Setabay Private Hard Money Lender

Saturday, January 19, 2019

What are Fix and Flip Loans?

The fix and flip investment strategy involves purchasing the ideal property that is ripe for renovation or a quick turnaround. There are several types of Arizona Fix and Flip Loans that can help make your dream a reality.

The fix and flip real estate investment strategy involves purchasing property that is in need of either minor renovation or major construction. After improving the property, you then sell it for a profit. As simple as it sounds, there are many moving parts and areas that require a certain depth of knowledge. Let’s dig a little deeper.

You purchase a property through an auction or a foreclosure or, lastly, a bank foreclosure sale. At that point, depending on the property, you may choose to sell it “as is.” A true fix and flip, however, involves improving the property first, adding value, and then selling it. Improving the property can range from small but important updates to the kitchen and bathrooms to a complete renovation of a home.

A successful fix and flip involves many components. As a Fix-and-Flipper, you must be able to acquire a property at a price that allows you to do the renovations and make a profit. You, as an acquirer, must know your market, as a project manager, you must be able to manage the various contractors to execute the improvements, and, finally, you need to be able to secure funding for your project. One major hurdle is obtaining financing from a bank. You will find that this process may too long and costly. For example:

· Typically, the fix and flipper is opportunistic and purchases distressed properties. This means that time is of the essence and a lengthy and cumbersome bank loan will delay the process.

· The bank route depends heavily on the buyer’s credit history. Your track record and expertise in fix and flip investments is usually discounted by banks.

· The bank route may not lend for improvement costs for a fix and flip property.

Fix and Flip Loans—The Bridge Loan

Loans for fix and flip investments are typically known as Arizona Bridge Loans. The bridge loan is the “bridge” between the sale of the purchased property once renovated. These loans are short term in nature and secured by the real estate. The number and type of Arizona Fix and Flip Loans are varied. Some of the different types are:

· Purchase the property: A seller has a distressed property and the buyer has the opportunity to purchase the property at a deep discount, make some minor renovations, and then sell it.

· Renovation loan: A buyer has the opportunity to purchase a single-family home. The borrower will renovate the home to make it more eye appealing and modernize it with a new kitchen, bathroom, painting, and landscape, and then put the property up for sale.

· Arizona construction loan: A vacant piece of land is available with a dilapidated single-family home. The borrower demolishes it, replaces it with a 2-unit duplex and then sells it.

At Setabay, we work with hundreds of private Arizona Hard Money Lenders, many of which specialize in fix-and-flip loans. Our interest rates start as low as 5.99 percent with terms that range from 3 to 60 months.

The cause of capital inefficiencies in the lending market allows Arizona Hard Money Lenders the opportunity to provide liquidity while the borrower pays higher interest, organizational costs, and points. These loans are collateralized by the property or land involved in the project. The term of the loans is usually 12-24 months. An individual who invests in Arizona Fix and Flip Loans has their money going directly to the originator who then provides their clients with the working capital to fund their projects. At Setabay, we offer some of the best interest rates in the market. Call us for a no-obligation quote.

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.

Differences in Loans to Flip Houses in Arizona

Securing loans for flipping houses can be quite a challenge for investors. There are many loan options available to flip houses. It is important to distinguish the pros and cons for each type of loan in order to decide which is your best option.

Conventional Loans

Conventional loans are loans given by banks and mortgage companies. These loans are solely based on the borrower’s FICO score and income. There are a variety of conventional loans to qualify for. These loans can be easier on your wallet than other options. The interest rates are at market level, which will be lower than most other loan options, and the payments will be spread over a longer period than other loans—usually 20 to 30 years. The down payment on a conventional loan will depend on the program a borrower qualifies for and can be anywhere between 3% and 20%. Typically, these are not given out to fix & flip houses. To qualify for these types of loans you need a great credit history—banks like to see at least a 650 FICO score, a low debt-to-income ratio and proof of income from the same place of business for at least 2 years.

