Setabay Private Hard Money Lender

Tuesday, April 2, 2019

When You Should Turn to Texas Private Money Lenders

Obtaining a loan isn’t easy. Lack of decent credit score and a reasonable debt to income ratio is what turns many people from traditional public lenders to private alternative options.

Being denied a loan can be the cause of many things. It could be an unstable financial history, or unreliability as a lender. It could be unstable plans or an architect who is unable to meet deadlines. It could also be lack of experience and risk of failure if the loan is for something like a fixer upper. Being denied for a loan doesn’t mean you should stop looking—it just means you should look other places.

Oftentimes, loans can be combined with one another. Or, as we reside in the age of technology, you can receive investors from crowdfunding websites. Other ways could be untraditional, like loans from friends and family, but all work. Turning to a Texas private money lender is another option, but private lenders offer both positives and negatives based on your situation.

Reasons to Turn to Private Lenders

Texas private money lenders are companies or individuals who invest in properties, usually using hard money. They approve candidates who wish to borrow based on the property’s value, potential, and chances for success. If your plans are solid and you have a reliable team, there is still a possibly to be approved by a private lender, even if you have been rejected by a public one and have less than perfect credit.

Another reason private lenders can be good to work with is because of their transparency. They will be honest with you if they do not like the project, and will be able to work with you a little bit more than public lenders like banks. For instance, they are known to work with lenders if they need loan extensions. These extensions can be anywhere from one to five years. With the ability to work more individually than public lenders, they can be a great option when seeking out a loan. However, private Texas hard money lenders have high costs that should be considered before jumping right in to a loan agreement.

Doing What’s Best for You

Hard money is a great option because it is fast, and the lenders who offer it can maintain some form of flexibility. However, their attractive qualities are countered by high interest rates and a short loan repayment period. In some cases, like those of fixer uppers, a short loan repayment period makes sense, and is usually preferred. Confidence in the repayment plan is essential because failure to meet deadlines could result in dastardly situations that would make it even more difficult to obtain another loan in the future.

If the cost of Texas private money lenders is too high, there are always other options or—other private lenders. Just because one private lender doesn’t work out, it doesn’t mean another won’t as well. As long as you understand the terms you are agreeing to, working with private Texas hard money lenders is common, and is often the solution many go to when seeking out a loan. If you are still unsure, or if your particular loan need isn’t something to be accomplished in such a short time frame, it’s always possible to hire a real estate attorney to look over the terms of the loan with you. Having a professional in the field can give you the confidence you need so you know that when you accept or reject a Texas hard money lender, you know you’re doing what’s best for you.

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

How Texas Hard Money Lenders Can Help You with Fixer Uppers

Fixing and flipping homes has become so common in popular media that there are a number of various shows dedicated to every variety of fixer upper, inspiring viewers to seek out easy ways to fix and flip their own properties for a profit. Read more below to find out what opportunities you can find with Texas private money lenders.

Chip and Joanna Gaines are one TV couple that has taken the world by storm, and have even evolved into their own brand. Watching the show, it’s easy to become inspired to seek out local properties with potential for profit. If you’re someone who doesn’t come from readily available wealth, like those running a highly rated and successful reality series, you can turn to Texas hard money lenders to help fund your project.

Private lenders that offer hard money do a few things differently than banks and other public lenders. With the ability to approve a variety of borrowers, as well as offer speed and flexibility, lenders that offer hard money are a great option for ordinary people looking to fix and flip.

How Hard Money “Lends” Itself to Fixer Uppers

Oftentimes, the ability to fix and flip relies on a market with available properties—and if the market is limited, with few properties with high potential value, the ability to compete on the market is essential. This is what makes Texas hard money lenders so attractive.

Unlike traditional lenders, private lenders who offer hard money are usually able to begin the loan lending process immediately—literally as soon as the day of, which is not something public lenders can accomplish. Public lenders can take as long as a month or more to begin the loan lending process which, if bidding on a competitive market, could be the difference between obtaining your dream property and having to start from scratch all over again.

Hard money is also lending itself to fixer uppers in terms of the repayment period. A short repayment period falls in line with the timeframe of fixer upper, given that it is renovated without any major problems and sells fast. Though, if the property isn’t selling on an ideal timeframe, it’s possible to work individually with your lender and work out an extension. It isn’t unheard of and part of what private lenders offer. Their tendency to focus on the value of the property as an investment compared to the borrower’s

How to Know if Private Lenders Are Right for You

While private lenders have a variety of attractive characteristics that make them great options in situations of fixer uppers, they are not for everyone. Because of their ability to work faster, they have much steeper interest rates—and they can be as high as 5% more than other lenders on the market. Experienced house flippers may be able to handle the extra costs.

However, considering how the higher rates will factor into the repayment period will be essential. Having a strong financial background is not always necessary when working with Texas hard money lenders, but it may be necessary to those flipping for the first time. After all, as much as we all would like to follow in the steps of Chip and Joanna, we all start somewhere, and just because hard money is a solution for some, it isn’t one for all.

BENEFITS OF HARD MONEY LOANS

Why choose a hard money loan when conventional loan interest rates are lower? That’s a good question.

Hard money and Arizona Hard Money Lenders play a unique role in the real estate investing world. There are numerous benefits to working with a hard money lender.

UNDERSTANDING HARD MONEY

When a borrower applies for a conventional loan the very first thing a lender does in run your credit history and check how many loans you have on your credit. If a borrower’s credit isn’t stellar and they have existing loans that typically puts a halt to the application process.

When a borrower applies for a hard money loan the priority does not weigh on the borrower’s credit score or the amount of active loans they have. Yes, a Arizona hard money lender generally does look at a borrower’s credit—however, a low FICO score is rarely a red light on the road to approval. Arizona Hard Money Lenders aren’t concerned by the borrower’s number of loans that are active—they are focused on the value of the property because that is the hard asset that backs the loan—that is the collateral.

Another major component to financing a project is renovation costs. Conventional lenders don’t typically finance renovations. Conventional loan underwriting is very rigid with many stipulations. On the other hand, a hard money lender will put out draws to finance the rehab of the property.

There are countless benefits to working with a Arizona Hard money lender.

The benefits of hard money lending is not only that the focus is shifted from a borrower’s financial situation to their assets and that they will use property as collateral while financing the renovations. Arizona Hard Money Lenders generally do not impose early payment penalties, as well. That can be a life saver to an investor who quickly rehabs and sells the property. Hard money underwriting is more lenient which speeds up closing dates. This is important because it doesn’t matter how rich you are or how great your credit is—the process of getting a conventional loan is long, tedious and a general pain. Using a hard money lender, a borrower can close their deal in less than two weeks—and in the real estate world quick closes are everything.

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.

How Texas Bridge Loans Can Help Surprise Your Significant Other and Make for an Easy Move

Read Jim and Jenna’s story below to find out how to “bridge the gap” between homes so that you can move into your dream house without having to find an alternative, transitionary moving space in between it all.

Jim was in love with his long-time girlfriend Jenna and wanted to surprise her with their dream home. They’d already committed to living together long-term, but their current home was causing them all kinds of problems: dripping sink, outdated tile, unreliable air conditioner. And, the fire alarm had yet to alert them of one too many pitas that had been forgotten in the oven.

It was time to move.

Jim wanted to surprise Jenna with a new home, while also easing the moving process. As he was looking over his options, he found himself looking away from contracts and contingencies that he had to sell his current home first. He soon came across Texas bridge loans and found that they didn’t have contingencies and allowed prospective homebuyers to find their dream home, and then work to sell their current.

This would help Jim surprise Jenna. If he didn’t have to work around any stipulations that he had to sell his current home first, he could invest all of his energy in finding the perfect home—and the perfect engagement.

How to “Bridge the Gap”

“Bridging the gap” would require Jim to use the down payment on his current home to be used as a loan for his next home. Doing this would mean paying two mortgages and paying interest that was two percent higher than the general market. It wasn’t cheap, but Jim wanted to take a risk. Taking the risk give Jim the freedom he desperately wanted for both his home search and proposal planning. There was a little bit of pressure for Jim to fix the problems with his current home immediately, so that it would increase its ability to sell on the market. While it could mean extra costs, Jim had a few personal connections that wouldn’t cause a huge dent in the budget. He couldn’t wait.

Success and Eligibility

Texas bridge loans require that the borrower have a solid financial history. Fortunately for Jim, he had a great credit score and great debt to income ratio. He was thankful he was able to be approved so easily, because he knew it certainly wasn’t the case for everyone. And while he could afford two down payments, it wasn’t a decision he made easily. He figured that surprising Jenna as they moved forward into the next steps of their lives would be worth it. With the help of his personal connections, he was able to fix the problems in the current house—right under Jenna’s nose. She had no idea he was home searching until he found the perfect two-story with a rose garden and white picket fence. He proposed under a trellis in the backyard, and proposed they move in immediately. Jenna said yes.

