Setabay Private Hard Money Lender

Tuesday, January 22, 2019

How to Secure Arizona spec home financing for Construction

Spec home financing is the term used for obtaining a construction loan on a property that does not yet have a buyer. They differ from a conventional loan in a few key metrics.

A spec loan is an industry term used for financing construction of a property, residential or commercial, that the builder has not sold yet. Spec loans are a small percentage of the total construction loans made. To secure an approval for your project you will need to do more leg work compared to a conventional lender. There are, however, lenders out there—as long as your project has good profitability. Due to the fact that Arizona spec home financing is a loan for a construction project that has no committed buyer, this type of loan is much riskier than other construction loans. If you locate land that is completely unimproved, you will improve your chances of qualifying for a loan, so you can build on the lot.

The project you choose should be able to be completed within a solid time frame. You want to look for an acquisition that can be completed quickly since construction loans are short term loans. They last only as long as the project lasts. The loan is paid out in draws with the consideration of the percentage of completion. By starting a project that can be completed quickly, you minimize the lender’s risks. Because the loan draws are based on a percentage of completion, they tend to be small in the beginning and increase as building ensues. You would be well advised to have a cash reserve before beginning your project.

The land is your equity. Using your land as collateral for Arizona spec home financing may increase your chances to secure the construction loan for your project. Some lenders may require you to put the land up for additional collateral for the construction loan. The land could even be used as your whole or partial down payment.

If You Do Not Have Experience, Bring in a Partner

To see yourself succeeding in securing the construction loan, you may want to consider bringing in an experienced partner to demonstrate to the lender your ability to complete the project and show a profit. Bringing in a partner with credit that is better than yours can also improve your chances of securing Arizona spec home financing for the project as well as demonstrating that the project is more creditworthy. If you are short on cash, bringing in a partner can also help with a down payment. They can also assist with improving the asset picture when applying for the loan, particularly if the debt to equity ratio would benefit. Lastly, know when bringing in a partner that you will be reducing your projected profit by giving a share to the partner you bring in.

Develop a business plan that is compelling.

Since you have not secured a buyer yet for your project, you will need to “sell” your lender on your project. You need to tell a story why your project will succeed as well as develop projected financials that are detailed and show how you will produce a profit. You will need to work hard to convince the lender that your project is a risk that he wants to invest in. You will need to develop where your project begins, what your view is as far as how you will develop it, and where the project will be at the end. Every lender will want to know your exit strategy—the “end of the story” that tells him how you will repay the loan. We, at Level 4 Funding, are happy to assist you in developing your strategy for a successful project. 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.

The Good, Bad, and the Ugly of Hard Money Loans in Arizona

For some people, Hard Money Loans in Arizona are fantastic options. This, however, is not true for everyone. Read on to know whether or not you should pursue a hard money loan.

At this point, you might be wondering what Hard Money Loans in Arizona actually are. If you are new to the real estate investing world, you may be unfamiliar with the term. In layman’s terms, they are short-term loans. The term of the loans range from one to five years. They are an alternative to conventional mortgage loans. Compared to conventional loans, Hard Money Loans in Arizona offer three main benefits to this type of funding:

1. Speed: When you apply with a conventional lender for a loan for real estate, it is a painfully slow process. As a borrower, you will need to adhere to strict requirements. Arizona Hard Money Lenders are less concerned with meticulously verifying the borrowers every detail, but more concerned with the collateral. Since the hard money lender is more concerned with the collateral, the process moves must faster, so the borrower can jump right on the property.

2. Flexibility: Compared to the conventional lenders, Arizona Hard Money Lenders do not use the same set-in-stone process. The hard money lender is more concerned in establishing and cultivating a relationship with the investor. Each project will be evaluated on the merits of the project. When seeking funding, the hard money lender you will be speaking to is an individual as compared to conventional corporate lenders.

3. Easy Approval: Most people utilize a Hard Money Loans in Arizona to fund their real estate project. The most important factor is the collateral to Arizona Hard Money Lenders. The credit score and financial history are not important factors. If you have located a property that you need to jump on immediately, your financial situation is not a deciding factor making funding that much easier.

Are Hard Money Loans in Arizona Right for Me?