Government Insured Loans

The Federal Housing Administration (FHA) offers rehab (Arizona Fix and Flip) financing through its 203k loan program. This loan covers the lender for both the property itself and the renovation costs, unlike conventional loans that only lend for the purchase of the property. These loans can be used for multi-unit property investments. The only catch is that the borrower is required to live in one of the units. This loan is a very low cost financing plan, but the government has many rules and the borrower must adhere to all those rules to get financing. These loans are only available for a limited selection of properties and there can not be extensive repair to the house. These loans are meant for properties that only need cosmetic repair.

Owner Financing

Owner financing refers to the owner of the property lending the money to the buyer of the property, takes a mortgage on the property sold and is repaid through monthly installments based on the terms between both parties. This type of “loan” is usually closed quickly, and the fees that other lenders charge are usually not included. The problem with this situation is most sellers cannot afford to maintain their lifestyle while they wait for the money, from the house they sold, to be paid in full. If the buyer defaults then the seller is forced to take them to court and add that additional headache to their life. This type of loan can get very complicated, very quickly.

Arizona Hard Money Loans

A Arizona Hard Money Loan is the most popular loan for real estate investors. This type of loan is backed by the borrower’s assets not their credit score. In fact, most hard money lenders aren’t overly concerned with a borrower’s income as long as they have the hard assets needed to cover the loan. They are interested in the return of their investment. Loans are typically closed within 3 days, down payments are negotiable, and often 100% financing is available. The interest rate is higher than other options (usually 7-15%) and they are short-term loans (3 months to 5 years).

House flipping can easily provide a healthy revenue stream.

Whichever financing method you choose make sure it is a method that will ensure you will be put you in a position to continue to invest.

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

The Benefits of Hard Money Loans

Not every loan is designed to meet every need. Understanding the benefits of Arizona Hard Money Loans can help you to use these loans to their greatest potential.

Arizona Hard Money Loans are designed to be short-term loans which is a critical factor that borrowers must understand. Using hard money as a solution to a long-term financial need is never a very good idea as the loan interest rate is very high. But aside from the higher cost of hard money loans, there are many advantages that can be well worth the higher cost of the loan.

From the start, Arizona Hard Money Loans are far less difficult to secure. The application process for these asset-based loans is far less complicated than the process of applying for a traditional loan. Banks and mortgage companies require many documents to prove the borrower’s financial status as well as his or her employment history and other personal credit information. But hard money lenders are more interested in the value of the property being used as collateral for the loan than they are the borrower's credit score or credit history. In most cases, the lender requests a few months bank statements, proof of employment and income and information about the property being purchased.

In addition to the reduction in paperwork required for hard money, there is also a far less stringent credit score requirement. Most traditional lenders would like to see a credit score of 650 or more to approve a loan application. But hard money lenders are much more flexible and will consider a loan request from a borrower with a credit score as low as 550.

Fast Funding is Big

One of the biggest benefits for hard money is the fact that most loans will process much more quickly than traditional loans. A bank or mortgage company will require several weeks or even months to process an approval and then even longer to fund the loan. But with hard money, the application process can be completed in just days and the funding can also be completed equally as quickly. So investors who need to make a real estate purchase quickly can have their loan funded in just a week o so rather than in a month or two as with a traditional lender.

Use The Loan Correctly

Hard money is a loan that is provided by a private lender and can offer a huge benefit to the right borrowers. The fast turnaround time of both the loan application approval and the funding is always a benefit to borrowers. In addition, the fact that the loan is based on the value of the collateral property and not the borrower’s creditworthiness is also helpful. When used as a short-term loan to fund a real estate purchase for a fix and flip or as a bridge to make an investment purchase prior to securing traditional funding, hard money offers great benefits for the cost of the loan. As with any loan, borrowers should read all of the loan documents prior to signing them to be certain that he or she understands the terms and requirements of the loan.

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

4 Simple Steps to Getting and Arizona Hard Money Loan

Getting funded through a hard money lender is much less stressful than the process of a conventional loan. Many people aren’t familiar with the process of getting a Arizona hard money loan.

First of all, if you are looking to obtain a Arizona Hard Money Loan but aren’t familiar with the process, take a deep breath. This is most straightforward and painless loan process in existence. This article will cover all the steps you need to take to get funded through a hard money lender.

1. Find lenders— You can use a hard money lender from any part of the country. You can find many lenders online and everything is done online. But, if at all possible, you want a local lender. You can find local lenders through word-of-mouth, networking at local real estate investor functions or simply preform a Google search. Make sure you find a few and then meet with them individually.

2. Have a conversation— Once you have narrowed it down to a handful of lenders, look into what terms they offer. You can usually find this information on their web site, however you will always get more information from speaking to them. The first part of the conversation will be concerning the borrower’s loan request. The lender will ask a series of questions to determine if they can fund the request. After the lender gathers the information necessary they typically can give a contingent approval and a preliminary quote. This quote is composed of the interest rate, points and any fees (such as processing or underwriting) they will charge. The next part of the conversation will be the borrower asking important questions. Some questions a borrower ought to ask a potential lender are: How long do you take to fund? Do you impose prepayment penalties? How long have you been in hard money lending? Are you a direct lender or a broker?

3. Apply— After you have chosen your lender your next step is to apply for the loan. The Arizona Hard Money Loan is very straightforward. You will have to provide documents such as: tax returns, bank statements and proof of your assets. Once the borrower is approved, the lender begins preparing loan disclosures. Some of the documents the borrower will receive are the Fair Lending Notice and the lender’s privacy policy. After the required disclosures have been received, signed and returned, the lender will prepare the loan documents. These documents typically include: Deed of Trust, Note and escrow instructions.

4. Down Payment and Escrow— After all documents have been received the borrower will send their down payment (if one is required) to escrow. As soon as escrow has verified, they have everything needed from the borrower the lender will fund the loan.

WHY USE A HARD MONEY LOAN?

There are numerous reasons to obtain a hard money loan:

1. You credit score is not high enough and your income doesn’t meet traditional lender’s requirements.

2. You don’t have enough capital to cover the renovation of the property.

3. You have a property investment but don’t have time to wait on a bank loan process.

4. You want to purchase a Arizona Fix and Flip property.

5. You don’t have enough cash to purchase a property.

How do you determine if a Arizona Hard Money Loan is right for you?

If you don’t have the time to wait for a bank loan or your credit has declined, a Arizona Hard Money Loan can fund you and get that property in your hands quickly.

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

Qualifications for an Arizona Hard Money Loans

Many borrowers are very surprised when they learn that the requirements to qualify for Arizona Hard Money Loans are much different than those of traditional loans. Understanding these differences can be very helpful to certain borrowers.

Because Arizona Hard Money Loans are asset-based, meaning the approval is based more on the value of the property being purchases than the borrower’s creditworthiness, credit scores are not a much of a concern as is the case with traditional loans. Rather than the borrower’s credit score is the most important criteria, the actual value of the property is more important. So in most cases, a credit score of about 550 is enough to secure most Arizona hard money loans.

The lender is going to require that the borrower show proof of an income that will allow him or her to make the loan payments for the hard money request. In most cases, this is done by submitting paycheck documentation or other income streams. The lender might also request a few months of bank statements to show that the income has been consistent and to track cash flow for other bills.

If the loan is being used to purchase a fix and flip property, the lender is likely to request information about the borrower’s level of experience in the fix and flip industry or the real estate business. This is to show the lender that the borrower has the knowledge, skill, and understanding needed to complete the renovation project as well as the ability to keep the project on the needed schedule for completion and resale. Some lenders will also as for a formally written exit strategy. This is often a detailed account of a contingency plan in the event that the project is not completed on time or if the property does not sell as quickly as expected.

The Property

Because the property being purchased is going to be the collateral for the loan, the lender is going to be very interested in the current condition of the property as well as the potential for the increase in property value. In the case of fix and flips, the demo involved in the early phase of the project can actually drop the property value for a time. The lender always wants to be certain that the condition of the property is not so poor that the demo could make the property almost worthless. Having a property with good potential for value increase is the best way to secure a hard money loan.

