Setabay Private Hard Money Lender

Thursday, February 7, 2019

Things To Consider With An Arizona Bridge Loan

(An Arizona Bridge Loan is a great tool for both homeowners and real estate investors. They offer the opportunity to leverage the equity in a property that you currently own.)

An Arizona Bridge Loan is a financial tool that allows for the use of equity in a property without actually having to sell the property. These short-term loans can be used when a homeowner wants to move to a new home but must also sell his or her current home to make the move financially possible. The loan is actually working as a bridge between the two transactions as it is not always possible to coordinate a sale and purchase of something as large as a home.

These use of a short-term loan can allow you to move directly from your old house to your new house rather than moving into a rental. If your old house sells quickly then you could be forced to move into a rental while you find your next home to purchase. This is not only stressful, but it can be very expensive to pay rent plus storage fees as well as paying the movers for two moves instead of just one.

Short term loans, also called Hard Money Loans in Texas, also offer the benefit of funding very quickly. The loan is based on the equity in your current home, and because of that it can be approved and funded in just days. This is a huge benefit over the time it would take to secure a traditional mortgage which is based on your creditworthiness and debt to income ratio. Even when banks are not interested in loaning you money due to your income or outstanding loans, many private lenders are happy to offer hard money.

Drawbacks of an Arizona Bridge Loan

Short-term Arizona Hard Money Loans offer some great benefits but those services do come at a higher price than a traditional loan. The interest rate is going to be several points higher than a traditional mortgage loan, and there are going to be other fees as well. Private lenders have more freedom to structure the loans as they choose, but most will charge interest, points at the finding of the loan and a few fees to cover the administrative costs as well as the inspections fees. But the news is not as bad as it may first appear, because you will only be paying this higher rate for a few months in most cases.

Some Good Advice

Using an Arizona Bridge Loan can be a very wise choice even though the cost is a little more than a traditional loan. In many cases, these Arizona Hard Money Loans are used when a traditional lender is not willing to fund a loan. And that means that hard money from a private lender is the borrowers only choice. So it is better to pay a little bit more than to miss out on a great deal. Borrowers just need to be certain to read the entire loan document and understand the agreement prior to signing it.

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.

Wednesday, February 6, 2019

An Arizona Bridge Loan Can Be A Win-Win Solution

(An Arizona Bridge Loan can solve a very unique problem for many homeowners. It could be your solution when selling a home and buying a new one.)

It can certainly be very difficult to coordinate the sale of your current home to close one or near the same date that you are purchasing your new home. And it can be equally as challenging to sell your home and then move into a rental while you search for your next home. And even worse for many homeowners is the thought of carrying two mortgages while they hope that their old house sells. The simple solution is to secure an Arizona Bridge Loan that will get you through this challenging time.

An Arizona Bridge Loan is a short-term loan that does just what the name says, it helps to bridge the time period between two home sales or other financial transactions. In some cases, the first transaction is buying the home and the second will be quickly selling it after a fast renovation. These fix and flip projects are great for short-term loans rather than a tedious traditional mortgage. And the 12-month term on a bridge is also a near perfect fit for a fix and flip or for a traditional buyer who is waiting for his or her first home to sell.

In addition to flippers, traditional buyers like to use these short-term loans when they are downsizing. In most cases, the homeowner has substantial equity in the current home and can use that to secure the Arizona bridge loan to purchase a smaller home. That allows for time to move into the smaller home and make the needed repairs and tidying up projects to the old house before listing it on the market. And of course, it is much nicer to only need to focus on finding your next perfect home rather than also trying to worry about getting your current home ready to sell.

Securing A Short Term Loan

Getting any type of loan can take some time, so you need to begin the process as soon as you start looking for a new home. It is always nice to know that the process is moving forward in case you find your dream home very quickly. Some mortgage companies offer these short-term loans to bridge a gap for customers but not all do. You will need to inquire with your lender to know if you can finance with your current mortgage holder or if you need to find a short-term lender.

The Bridge Process

Once you have found your dream home and secured the short-term loan, you are ready to move and then get your current home ready to sell. During this time, you will actually own two homes and have two loans out against them. But in most cases, homeowners only make a few payments on the bridge before they sell their old house. The proceeds of that home sale are used to pay off the short-term loan and any interest owed, and the rest of the money is yours to apply to your new house or to invest or save if the new house is going to be paid in full. This short-term loan is a great resource to assist you in a complex process of selling and buying a new home.

