Setabay Private Hard Money Lender

Saturday, January 26, 2019

The Differences Between Arizona Rental Property Loans and Home Loans

There are several differences between a loan for a home you plan to live in and a loan you plan to use as a rental property. Let's take a look at them and see what they mean for you as a real estate investor.

Looking to make your first rental property purchase? It can be daunting, even if you've bought a home in the past. After all, this is a business venture, not a home purchase. So, you'll need to know the basics of getting financing before you take your first steps. Let's look at some of the main differences between the two:

● You'll have to put more money down for a rental property. Because traditional lenders consider Arizona Rental Property Loans a bigger risk than a conventional mortgage, they'll ask you to put more money down. We're talking about a minimum of 20 percent, but it could be as much as 40 percent depending on a range of factors.

● You won't need mortgage insurance. With a typical home purchase, you must buy insurance on the mortgage. With a Arizona Rental Property Loans, there's no need to do that.

● Interest rates are higher for rental property purchases. While many traditional lenders will claim that their loans on investment properties are just 0.25 percent to 0.5 percent more than their mortgages. Not in the real world. In the real world, you'll end up one to three percentage points higher.

● You'll need a minimum of three months payments in your account to apply for an investment property loan.

Alternatives to Arizona Rental Property Loans from the Bank

One alternative to a conventional bank loan is a hard money Arizona Rental Property Loans. With a Hard Money Loan in Arizona, the risk is tied to the collateral, so approval is based less on credit scores, incomes, and past history, and more on the property's value or potential value. These types of loans can work as bridge loans to get you started on the purchase and repairs of the property until you secure longer term financing.

Hard Money Arizona Rental Property Loans in Arizona

If you're looking to invest in a rental property in Arizona and you're considering a hard money Arizona Rental Property Loan, Level4Funding may be able to help. We offer a lightning-fast approval process (24 hours), loan-to-value (LTV) of up to 90 percent, no prepayment penalties, and rates starting at only 7.99 percent. Call us today to talk about partnering.

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.

What you Need to Know When Seeking Arizona Rental Property Loans

Making extra cash by renting out a property is definitely doable. However, for first time buyers and flippers, it’s important to evaluate all the situations before becoming indebted to a flop.

Obtaining funding from traditional lenders like banks and credit unions is easier when you have a strong credit score and a history of successful fixer uppers. Traditional lenders aren’t flexible like Arizona Hard Money Lenders when it comes to lending out money, due to the risks that accompany possibly unreliable borrowers. For those who may not qualify for traditional financing, Arizona Hard Money Lenders are private companies or investors who will lend money to people with imperfect credit scores, but with a cost: high interest rates and fees. Not to mention, a quick repayment period.

Many experienced people who fix and flip houses utilize services offered by Arizona Hard Money Lenders. They are usually able to afford higher rates, and with a fast sale are usually able to satisfy the needs of a quick repayment period with the sale of the flipped home. Not everyone will be able to meet these requirements, especially first time flippers. While they offer flexibility within the relationship, transparency, and general speed, the high costs can be risky for people delving into the housing market for the first time if proper research isn’t done regarding renovations. If you don’t have great credit, comparing traditional and untraditional lending options may seem like the first step to delving into the loaning process. However, untraditional hard lending money options do not compliment a long-term rental property where cash is coming in over a lengthened period of time. Their quick repayment period would make it difficult to repay, unless you had some extra cash on hand. Chances are, your needs of a loan eliminate that as an option.

Requirements of Arizona Rental Property Loans

Other things to consider are down payments, cash reserves, and mortgages. Traditional loans for rental properties will require a 20% down payment, and a cash reserve of at least 6 months. Another strong stipulation of banks is that they won’t approve more than 4 mortgages. Depending on your situation, a mortgage for a rental may disqualify you. Equity line of credit, the Federal Housing Administration FHA, or Veteran’s Administration VA are other sources to look into when the short repayment periods of Private Money Lenders in Arizonaand the strong stipulations of traditional public lenders aren’t working out.

Realistic Expectations

Renting out a property isn’t as simple as just collecting the rent. In addition to obtaining the Arizona Rental Property Loans, there are other things to consider. Factors such as home owner’s association, utilities, and possible renovations are other sources of potential financing. Being accountable and aware of your cash flow is going to make the process of financing a rental so much easier and save you stress in the long haul so that, when it’s time to collect your check, you can put it to good use.