Know the Criteria

Private lenders are free to set any criteria that they choose to for borrowers. It is always best to ask each potential lender what his or her criteria are for hard money loans. This can help you to save time and money when you are applying for a loan. This information, along with the interest rate and a complete fee schedule from each lender will allow you to evaluate all of your options and select the lender and the loan that will best suit your needs.

Friday, January 18, 2019

Arizona Hard Money Loans in a Nutshell

Not every consumer understands Arizona Hard Money Loans or how they can benefit from them. But a small amount of information can explain the benefits and how to use them.

When you are denied for a traditional loan from a bank or other lender, it can be very frustrating and it can feel like your dream of owning a property has come to an end. But there is an alternative type of loan that is very helpful for many borrowers. Arizona Hard Money Loans are short-term loans which are funded by private lenders. Normally the loan term is around a year but the loans can be as short as a few months or extend up to around the five-year point. The loan terms will outline the payment schedule but in most cases, a monthly payment will be due.

The amount of the loan is based primarily on the value of the property that is being purchased. This is called asset-based lending and means that the property, the asset, is being used as collateral for the loan. The reason that this is beneficial to the borrower is that his or her credit score is not the primary concern when the lender is evaluating the loan application. So borrowers who have a credit score too low to qualify for a traditional loan can still qualify for hard money.

As an asset-based loan, the lender is far less interested in the borrower’s personal credit, payment history, and overall creditworthiness. This means that there are far fewer documents required when submitting a loan application for hard money loans. In most cases, the lender will request a few months of bank statements as well as proof of income to verify that the borrower has the income and capability to make the loan payments.

Less Time Involved

With fewer documents required for the loan application, borrowers will be able to quickly prepare their documents and in return, the lender will be able to very quickly review the documents. In some cases, a traditional loan application can linger for months before being approved or denied while hard money can be approved in just a few days in some cases and almost always in less than two weeks. So for borrowers who need money quickly, Arizona Hard Money Loans are a great option.

Legal and Legit

Even though hard money is considered a non-traditional type of loan, it does not mean that the loan is not legal and legitimate. It also is no indication that the loan can be allowed to go unpaid as the loan documents are as legal and binding as any loan from a bank or a mortgage company. Hard money is just a different type of loan from a different type of lender which is used to meet a unique need for some borrowers. Understanding the terms of your loan agreement is always important and hard money is no exception. Be certain to read the entire loan document and seek legal advice if there is any aspect of the agreement that you do not understand before signing it.

Setabay Private Hard Money Lender

Saturday, January 19, 2019

What are Fix and Flip Loans?

Fix and Flip Loans—The Bridge Loan

Differences in Loans to Flip Houses in Arizona

Securing loans for flipping houses can be quite a challenge for investors. There are many loan options available to flip houses. It is important to distinguish the pros and cons for each type of loan in order to decide which is your best option.

Conventional Loans

Government Insured Loans

Owner Financing

Arizona Hard Money Loans

House flipping can easily provide a healthy revenue stream.

The Benefits of Hard Money Loans

Not every loan is designed to meet every need. Understanding the benefits of Arizona Hard Money Loans can help you to use these loans to their greatest potential.

Fast Funding is Big

Use The Loan Correctly

4 Simple Steps to Getting and Arizona Hard Money Loan

Getting funded through a hard money lender is much less stressful than the process of a conventional loan. Many people aren’t familiar with the process of getting a Arizona hard money loan.

WHY USE A HARD MONEY LOAN?

Qualifications for an Arizona Hard Money Loans

Many borrowers are very surprised when they learn that the requirements to qualify for Arizona Hard Money Loans are much different than those of traditional loans. Understanding these differences can be very helpful to certain borrowers.

The Property

Know the Criteria

Friday, January 18, 2019

Arizona Hard Money Loans in a Nutshell

Not every consumer understands Arizona Hard Money Loans or how they can benefit from them. But a small amount of information can explain the benefits and how to use them.

Less Time Involved

Legal and Legit

About Me

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