for new investors.

To invest in rental properties, buy distressed real estate to get into a property for a lower cost with room to even renovate afterwards. Buying distressed property is not always easy in a competitive market with a limited housing supply, but it is possible. Frequenting auctions of foreclosed or distressed homes may be a start. Getting to know individuals who will need to quickly move from an area or home and are looking to sell. Other options are finding individuals who have recently inherited property and are not up to keep up with the cost of property tax or estate maintenance. More options are on the table as well for those intent upon finding them.

Finding a distressed property in an area that will establish a favorable lease rate is paramount. Draw out the total foreseeable costs of the project. How much to acquire a distressed property, how much to renovation will be needed, how much rent can be charged, and how much will financing charges come out to be. Putting the numbers together and looking at properties that offer a great return potential.

Find a Hard Money Lender to Receive Arizona Rental Property Loans

After locating a property that is suitable to be refurbished and rented, find the lending you need. Since conventional lenders do not like to lend on distressed property, hard money rental property loans are your best bet to acquiring and renovating real estate. Hard money lending will allow you to close in quickly upon a suitable property and receive a loan within days to a week. Lightning fast, where conventional lending could take months to complete.

Talk to your hard money broker at Level 4 Funding to secure rental property loans. Further your real estate investments and establish a continuous form of income, possibly even a future retirement.

Talk to a hard money broker to find the rate, term, and loan-to-value needed for the rental investment. After acquiring the property and getting funding to renovate through Arizona rental property loans, find renters and establish a lease rate that allows for paying off the active hard money loan. After refurbishing and establishing a renting rate, bridging to a conventional lender is on the table to reduce the cost of interest required by hard money lenders.

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

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions