Setabay Private Hard Money Lender

Monday, April 8, 2019

Reality TV is Not Reality: Some Advice on Texas Fix and Flip Loans

Nielsen ratings rank HGTV as the second most watched cable network on TV. These well-produced shows might make flipping look like a path to easy profits. But, take out Texas Fix and Flip Loans with reality TV in mind and your first flip will likely be a flop.

Producers on these shows know that the majority of their audience only cares about design and decoration, but flipping is about investing and not designing. If you want to get into the flipping business, you can't ignore these facts:

• It takes time to find the right deal.

• Financing is limited and carefully structured.

• If a house doesn’t sell in time, it could be a disaster.

HGTV programs devote about three minutes to finding a property to flip and the conversation usually goes as follows:

"Hey, babe. Found a great place, in that neighborhood."

Usually his better half is in some distant office, with a laptop in front of her. She gives a cursory glance to some comps. “Well that's great! We could make this much," she says off-hand.

Then they close, while counting out the cost of repairs on fewer than five fingers. Their biggest obstacle seems to be choosing that perfect white subway tile for the kitchen.

Texas Fix and Flip Loans are given out in draws, so unexpected expenses can put your entire project in danger.

After the happy couples on these shows walk into a perfect deal, money never seems to be a big concern. They seem to have hundreds of thousands of dollars stashed under their mattresses.

About 10 minutes into the program, an issue will invariably pop up that will require an additional outlay of thousands more dollars. Somehow, this is no big deal.

"Hey, babe, there’s some insert problem here, and it is going to cost X amount of money to fix it." To which their better half will invariably will reply, "Oh really? Well, that sucks, but I guess we have to do it. Alright, well, spend the money."

Texas Fix and Flip Loans entail balloon payments, so there’s a lot at stake house doesn’t sell in time

The last five minutes or so of these programs are full of wide-eyed buyers, ogling the impressive rehab work, and then: "We got an offer! Here’s how much we made," and then the credits roll. All usually turns out right for the smiling couples on these programs.

If these programs more closely followed reality they might look something like this:

• Five minutes consisting of months of time-lapsed footage with the frustrated flippers groaning and grunting, bitterly sipping coffee whilst clicking through the online listings. Because, in reality finding the right deal takes time.

• Five minutes consisting of actual rehab work, and when that unexpected issue pops up, there'd be a lot more at stake. Fix and flip financing is based on draws. You get a certain amount of money each month, and if you go over budget on a given month, you might not have enough money to finish your project. So we'd have another five minutes with the couple on the phone asking their lender for some extra money that month.

• Another 5 minutes devoted to selling the house, but once again there'd be a lot more at stake. Financing flips usually entails paying back the entire loan balance after a few months. If the house doesn't sell in short order, you will have to pay back the entire loan out of pocket, and who has a couple hundred thousand dollars just lying around?

With all the tension and looming risk of failure, the true reality of flips might be more interesting than what you see on reality television.

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

Texas Fix and Flip Loans: Properties You Should Never Finance

Don't get overexcited if you spot an online listing you'd like to flip and the profit projections look great on paper. There are specific properties that might never qualify for Texas Fix and Flip Loans, and even if they are eligible, there are certain deals you should avoid.

When it comes to flips, you want properties that will qualify for financing that is unless you've got hundreds of thousands stuffed under your mattress, and above all, you want properties that will sell and sell quickly.

If you can't flip a house within a few months, you could be on the hook for a massive balloon payment, so first, let us talk about homes that don't sell or even if they do sell they sell at a steep discount.

Properties you shouldn't take Texas Fix and Flip Loans out for, because they don't sell:

• Houses in high crime areas: Most buyers might want to take Fido for a walk after their evening meal. Before purchasing a house to flip, drive to the neighborhood in the late evening and ask yourself “Would I feel comfortable walking around here after dark?” If the answer is no, it’s a deal you should avoid.

• Houses in high noise areas: Buyers have alarm clocks for a reason. No one wants to be roused from sound slumber by a blaring cargo train, the horn of a semi, or the roar of an approaching jet, so avoid flipping homes in high noise areas.

Even though these houses are bad deals, you'd likely still be able to get a loan for them. But there are some houses that you shouldn't bother with because most lenders avoid them like the plague.

Don't risk applying for fix and lip loans on the following:

• Houses with a history of meth manufacture: If Walter White previously inhabited your home, lenders aren't going to touch it. The cost of environmental remediation is not an expense lenders want to cover.

• Houses with extensive mold or fire damage: In any flip, you might expect some damage, but if the cost of resolving the issue exceeds a couple thousand dollars, this is an expense most lenders don't want to cover.

• Houses with severe roof or foundation issues: Re-pouring a foundation or putting a new roof on would be a considerable expense that you will need to take care of before you can even begin any rehab work. Most lenders aren't interested in taking on such a cost.

• Houses that have been pillaged: In the rehab business, you can’t expect properties to be in mint condition. However, if you notice that someone has a stripped a house of its wiring and copper pipes, most lenders won't consider the cost of fixing the property to be worthwhile.

Notice that in the above cases, you could pay for these costs yourself, and you might still be able to get a loan. You could flip a house in a high crime area, next to the airport, or that has been used to make meth. Yes, you could flip such houses, but do you want to?

If a flip has any of the above issues, you should move on. Trust that there is a better deal out there.

Pitfalls of Hard Money Lenders

Oftentimes, private lenders are suggested to borrowers who have poor credit or are unable to be approved by traditional public lenders like banks—but who are private lenders? Read more below to find out what you need to know before beginning the loan process with an alternative investor.

Alec was interested in a loan to fix up his property before adding it to the market, but he was having trouble being approved by his local credit union. Having gone to university and obtained a low paying job, his debt to income ratio was not one to be envied—or approved by banks. Needless to say, Alec was frustrated. As he began to pursue other options he realized he could turn to private investors, such as hard money lenders.

What Alec didn’t know was that his reliability as a borrower is just as important as his lender’s reliability. Unfortunately, Alec realized this when it was too late.

Who Are Private Money Lenders?

Private Arizona Hard Money Lenders are individuals or companies who offer money fast. The terms of these loans are that they have to be paid back on a short term repayment period. This is usually within one year, but can sometimes be expanded. Private lenders are generally very transparent with their borrowers because they base the foundation of approval on the property’s potential value. This means they will generally be straightforward with you on a property or investment plan that has some major risk factors. Additionally, they will likely be willing to work with you on an extension if they find the risks can be reasonably taken care of. When Alec found a local private money lender, he was excited to immediately begin his proposed plans for renovations. What he didn’t consider was his lender’s reputability in contrast to his own.

What Are Risks of Private Money Lenders?

Private Arizona Hard Money Lenders pose a variety of different risks. The first, notably, are the high interest rates and fees. Compared to traditional lenders, private lenders are expensive—the rates can be as high as five percent more. Many people, especially those fixing and flipping, determine that the speed outweighs the cost. If they are able to obtain money fast, they are able to flip a property with the highest potential. It’s not uncommon to be told to seek out a private money lender if you are having trouble qualifying for a loan. However, it is very common to for home renovators to turn to private lenders because of the speed and short repayment period, which falls right within the preferred timeline of fixer uppers. As Alec was learning about his options, it became clear that private lenders had a lot to offer, even with the risks. However, Alec’s potential lender had a history of pulling out of projects. Alec didn’t do any research into his lender, or research his lending history. So when Alec was ready to move forward with his plan—his lender wasn’t. Fortunately, Alec was able to move forward with another lender after looking over term agreements with a real estate attorney. There was mutual confidence between them both as lenders and borrowers and the property was able to be renovated quickly and successfully.

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 to Get Colorado Hard Money Loans for Medical Marijuana Dispensaries

Medical marijuana programs are now legalized in a number of states in the United States. Many times, Colorado Hard Money Loans are the best option to fund dispensaries participating in these programs.

In his youth, Jerry served in the military completing a Gulf War tour and earning a purple heart. In the early-1990s, he returned to his home in California with post-traumatic stress disorder and chronic back pain. For many years he suffered from these conditions and struggled finding a form of consistent relief. By the mid-1990s, there were legal changes to cannabis, which came to Jerry’s attention. Medical Marijuana was soon approved under Proposition 215—The Compassionate Use Act. According to the new proposition, Jerry learned that, with a physician’s approval, he could use medicinal cannabis to alleviate his PTSD and chronic back pain.

Jerry interested to see if medicinal cannabis could help his post-war conditions. After some time had passed and the proposition had taken effect, he talked to a physician and got approval to use medicinal cannabis. The treatment worked. Over time, Jerry experienced reduced anxiety, less nightmares, and greater sleeping intervals. The ability to sleep longer, and the lessening or stress and anxiety, helped him feel more relaxed, well-rested, and calmer.

While he had not disclosed his medicinal use of cannabis to those close to him, many friends and family members began to take note of Jerry being more relaxed, sociable, and friendly. Jerry felt better and less burdened.

Get Colorado Hard Money Loans for Medical Marijuana

Over time, Jerry decided he would like to help others struggling with chronic psychological or physical pain. Jerry decided to make a non-profit organization through the California Department of Public Health’s Medical Marijuana Program (MMP). With a knowledge of the system and various connections with physicians, Jerry applied to become a care provider in accordance with state law. The only problem was funding for his non-profit. Some friends of his suggested Colorado Hard Money Loans.

“While Jerry had accrued a significant amount of savings, he relied on Colorado Hard Money Loans to acquire the non-profit instructor he needed to participate in California’s Medical Marijuana Program.”