Why Arizona Private Money Lenders Can Be a Better Option Than the Bank

Many real estate investors go directly to the bank to get their financing because that's the accepted route. But in some cases, a loan from a Arizona Private Money Lenders may be a better option.

How do you know when you should go to the bank and when you should look for private investors? To determine this, let's look at some of the ins and outs of both loans:

● A bank loan will require an in-depth rummaging through your financial history, a bright, shiny credit score, and a pretty sizable down payment. You'll probably be rejected if you've had a previous blemish on your financial track record, a credit score below 700, and an income that doesn't match their threshold.

● A private money loan is secured using collateral, so your history, income, and credit score play a much smaller role. If the collateral property — whether it's a currently owned property or one you're purchasing — passes the sniff test, you can get approved.

● Bank loans can take up to a couple months to go through the approval and granting process.

● Private loans can be in your account in a matter of weeks. The approval process is quick and the funds don't have to go through all sorts of red tape.

● Bank loans come from giant conglomerates that may or may not have a vested interest in your success.

● Private money loans use funds from individuals who hitch their wagon to your plans. Your success is their success.

Is a Arizona Private Money Lender the Right Option for You?

Now that you know some of the differences between Arizona Private Money Lenders and the bank, you'll have a better idea if it's the right move for you. If you've got amazing credit, a spotless history, and plenty of dough to plunk down on a property, the banks may be your best option. Conversely, if you need to move quickly on your investment opportunity or you've been turned down by the big financial institutions, going the private route may be the better option.

Finding an Arizona Private Money Lender in Arizona

Hard Money Loans in Arizona do come with much shorter terms and higher interest rates and that can feel scary at first blush. However, for the right situation, this arrangement can be a win-win for both the real estate dreamer and the Arizona Private Money Lenders.

Why Arizona Airbnb Loans are the Hottest Thing on the Market

It’s very common to rent out a traditional home or apartment. Now, because of the new travel market, people are taking advantage of Airbnb, a service that allows people to rent out their living spaces to travelers.

Airbnb is a company that allows people to rent out their living spaces to travelers visiting the area. Compared to hotels, services offered by Airbnb can be a lot cheaper and individualized to a specific traveling party. Airbnb may also be an alternative to those traveling last minute with nowhere to stay because of booked hotels. People located in touristic cities may find it beneficial to rent out part of their living space should they be seeking extra cash or ways to add to their savings.

Most people who host their spaces through Airbnb live in it simultaneously with the traveling party, designating particular rooms or areas in the home to guests. It’s not uncommon to see Airbnb hosts interacting with guests as a type of tour guide, giving out advice on places to see, eat and explore. That experience is certainly different from that of a traditional renter-landlord partnership, and requries some customer service skills. Having the ability to impact someone’s experience in a positive way as they explore a new city is just one way this relationship will differ from traditional renting scenarios.

Things to Consider for an Arizona Airbnb Loans

The popularity of Airbnb is steadily rising, making it a great investment option. Still, there are some things to consider. Accommodations are important, as you’re aiming to offer services comparable to a hotel. Having things like extra towels, running water, and space for luggage are just a few thingsto think about. While you will likely have a majority of the needed accommodations in your home, it is important to think of your space as the service you are providing, making it comfortable and reliable so that your place is up to par with the demand of travelers. If you don’t feel your space is appropriate, you may consider Arizona Airbnb Loans for small renovations.

Taking Advantage of the Market with an Arizona Airbnb Loans

Maintaining a high score on the app will drive the demand of visitors to you, and could eventually lead to partnership with Airbnb, where you could qualify for funds offered by the company itself. In ensuring the company is offering the best services and hosts possible, they’ve begun Airbnb Select where they offer Arizona Airbnb loans. In helping you maintain a great space, they are maintaining the integrity of their company. Otherwise, things such as personal loans or other short-term loans may come in handy if any small renovations need to happen. If you are considering hosting with Airbnb, your space is likely already accommodating and, with a decent credit score, you will likely be approved by a traditional lender for a small loan. Beginning to offer services through Airbnb is definitely doable, as seen by the hundreds of thousands of listings online.

How to Get Arizona Construction Loans to Build your Dream House

Building your dream home will be a long process of planning, but it can be done with hard work. There are specific loans designed to lend you a helping hand when you need it most.

