Setabay Private Hard Money Lender

Thursday, February 28, 2019

How Do Hard Money Lenders Stay in Business?

Ever wonder how Arizona hard money lenders make money? It’s not as complex as you might think.

Although Arizona hard money lenders offer more consumer advantages than banks, they have similar inner workings. These two financial entities work to serve consumers, can lend money, and turn a profit in comparable ways.

Banks make money through interest and fees on their accounts and loans. Fees can add up, allowing banks to make great profits and stay afloat.

Arizona hard money lenders also make money through interest, but specifically loan interest. These lenders don’t have accounts, so their profits are mostly made through interest on loans. When a borrower takes out a loan, lenders charge interest on it the same as a bank. The difference is that a hard money loans are backed by collateral, making them equity-based loans.

Equity-based or not, hard money loans and bank loans have the same basis. Money is lent to a borrower and he is charged interest until the money is paid back.

Therefore, money lenders always hope for clients to help them increase their profits. More clients mean more interest and more income.

Despite their hopes for profit, money lenders tend to work well with their clients and develop positive relationships with them. Depending on your situation, they could offer you a good rate on your loan, comparable or even lower than bank rates.

Because money lenders can tend to your personal needs, they are often easier to work with than banks. Banks have complicated loan processes and won’t always give you the rates you want. Money lenders can work with you to develop payment plans that meet your needs and make sure you’re on the right track. That’s personalized service that banks just can’t match.

Where Do They Get the Money?

Arizona hard money lenders are usually financially savvy and know their way around the real estate industry. The money lender Level 4 Funding is run by individuals with years of success in real estate. Those with experience in investment properties, home flipping, and home sales can accumulate a great deal of change, giving them a lot to lend out.

Money lending can be a profitable field for those who have the passion.

Dennis Dahlberg of Level 4 Funding had an idea and he ran with it. His money lending company has lent over $40,000,000 as of 2018 and is still going strong. After buying a home when he was just 18, Dennis earned years of experience in the real estate industry buying, selling, and renting homes. If you’re in the market for a hard money lender, check out Dennis at Level 4 Funding.

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 27, 2019

Running a Successful Apartment Complex: Our Best Tips

If you’re planning to run an apartment complex, there are some things you should know. Keep reading to learn how to be the best landlord you can be with Arizona commercial real estate loans.

A lot goes into running an apartment complex. You have to keep your residents happy by making repairs and maintaining amenities, and somehow also profit. That’s a lot to think about.

Here are some of our best tips for creating the best apartment complex in your area:

Have useful amenities.

Pools, laundry rooms, gyms, and common rooms are all plusses for any apartment complex. Tenants want to know that their rent is going somewhere useful. And, being able to get these amenities within the cost of rent is appealing to potential renters. On this note, make sure you maintain your amenities well so you can show them off to potential tenants.

Use appealing architecture.

Frankly, people don’t want to move into somewhere unappealing. Make your apartments look as good on the outside as they do on the inside by choosing colors that match your complex’s theme. If your complex is targeted toward younger tenants, a modern pop of color on the exterior could bring in new tenants. On the other hand, if you’re aiming for older tenants, a calming color may be more applicable.

Communicate with your tenants.

Communication is key to any successful relationship. If you want to build good relationships with your tenants, make sure you have open lines of communication with them, whether that be giving them your phone number or sending out mass emails with important information. Do you have events at your complex? Send them out so people know about them. Is there the potential for a rent raise? Make sure you let your tenants know with plenty of notice. Respect them and they will be more likely to respect you.

Insist on respect as a business practice.

If you have people working at your complex such as receptionists or cleaning staff, make sure they respect your tenants. One of the most common complaints about apartment complexes is disrespectful staff. Having staff that respects your tenants will help them feel more comfortable and be more likely to leave you positive reviews.

Use digital payment methods.

In the age of the internet, it’s very helpful for tenants to be able to pay online. People are all about convenience, so making paying convenient for them will make them more likely to pay you on time.

Cover more than just water.

It’s appealing to potential renters when their landlords cover several amenities. Covering more amenities than just water will bring in more renters, so you’ll profit more in the long run.

Funding Your Complex with Arizona commercial real estate loans

Arizona commercial real estate loans can help you finance your apartment complex and they are available at many hard money lenders. Private lenders can offer you more LTV and better rates than banks, as well as get you your money faster. Choosing a private lender for your Arizona commercial real estate loans can help you fund your apartment complex without having to pay for it all immediately out of pocket.

Get your hard money loans from Level 4 Funding.

Level 4 Funding is a hard money lender that specializes in real estate and cannabis business financing. They can get you Arizona commercial real estate loans at great rates and work with you to come up with a loan plan that fits your lifestyle. Visit their website and apply for a loan online today to get started on your dreams.

Monday, February 25, 2019

Bridge Loans: The Help That's Right for You?

Bridge loans allow investors and developers the opportunity get their unrealized projects off the drawing board and into reality. These loans allow investors to take advantage of opportunities when funding is unavailable, for reasons of bad credit, speculative projects, or if the investment property is in poor condition or suffering due to low occupancy.

Bridge financing acts as a bridge between a properties initial purchase and its eventual refinancing or resale. If a borrowers financial profile doesn't meet the bank's criteria, they'll face consistent denial. Loan officers might shudder at a project that seems particularly speculative, say demolishing a building to make way for a new development or if a property suffers under low occupancy or poor condition, in these cases conventional lenders are not going to risk getting involved.

The Benefits of Bridge Loans really shine in situations like the following

• Bad Credit: Say a developer took a hit on their last project. Work got stalled, and all at once his lender called his loan, and let us assume he defaulted. Now the site sits vacant, and his financial situation prevents him from getting another loan. He approaches a bridge lender and says "I only have a little work left here I just need a bit more money," after receiving bridge financing work on his development finishes, the banks are well pleased with all the extra income he's earning. Finally, he's able to refinance to a long-term mortgage, which pays off his bridge loan and allows him to enjoy a steady stream of income from his shiny new development.

• Speculation: Our developer sees a derelict factory in a blighted industrial area, where the local university will be building their new campus. Our developer is pretty convinced he can develop low-cost apartments in place of the factory and make a boatload. But the bank considers the area, and says no, as they can't see his vision. With bridge financing, our developer can build his apartments. They quickly reach almost full occupancy after the new campus opens allowing our developer to sell off the new complex, paying off his loan and earning him a tidy profit.

• Neglected property: An unscrupulous landlord has been nickel and diming his tenants for years, disgruntled renters have been steadily moving out, and the landlord seeing the apartments as being more trouble than their worth, puts the property on the market. Our buyer is convinced that with a few improvements and more reasonable management the property can quickly turn to full occupancy. But the bank considers the current state of the property and denies him his loan. With the help of bridge lender, our buyer manages to purchase the property, makes a few small improvements and under his patient care, the complex achieves near 90 percent occupancy. Just a few necessary improvements, and a little competence on his part and our investor can refinance, allowing him to earn a generous income from the once god-forsaken apartment complex.

In short, bridge loans can help your dreams come true

Without the help of bridge financing, none of the developers mentioned above would have ever seen their projects move. Bridge lenders are willing to speculate on a properties potential, looking beyond a borrower's poor financial situation, a projects seemingly speculative nature or a properties derelict condition.

Saturday, February 23, 2019

Bridge Loans: Fueling the Costs of 1031 Exchanges

1031 exchanges allow you to defer the payment of capital gains taxes by reinvesting your profits into another similar investment. Most industries lost out due to last year's tax overhaul, but not the real estate industry. Real estate investors can still indefinitely defer payment of income taxes on profits earned from their ventures so long as they roll those profits into the purchase of another investment property. But, there is a deadline you have to meet to qualify. If you need financing to purchase your next investment property, you might want to think twice about going to the bank. Learn why bridge loans are perhaps the best way to finance 1031 exchanges.

1031 exchanges are IRS policies and therefore regulated by perhaps thousands and thousands of opaque guidelines. For this article we are only going to focus on one: You have to secure the purchase of your next investment property within 120 days for your next purchase to qualify as a 1031 exchange.

With Bridge Loans you risk less when it comes to 1031 exchanges

Going to the bank could cost you dearly when it comes to 1031 exchanges. Remember that you only have 120 days to close on your next investment property. Day by day you lose assurance that you'll be able to acquire your new investment property on time.

For example, if you are an active investor in single-family homes and your recent sale just closed, you might consider investing in a small apartment complex. Of course, the sale of a house isn't going to cover the cost of purchasing an apartment complex, so you need financing.

You go to the bank, and the loan officer points out your lack of experience in this area. They ask for more documentation. Days plod by, documents pile up, and sure enough, the 120-day window closes. Now, you are on the hook to the IRS.

If the 120-day window passes, you will have to pay capital gains taxes on the profits you earned from that last resale. Depending on your earnings, this could end up being a significant expense.

If you need financing to secure the purchase of your next investment property to complete a 1031 exchange, spare yourself the worry and the hassle and go to a bridge lender instead.

Bridge loans offer real estate investors the flexibility and certainty needed to complete 1031 exchanges.

• Certainty: Bridge lenders underwrite their loans based on the value of the property you want to purchase, which simplifies the application process. When it comes to bridge lenders, loans can close in as little as a week, well within the 120-day time limit imposed by the IRS.

• Flexibility: Bridge financing is just that: a "bridge" between the initial purchase of an investment property and its eventual refinancing. You secure funding from a bridge lender, purchase your next property, complete the 1031 transaction on time, and then refinance to a cheaper permanent loan.

Banks aren't going to move any faster just because you have a critical deadline, and when it comes to 1031 exchanges, going to a bank could cost you dearly, so approach a bridge lender instead.

Bridge Loans: Tactics to Increase Eligibility

If you've had a difficult time securing financing for your next commercial investment property because the property is half-occupied or it is in decrepit condition, you should consider the benefits offered by bridge loans. Learn why this type of financing might be the help that's right for you and some approaches to improve your eligibility.