If you have experience as a flipper or a first timer that has a working relationship with a contractor, and you are able to make a profit fairly quickly, then this is a perfect source of funding for you. However, for a number of people, this may not be a solution for you. Understand that the hard money lender avenue comes with higher interest rates, up to 15%, closing costs, points, (percentage of the loan amount) and organization fees.

At Setabay, we offer flexible terms and some of the lowest rates in the industry. We are able to provide these unique properties because of the hundreds of private investors that we partner with.

You have located an opportunity that needs you to move quickly before it is swept out from you. You may want to speak to an Arizona Hard Money Lender. Research lenders in the area that the property is in. If you go to a lender outside the area that the property is in, make sure that the lender offers loans in that area. Sit down with the lender and discuss the project. The lender will help you understand your options, find the right terms for your project, and will work with you to help make it happen.

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 Top Five Options When Seeking a Fix and Flip Loan

Real estate investors use Arizona Fix and Flip Loans for short term financing to purchase and renovate a property with the intent of selling it for a profit. These loans are for properties with fast closing and the property is in any condition.

Hard Money Loans in Arizona are the most popular type of Arizona fix and flip loans. In some cases, you can qualify in minutes, see your rates, and get funded within in as little as one week. Hard Money Loans in Arizona are popular loans used for these types of properties. They offer short terms and are secured by real estate. This type of loan is used by investors to purchase a property, renovate the property, and then sell the property within a year. Loans geared for fix and flip properties enable you to finance a property in poor condition. With Hard Money Loans in Arizona, the threshold for approval is lower than conventional loans and funding could be in as little as one week. The concern of the lender is more about the collateral than the background of the borrower. Here are five options for Arizona Fix and Flip Loans including the hard money lender.

Hard Money Arizona Fix and Flip Loans - Perfect for novice investors as well as experienced investors with 2+ flips.

· UP TO 90% Loan-to-Value and 80% after-repair-value

· Term 1-3 years

· Approval time 24 Hours, up to 15 days for funding

· Interest Rates: 7%-12%

· Fees: 1-5% -10% lending Fee, 2% - 5% closing costs

· Qualifications: 550 minimum score, 2-3 past Rehab Projects and Possible Licensed Contractor

Cash Out Refinance - If an investor has an existing investment with 30% to 40% equity.

· Financing up to 75% loan to value

· Term 15-30 years

· Approval 30-45 days

· Interest Rates 3.99% to 6%

· Fees 0% -3% lending fee, 2% - 5% closing costs

· Qualifications 640 minimum credit score, 45% debt to income ratio, 0-6 months reserves and Existing property with 40% equity

Home Equity Line of Credit - Investors who have an owner-occupied primary residence with equity of 30% -40%.

· Financing of up to 85%

· Loan term 25-30 years

· Approval/funding time is 30-45 days

· Interest Rates 4.5% to 5.5% variable rate

· Fees 0% to 2%

· Qualifications 640 minimum credit score, 45% debt to income ratio and existing home with 30% equity

Line of Credit for Investment Property - Investors who have a rental property who wish to cash out for other purchases.

· Financing up to 80% of cost

· Loan term up 75% loan to value

· Approval time up to 30days

· Interest Rate 5.2% - 6%

· Fees $75 annual service fee and 1% -5% closing costs

Arizona Bridge Loans - If you need to close quickly and will arrange more permanent financing later.

· Financing up to 70%

· Term 2 weeks to 1 year

· Approval 15+ Days

· Interest Rates 6.2% - 9%

· Fees $500 appraisal, 1%-2% lender fees

· Qualifications- Ability to pay 2 mortgages, 20% equity in current property and an exit strategy

Clearly, there are many options when choosing a Arizona Fix and Flip Loan for your property. We work with hundreds of investors at Setabay, many of which specialize in these types of loans. We are quick to funding and can close in as little as three days.

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

Monday, January 21, 2019

All You Need to Know About 100% LTV Commercial Real Estate Financing

100% commercial real estate financing is possible. Let’s take a look at what lenders look for when determining your eligibility.

This type of loan is used solely for income producing properties and is not for residential use. Some of the types of properties that you can obtain a 100% LTV commercial real estate financing for include shopping centers, retail malls, hotels, complexes and office buildings. Independent lenders and home mortgages are actively making loans on commercial real estate. Additional lending companies are pension funds, insurance companies, private investors and SBA loans. A small percentage of preferred lenders offer 100% LTV commercial real estate financing for owner occupied commercial properties—meaning that your business must occupy at least 51% of the property. This SBA loan is for established businesses only.