COMMERCIAL HARD MONEY LOANS WILL HELP YOUR CAPITAL NEEDS

Investors use hard money when an opportunity arises and they need to jump on it quickly before someone else grabs it or when they need to bridge a gap between where they are right now and where they want to go.

Hard Money Loans in Arizona can be referred to as many things— one such thing being a bridge loan. They are called this because in essence they are bridging an investor from one opportunity into another. These are the same type of loans that investors take out when they are flipping homes or commercial real estate—such as a mall or an office building.

When you apply for a traditional loan at a bank they generally look at the last three years of your businesses financing to see if there is enough collateral and cash flow to satisfy their lending requirements. When these requirements are not met or when a business has not existed long enough this will result in non-approval of the loan. This is why there are Texas Hard Money Lenders.

COMMERCIAL HARD MONEY LOANS OPEN UP OPPORTUNITY FOR BUSINESSES

When a bank turns down a borrower for either not being established long enough or has insufficient cash flow a borrower can turn to a hard money lender. These business owners can use hard money. This is money that is used to transform a business to where it needs to be in order to obtain traditional financing.

Hard Money Loans in Arizona are short-term, interest-only loans that typically have loan terms from six months to three years. The terms are short because these loans are intended to only be a short-term fix. Once the business owner has the capital to bring their business up to par, they can secure long-term financing.

A good example of when hard money lending may be useful is when an investor wants to purchase an office complex that is vacant and needs to be rehabbed. Because there is no income being generated from this property a bank will not approve the loan. However, a commercial hard money lender will approve the loan and use property as collateral to secure the loan.

A hard money lender can explain many different hard money scenarios that can work for an investor’s unique situation.

CAN COME TRUE WITH PRIVATE MONEY LENDING FOR YOUR SMALL BUSINESS

Unfortunately, a small business can’t prosper without funding. Funding can come from many sources—such as family, friends and loans.

If you are fortunate enough your friends and family will have enough cash on reserve to help you grow your business. However, the reality is most of us do not know many people that can just toss us thousands of dollars to invest in our small business.

A business owner can take out a Arizona small business loan from the bank. However, banks require stellar credit and enough monthly income for them to feel secure loaning money to a business— and let’s not forget the agonizing process of a bank loan. A business owner can easily wait months for approval and funding from a bank.

WHERE CAN YOU GET A QUICK SMALL BUSINESS LOAN

Private investors provide small business owners loans with capital to get their project off the ground. These investors can make a huge difference in the success of a business. There are clear benefits of working with a private investor—the main benefit being the quick access to capital. Private funding serves small businesses that may not qualify for bank loans.

Capital is the most important factor of a small business—it is what makes or breaks a small business. Bottom line is a business cannot grow without money. It can be difficult for small business to obtain approval for a bank loan and without private lending many businesses could struggle to grow or even to keep their doors open.

Small business owners with poor credit or new small businesses have a great opportunity for obtaining a small business loan with private investors.

Private investors are a good alternative to traditional bank loans. Most banks are weary about lending to new businesses and frown upon business lenders with poor credit. Private investors are also referred to as Texas Hard Money Lenders. These investors will use the business owner’s commercial real estate as collateral for the loan. The property is used to secure the loan and protection in case the borrower defaults on the loan. This is great news for business owners that do not qualify for a traditional bank loan. The loan you receive is almost completely determined by the collateral that is offered to the hard money lender. Because private money, or hard money, loans are not available through the bank, you will need to find a local hard money lender. If you are a small business owner in need of financing, please contact us at level4funding.com.

How to Get Started with Arizona Construction Loans

If you’re building a new home or business, you’ll be looking for Arizona Construction Loans rather than mortgages. Get to know the basics beforehand, so you can move forward without delays.

Contrary to popular belief, getting approved for Arizona Construction Loans isn’t necessarily difficult, but the process is different than going to get a traditional mortgage. People use them all the time when they’re building new structures or doing major renovations, and you don’t need to have perfect credit or be a builder to get one.