Conventional lenders don't like deserted or distressed properties. This isn’t the case with bridge lenders. Bridge lenders secure their loans based on a borrower’s experience and the potential of a property.

Bridge financing allows real estate investors to capture the long term and short term income potential of poorly-managed or distressed properties. Using bridge financing, an investor could purchase a half-occupied apartment complex, improve its condition, and increase occupancy. Once most of the units are occupied, the investor can then refinance to a conventional mortgage.

These loans also benefit developers who intend to resell distressed properties. The capital given by a bridge lender allows the investor to improve a property’s condition and then resell it for a tidy profit.

However, when it comes to bridge lenders, you need to do all in your power to prove the potential of your project and your experience as a developer.

Can you meet these basic eligibility standards when it comes to commercial bridge loans?

• Net Operating Income: The annual income of your intended property must be able to cover the cost of the loan on a yearly basis, so you need to have on-hand income and expense statements from the property’s current owner, as well as rent rolls and current lease agreements.

• Experience: Most of these loans exceed a million dollars, so not just anyone can qualify. You need to either have a resume on hand or be able to discuss your track record of previous real estate development projects.

• Savings: Having decent savings on hand is a must. Your lender will want assurance that you can carry your loan should things not go according to plan.

• Net Worth: Along those lines, your net worth should be at least equal to the amount of money you intend to borrow. Even if you aren't pledging your personal property as collateral, these lenders want assurance that you have assets on hand to carry your loan if things go south.

• Credit: Credit is only a factor if you intend to refinance. If this is the case, generally a minimum credit score of 650 is needed to qualify.

But above all else, bridge lenders are concerned with one thing: your exit strategy.

When it comes to commercial bridge loans, talk up your exit strategy.

Bridge financing is just that: a bridge. It is designed to be paid back either through refinancing or resale, so being able to discuss your exit strategy is crucial. Consider the following talking points to assure your bridge lender about your exit strategy:

• If you plan to refinance: Talk up unrealized income potential. Half-occupied commercial properties suffer due to low cash flow, and this means conventional lenders refuse to finance such deals. Talk up your plan to improve cash flow from the property you want to invest in, and have a clear strategy to increase occupancy either by making specific improvements or through better property management. Having a specific plan along these lines will give your prospective lender confidence that you will be able to refinance before the loan comes due.

• If you plan to resell: In this case, a bridge lender will be interested in your plan to bring the property back to marketable condition. Have a clear budget and timeline specifying the improvements you want to make, and cite comparable sales to give your lender concrete assurance that the final resale value will pay back the outstanding loan.

Talking up your exit strategy with these tips and keeping the basic eligibility standards in mind will ensure that you can take advantage of the unrealized potential of neglected or distressed properties with the help of bridge financing.

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

Thursday, February 21, 2019

How to Read Search Results for Arizona Hard Money Lenders

When it comes to finding Arizona hard money lenders, maybe you’re overwhelmed by your search results. Learn how to read between the lines of a lender’s web page so you can find the help that's right for you.

The first step in reading a lender is finding one first. Because it is the 21st century, Google "hard money…" and before you know it, you should have plenty of results. Make a list of potential lenders in your area, but before you read the lenders’ websites, read some customer feedback and cross lenders with negative or with little to no customer reviews off your list.

After narrowing down your list of potential Arizona hard money lenders, find lenders whose recent deals match your specific vision.

You've found several lenders who have decent customer feedback. Should you go ahead and apply? No, you've got a bit more reading to do to narrow your list further.

Check to see if your potential lenders have a list of recently funded deals. Do the properties match your vision? If you intend to flip a house, you should not approach a hard money provider who specializes in commercial properties. You want a lender who can offer insight when it comes to your specific project. Find lenders who specialize in funding your specific investment and then look out for some red flags.

When it comes to reading Arizona hard money lenders, don't ignore these red flags

• Read initial terms offered. Beware of pie in the sky deals. If a lender's initial terms are too good to be true, more than likely, they are. Avoid lenders whose conditions aren't anything close to what you've found on other hard money websites.

• Read the lender’s basic qualifications. If all that's needed to close your deal is your name and a handshake, be wary. Reputable hard money providers will at least glance at your basic financial situation. If a lender sets the bar so low that just about anyone can qualify, more than likely their only interest is in collecting your interest payments. Erase lenders off your list whose standards don't match the standards of other lenders.

• Read the lender’s website, but don't just look at the words. Is a potential lenders website well-designed, professional and appealing, or does it like it hasn't been updated since 1997? Cross a line through lenders whose websites are poorly designed and don't offer a lot of specific information.

• Read the lender’s physical location. If a quick Google search for "A2Z Hard money's," address reveals that their offices are located in a car wash in New Mexico, beware: you might end up laundering money for Walter White. Cross out lenders who don't have a physical office.

After following these steps, you should have a list of lenders who:

1. Have decent customer reviews.

2. Specialize in the type of project you want to pursue.

3. Have reasonable loan terms and borrower standards.

4. Have a professional website and a physical office.

You can perform all this due diligence from the safety of your laptop. Learning to read your search results for "hard money," will save you time and effort while protecting you from sheisters.