A mortgage is typically loaned to an individual borrower. Commercial real estate loans, on the other hand, provide loans to entities which include corporations, developers, funds, trusts and limited liability partnerships, all of whom are formed specifically to own commercial real estate. If the entity does not have a verifiable credit rating or financial track record, then the financial organization may want the principal’s personal guarantees. In the event of a default on the loan, the lender will look at the loan guarantors to recover the funds. If you obtain a loan without a personal guarantor, the lender cannot seek recourse with the principals.

Loan repayment schedules differ from one type of loan to the other. Residential loans are repaid over the term of the loans and are amortized over the life of the loan. Commercial loans range from five years to twenty years and the amortization period is usually longer than the loan. The lender will charge an interest rate depending on the term of the loan and the amortization schedule. Additional considerations for the interest rate are the borrower’s credit strength and the negotiable terms. Higher interest rates will normally be charged on longer term loans.

Loan to Value Ratios

Loan to value ratios are another way to differentiate commercial loans from residential. This is a figure that measures the loan to value (LTV) against the property. The lower the LTV for both commercial and residential loans, the more favorable interest rates the borrower will qualify for. The reason is that the more equity the borrower has in the acquisition property, the less risk the lender needs to assume. Commercial loan’s LTV fall into the 65% to 80% range. The rates will differ depending on the loan type, such as raw land versus rehabbed land. This means, of course, that you will usually be paying a higher interest rate for 100% LTV commercial real estate financing.

DSCR stands for Debt Service Ratio and is one of the ratios lenders consider when approving loans.

Lenders will look at the properties ability to service the debt by looking at the ability of the commercial property to service the debt, including interest. This is known as the Debt Service Ratio (DSCR). If the DSCR is less than 1 then this indicates a negative cash flow. Lenders look for loans with a DSCR of 1.25 or greater. Unlike residential loans, commercial loans carry higher interest rates. There are additional fees added to the overall cost of the loan which differs from residential loans. Some of the fees include appraisal, loan application, legal, survey fees and origination fees. Some of these costs are upfront fees. Restrictions may be built into the loan for disallowing prepayment of the loan. This is an important consideration as many investors are looking to turn properties quickly and a prepayment penalty can significantly affect the bottom line. If you’re looking for commercial real estate financing, call us at Level 4 funding for a no-obligation quote.

What You Need To Secure Rental Property Loans

All lenders are slightly different and have a variety of criteria required to qualify for a loan. But the criteria for Rental Property Loans in Arizona are very similar from lender to lender.

Securing Rental Property Loans in Arizona is a bit more challenging than getting financed to purchase a home that you are going to make your primary residence. But the added obstacles are certainly worth the effort to create a passive stream of revenue to increase your personal wealth and secure your future. Understanding how to be an attractive borrower and meet lenders criteria for Rental Property Loans in Arizona can greatly reduce your stress level and increase the speed of your loan processing and approval.

Down payments are critical when purchasing a rental property or any investment property. There is no mortgage insurance on investment property loans so you will need to make a down payment of 20% or more to secure most rental property loans. But if you can make a larger down payment, that will work in your favor. You will have instant equity in the property and that will make lenders more eager to loan you the money that you are requesting. The equity represents great security for you and for the lender as well.

Credit scores are always important when seeking traditional financing. And borrowers can get a loan for a primary residence with a score as low as about 600. But investment property loans require a higher credit score to secure at a reasonable interest rate. A rate in the 700’s is certain to get a borrower a respectable interest rate and favorable loan terms. If your score is lower than 700, you might want to wait to invest in a rental property and focus on increasing your credit score by lowering your debt to income ratio and increasing your savings.

Cash Reserves

Cash reserves are always important when you are financing an investment property. The lender wants to know that you have accessible cash to cover mortgage payments in the case of a vacant property and no revenue coming in. The lender also wants to know that you can afford to make any needed repairs should issues arise. Without the reserve to cover unexpected repairs, the property could sit empty for months with no rental income, making it very difficult to pay the mortgage, taxes, and insurance.