Arizona Construction Loans are short-term loans for people on the market to building a new home. They are not given out all at once, but given in increments after meetings with the borrower and home builder, and strong regards to schedule. Ultimately, the loan is given out with each progressive step of the building process. Planning is very important, and because the lender cannot view the value of the home unbuilt, budgets, schedules, and progress visits are compromised with the lender who is heavily involved in the process. Staying on schedule will be important to both you and the lender because fees may increase with missed deadlines and a slowly moving timeline.

Being approved means having a solid plan and production schedule, but also a credit score of 680 and, typically, a down payment of 20 percent. Providing a strong financial history is crucial because proving that you are capable of simultaneously paying extra bills is as important as proving the home will actually be completed.

Receiving funds from a lender may happen with a strong credit score, but it won’t happen with weak plans. Your lender will be interested in reviewing everything your builder touches before handing over a loan. This will help ensure them that the money is going to use at a solid project with qualified people. Lenders providing Arizona Construction Loans are much more involved than other lenders working with other types of loans. In this case, your lender will be very influential regarding the builder, plans, etc. Their approval of your builder and architect will be absolutely necessary. If they don’t believe in your production members, your loan may never be approved. Your lender will likely be a traditional public lender, such as a bank or credit union, whose familiarity with the community makes them a great option for borrowers looking to build in the area.

Types of Arizona Construction Loans

A construction-to-permanent loan converts the loan into a mortgage after the home is complete. With a construction-to-permanent loan, there is only one closing process. A construction only loan is the opposite. Closing costs are paid twice, because the loan is split into both construction costs and a mortgage, requiring the fee twice. Whatever your choice, repayment will begin when construction is complete.

Moving into your Dream Home

Using Arizona Construction Loans to finally move into your dream home is a great option, but one that comes with hard work. Understanding everything that goes into planning, building and scheduling is important because of the way these loans are given out. Finding a strong team of home builders will be important because architects that can’t meet deadlines will hurt you in the loan process. It’s possible to get the white picket fence, but first comes work and planning.

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

Owner-Occupied Hard Money Loans in Arizona

If any of those reasons resonate with you (or you've got your own reasons), you're probably wondering about the specifics. These types of loans are incredibly quick. The application takes minutes and the funds can be in your account much faster than a bank loan. Interest rates vary, but they are typically in the six to 12 percent range. To qualify, you'll simply need a tax return or 3 months of bank statements.

Level4Funding and Owner-Occupied Hard Money Loans in Arizona

Our owner-occupied Hard Money Loans in Arizona have no pre-payment penalty, they don't cost anything to apply for, and we guarantee the lowest rates in the business. Speak with one of our representatives or fill out one of our quick loan applications today!

How to Apply for a Residential Hard Money Loan in Arizona

Thinking about finding a Arizona Residential Hard Money Lender in Arizona to get financing for a single family home? Delving into the world of residential loans can be daunting, so let's demystify it by taking a look at the first step in the process — applying.

Hard Money Loans in Arizona use funds from private investors and individuals and are secured by collateral. As such, the application process is different than a typical bank or credit union loan. A big bank might ask for a pile of documents to verify every dime of income, show every asset, and prove that your credit score is up to snuff. With hard money, here are some of the common steps you'll go through:

Find a reputable lender. An upstanding lender will have a professional website, an easy way to contact them, and, most importantly, a proven history of funding successful residential projects.
Do your research. If you're making an investment in residential real estate, you'll want to know every detail about it — what's its growth potential? What is the market's history in the area? What will your after-repair-value (ARV) be?
Show the value of your collateral. Since collateral is the lynchpin of a Hard Money Loan in Arizona, that's where lenders will focus. You'll provide documentation that shows the value of your collateral property. This can include things like architectural plans, contractor bid sheets, detailed budgets, and plans for renovations.
Prepare other documents. In most situations, the above documentation will be all you need. In some cases, though, Hard Money Lenders in Arizona might ask for a few other documents, including paystubs, W-2s, credit history, or bank statements.

Moving Quickly on Your Residential Investment

Here's the best part about opting for a Arizona Residential Hard Money Lenders over a common bank loan — the process is really fast. Without complicated underwriting processes and all sorts of verifications, Hard Money Loans in Arizona can be approved in a matter of days and you can have the money in your account in a matter of weeks. That speed means you can move quickly on an investment opportunity. After all, the faster you can get started, the faster you can make a profit.

Apply for a Residential Hard Money Loan in Arizona Today

The application process is easier than you might think. An Arizona Residential Hard Money Lender in Arizona, like Level4Funding, can sit down with you, walk you through the process step by step, and help you get the funding you need for your project.