GET A ARIZONA CONSTRUCTION LOAN USING HARD MONEY

A Arizona Construction Loan can also be called spec home financing. These are loans that are given to investors who are going to build a property.

Most banks are not comfortable lending on a property that is “speculative”—meaning the building of the property is a plan, but there is no property to speak of yet. And, the investors are building to sell for a profit.

Maybe you already have the land the property will be built upon—now you have to get the financing that will allow you to actually build the property. If a bank isn’t going to approve you for financing, who is?

HARD MONEY LOANS FOR SPEC HOMES

After you have done all your planning and gotten all your permits in order, you are what is called “shovel ready.” You are ready to start breaking the ground and building. This is where most Arizona Hard Money Lenders are ready to get involved in the project. All plans need to be approved by the city you are building in—the zoning must be handled. A hard money lender does not want to get involved in a mess. They want to see proof that the investor is authorized to build before they approve a Arizona Construction Loan.

Arizona Hard Money Lenders requirements are a little different than banks when applying for a conventional loan. Banks require a large amount of various documents such as proof of employment—typically from the last three years, proof of all income, a breakdown of your assets, W2s from the last several years and so on. Hard money requirements are a little different in the hard money spec loan department. Arizona Hard Money Lenders aren’t seeking a 750 credit score and are more lenient on job history. They will look at tax returns and bank statements. However, they look at the overall project versus focusing so much on your income and credit. These Arizona Hard Money Lenders focus on specialized projects. It helps to have experience on your side—however, the project and the profit that is projected is what Arizona Hard Money Lenders are looking at.

Knowing how the world of private money investment is crucial before jumping into a project that requires funding.

First, have all the construction plans approved. You must have a construction budget. Many lenders do due diligence and have a third party construction management company perform a budget review—to make sure the budget is in line with realistic costs. Lenders may also conduct a future value appraisal that is based on the plans of the property. Expect that lenders will finance 65% of the future value of the property.

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.

Monday, April 1, 2019

WHAT IS HARD MONEY?

Hard money in Arizona and soft money can be used to describe coins and paper money and money used in political campaigns. However, it can also have to do with loans.

A hard money loan is a specific asset-based loan through which the borrower receives funds that are secured by the value of real estate. Texas Hard Money Loans are typically issued by Arizona Hard Money Lenders or companies. Anything that refers. To “hard” refers to something tangible—in this case the tangible item is the property.

Many people have a negative connotation with the phrase “hard money.” They can’t seem to get past the higher interest rate. You have to realize that although Texas Hard Money Loans do have a higher interest rate, these are short-term loans. It is very possible that these loans may only be two to three months. So, it is very feasible that you may only pay a few hundred dollars in interest.

BENEFITS OF HARD MONEY

Arizona Hard Money Lenders are generally lending money on properties that require repairs. Other lenders, such as a bank, won’t lend money for these types of properties.

The money is much faster in regard to a hard money loan. A bank can easily take 60 to 90 days to close on a loan—whereas, a hard money loan typically closes in less than two weeks. All a lender really needs is an appraisal and a repair list—viola, it can close and you can claim the title.

Real estate investors who are working volume use hard money, because there is literally no other way to buy multiple properties to rehab. Generally lenders will lend 70% of ARV (after repair value). What that means is if a property costs $70,000, but will appraise for $125,000 after repairs are made—the hard money lender will lend 70% of $125,000—which equals $87,500 on a $70,000 property. This can fund the acquisition and repairs, as well.

Arizona Hard Money Lenders will also lend more the repairs if necessary. However, you won’t receive a check for $40,000 if you have figured out that is the amount of money you will need to rehab the property. Instead, Arizona Hard Money Lenders use “draws.” A draw is the money that will be loaned to the borrower for repairs once an estimate has been given.

Using a hard money lender can allow a borrower to not come out of pocket at all if the price is right on the property.

Although, an investor can find a project that they do not have to come out of pocket a penny—that does require finding that golden deal. There are lenders that will loan 90% of the ARV—and occasionally, you can find funding for even more. However, when looking at properties keep your expectations at 70% ARV. And, remember these are short-term loans that also typically have no early payment penalty. It is quite possible, when all is said and done, the only money you will use out of pocket is your payment on interest.

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.