Real Estate Investing Experience

Having experience in the real estate industry is also a big benefit for borrowers. Lenders want to know that a borrower understands all of the potential issues that can arise with a rental property or an investment property. Borrowers who understand these potential challenges will be prepared for them and will not fail to make mortgage payments or allow the property to fall into disrepair and become worthless as collateral on the loan. For new investors, it can be very helpful to create a business plan for the rental property and to submit that document to the lender with the loan application to demonstrate that you have a well thought out plan for managing the property and remaining profitable and successful.

What you Need to Know About Arizona Residential Hard Money Lenders

Opportunities in residential investments have skyrocketed these last seven years. Funding, however, is not as easy as it used to be. Find out which Arizona Residential Hard Money Lenders offer the best rates and terms.

Traditional lenders offering home loans have been scarce since the credit crisis in 2008. Arizona Residential Hard Money Lenders have filled the gap that the traditional lenders have left. These types of lenders offer residential loans at higher interest rates and low loan to value on the property. When traditional lenders are hesitant to step in, hard money lenders are a very good option. The capital from Arizona Hard Money Lenders is available to every type of customer for real estate investing.

Private lenders base their lending on the loan to value ratio; traditional lenders base their credit decision on credit scores, income tax statements, and tax returns. Arizona Residential Hard Money Lenders base their decision on the property as collateral. As a basis for the underwriting of the residential property, the lender considers the equity in the property for their decision. Some of the Arizona Hard Money Lenders deal in land estates and projects with a high equity. Arizona Residential Arizona Hard Money Lenders base their decision by the Loan to Value using the current market value.

The money from An Arizona Hard Money Lender on a residential property acts as a temporary bridge for mortgage refinancing, avoiding bankruptcy or acquisition. This is an option many investors choose when faced with giving up control of the property to financial partners or filing for bankruptcy. A Arizona Residential Hard Money Lender offers people loans for renovation of the residential property and then renting out the property or selling it. The Hard Money Loans in Arizona is based on the value of the real estate property which is also the collateral for the loan. The loan is often 60-75% of the market value of the property. Typically, hard money residential loans can be found at interest rates from 11% to 12%, with 12% the standard for second trust deeds. The loan to value is 60% maximum on improved properties and 40% for vacant land.

Traditional Versus Arizon An Arizona Hard Money Lenders

Traditional lenders offer loans based on credit reports, income statements and tax returns. Traditional lenders base the interest rates and fixed loan amounts, and other terms and conditions, on the borrower’s eligibility. Hard money residential lenders provide funding based on the value of the real estate. The documentation is much lower than traditional lenders. Eligibility is flexible, even borrowers with poor credit and little documentation are able to secure primary residence loans. The loan to value ratio runs approximately 65%.

The values are determined on the property’s current market price. The hard money lender will fix the price at which the property is sold.

If the borrower defaults on the loan, then the hard money lender will seize the property and possibly sell it. In most cases, the lender will allow the borrower a grace period of one to three months before selling the property. The bottom line: investors and home buyers often use Arizona Hard Money Lenders to access Arizona Bridge Loans for residential home mortgages. These types of loans enable buyers to “bridge” from one loan to the next. Instances when these types of loans are beneficial include when someone wants to buy a house before their existing house sells and the market is such that a contingency offer will probably be passed over. At Setabay, we offer quick-to-funding Arizona Bridge Loans at lower than average rates. 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

Setabay Private Hard Money Lender

Tuesday, January 22, 2019

How to Secure Arizona spec home financing for Construction

Spec home financing is the term used for obtaining a construction loan on a property that does not yet have a buyer. They differ from a conventional loan in a few key metrics.

If You Do Not Have Experience, Bring in a Partner

Develop a business plan that is compelling.

The Good, Bad, and the Ugly of Hard Money Loans in Arizona

Are Hard Money Loans in Arizona Right for Me?

The Top Five Options When Seeking a Fix and Flip Loan

Monday, January 21, 2019

All You Need to Know About 100% LTV Commercial Real Estate Financing

100% commercial real estate financing is possible. Let’s take a look at what lenders look for when determining your eligibility.

DSCR stands for Debt Service Ratio and is one of the ratios lenders consider when approving loans.

What You Need To Secure Rental Property Loans

All lenders are slightly different and have a variety of criteria required to qualify for a loan. But the criteria for Rental Property Loans in Arizona are very similar from lender to lender.

Cash Reserves

Real Estate Investing Experience

What you Need to Know About Arizona Residential Hard Money Lenders

Traditional Versus Arizon An Arizona Hard Money Lenders

About Me

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