Before you attempt to get approved, though, you’ll want to make sure you have three key things in place; the plans, a comprehensive budget, and permits. In other words, if you aren’t a builder or a contractor, you’ll need to have one on your team before you get started. All aspects of the build will need to be outlined with estimates from the contractors or subcontractors who will be handling each task. The plans will also be necessary to get permits, and the permitting process usually takes a few weeks by itself. Having an experienced contractor pays off here because someone who routinely works in your area will know exactly what the review process entails and what inspectors are looking for, so permits are issued promptly. However, the permitting process can stretch out longer if there are questions or if the project is especially complex.

You’ll also want to take some time to get your finances in order beforehand. Depending on how you go about getting financing, you’ll need to address how you’ll make a down payment, check your credit score, prove financial strength, and demonstrate that the build will be a financial success.

Find Out What Form of Lending is Right for You Before You Begin

It’s difficult to get Arizona Construction Loans through banks because they don’t make a whole lot of profit off them, and so they heavily restrict who they’re willing to lend to. You have to be an incredibly low-risk borrower in order to get approved, and even then, the terms might not be great. That doesn’t mean a bank won’t help you, only that it’s worthwhile to explore multiple funding options before your start paying for plans and permits out-of-pocket.

If banks won’t help, you can get your project off the ground with hard money.

One alternative to bank Arizona Construction Loans is hard money. With this method, you’ll still need to have some of your own cash in hand to get started, but you can get up to 90% LTV. Best of all, you can make interest-only payments on the loan during construction, and then either sell the property or approach a bank for a conventional mortgage after the build is complete, when they’re much more likely to help you out. You’ll still need to have plans, a budget, and permits to qualify, but things like your personal credit are less of a concern with hard money, so it’s much easier to qualify and get your project moving forward fast.

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 and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

HOW YOU CAN BUY A NEW HOME BEFORE SELLING YOUR OLD ONE

Sam and Judy had just put their home, of 20 years, up for sale. As, people do, when they are selling their home, they began looking for a new home. Luckily, or so they thought, they found the ideal house only a few days after putting their house up for sale.

When Sam and Judy found the home, they wanted to purchase they were so excited. Their realtor said it shouldn’t be a problem for them to put an offer in because they could put a contingency in the contract. However, that served to be a great problem.

The house Sam and Judy had decided on was a popular one. It was a steal of a deal and had more than one offer in on it. Unfortunately, the seller felt a contingency wasn’t necessary due to the fact that there were cash buyers putting offers in on the home. Sam and Judy lost that home and were feeling a bit concerned. The home they were selling had repairs that were necessary, and their realtor had warned it may be on the market longer than they were hoping.

WHAT YOU CAN DO WHEN YOU CAN’T COMPETE WITH CASH BUYERS

When a seller doesn’t want a contingency in the deal a smart move is a Arizona bridge loan. A bridge loan, as the name suggests, offers a bridge that allows a buyer to purchase a new property by using the home they currently own as collateral.

A Arizona bridge loan is also known as a “gap financing.” They are there for home owners who want to purchase a new home before selling the home they are currently in. Unless you have a large nest egg of cash, most people cannot buy a new home before selling the old one—and in a competitive market most sellers frown upon a contingency. It is very difficult to qualify for two mortgages at one time let alone pay on two mortgages.

This is where a bridge loan can be a buyer’s saving grace. A bridge loan can come from a hard money lender. A hard money lender will loan the money to you and usually give you a few months before a payment is due. Once due, the monthly payments are interest only payments. When the old home sells, the borrower will pay the loan in full in what is called a balloon payment. This allows the borrower to purchase their new home and have time to sell their old home without carrying two mortgages. Once the old home sells, the buyer has money to pay off the loan and pocket the rest of the cash as profit.

Typically, a hard money lender will finance up to 80% of the combined value of both the new home and old home. The other 20% or so usually comes from home equity or savings for the new down payment. There are lenders that will lend more than 80% but be prepared to have the other 20% handy.

Bridge loans can be a life saver for borrowers wanting to purchase their new home without waiting on the old one to sell.

Bridge loans take a shorter time to process than a conventional mortgage. Typically, these loans are approved, and funds are released in two weeks or less. These loans will have a slightly higher interest rate than loans from a traditional lending institution, however, remember you will only be paying interest on the loan until the last payment—the balloon payment.