While Jerry had accrued a significant amount of savings in the past, he relied on Colorado Hard Money Loans to acquire the non-profit instructor he needed to participate in California’s Medical Marijuana Program. Colorado Hard Money Loans allowed Jerry to establish himself and help other individuals suffering or in need of medical help. His clinic attends to a community of thousands of patients

How to Make Money with Arizona Fix and Flip Loans

It’s no doubt the resurgence of people looking to fix and flip properties is based on the numerous shows about fixer uppers on HGTV—but how can you do it successfully?

There are a few things all the stars of HGTV have in common: money and experience. To the average viewer watching at home, fixing and flipping homes may just be interesting; to another set of viewers, it may become a new interest and passion that needs to find fruition. While the housing market is one you may be eager to get into, there are a few tips you could follow when seeking Arizona Fix and Flip Loans if you are wanting to pursue a new chapter of home renovating in your life.

Fixing and flipping entails a lot that is often glammed up on TV: finding a potential property, obtaining it and a loan, renovating it with few surprises, and making a sale quickly—with a profit. All the factors may be overwhelming, and it may make sense to seek a “traditional route.” However, what not many people realize, is that untraditional lenders literally “lend” themselves to the fix and flip process.

Seeking Out Hard Money Lenders

Seeking out a hard money lender after you’ve sought out your potential property is a great option when pursuing Arizona Fix and Flip Loans. First, Arizona Hard Money Lenders are able to do what banks cannot: approve a wide variety of borrowers. If you are lacking experience and a good credit score, it’s unlikely that a bank will approve you for a loan, even if you’ve put in the time and effort into your planning and research. However, Arizona Hard Money Lenders are different. Instead of considering the borrower’s reliability first, they consider the property’s potential. This includes things like plans, and whether or not it would be a good investment for them. Arizona Hard Money Lenders are usually great options for fixer uppers because of their ability to approve borrowers, but for their ability to do it fast. Sometime they can get the loan process started as soon as the day of, which can be essential when bidding on a competitive property. Additionally, they only offer short repayment periods, which falls into the timeline of fixing and flipping a property, should you be able to flip the property without problems, and sell immediately.

Dangers of Fixing and Flipping

While Arizona Hard Money Lenders can be great resources to obtain your Arizona Fix and Flip Loans, it’s important to consider a few things. Despite the fact that Arizona Hard Money Lenders work well within the timeline of a fixer upper, their fees are more expensive than traditional lenders. Coupled with the risks that come with any property during the renovation process, Arizona Hard Money Lenders may not be the best option for everyone. Making money off the fixer upper definitely won’t happen if you aren’t able to provide yourself a financial buffer. Not only that, but you must be confident in the reliability of your lender—this is not a one-way street. The reliability of a loan lender, especially untraditional lenders, are just as important as your own factor as a reliable borrower. It’s possible to make money off of fixer uppers, but you have to put in the thorough research and be confident about what option is best for you. If you are unsure if Arizona Hard Money Lenders are right for you, you can always reach out to a real estate attorney who can help you move forward confidently.

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.

Sunday, April 7, 2019

4 Types of Investors Who Can Get an Advantage with Private Money Loans

Arizona Private money loans aren't always the best option, but there are several scenarios where they actually give the borrower a clear advantage. Here are four situations where private funds eclipse traditional loans.

Before we look at how private money beats bank funds, let's define what private money is exactly. In short, Arizona Private Money Lenders issue short-term loans, typically for flipping properties, buying commercial real estate or getting quick cash. They are often just individuals who are looking for people to invest in, so they aren't subject to the same rules and regulations are the big banks. So who can benefit from this type of funding the most?

Fix and flippers. Fix and flippers are people who are looking for a run-down or outdated property to buy, renovate and sell for a profit. Private money loans can be tailored specifically to their needs in terms of the length, rates and repayment plans. For instance, since a flip might take 5 months to complete, a flipper might take out a private loan for 8 months with no early repayment penalties. That way, when they sell the property, they pay off the loan, keep the profit and walk away.
Long-term investors who don't qualify for a mortgage. These are investors who want to buy a property but don't fit into the bank's box, perhaps because of lack of income proof, a past foreclosure or a not-so-shiny credit score.
Buy and hold investors. Buy and hold investors purchase a property to let it appreciate on the market for a while. Many like the easier qualifications of a private loan for the initial purchase. They then rent the property out to make money while they wait or refinance the property with a conventional loan.
Any investor who needs funding fast. Since private money exists outside the traditional system, there's no complicated underwriting steps, third-party verifications and hoop-jumping like at the banks. In fact, investors can get approved in a day or so and have funds in a week, letting them move faster on a great deal.

Are There Any Cons to Private Money Lending?

Arizona Private money loans offer convenience, flexibility and speed, but there is one area where they can't usually compete with bank loans — the rates. Interest rates are typically higher with these types of loans because of the risk. You'll also need to be able to put up an asset like a property (this can be the property you're purchasing) as collateral.

Private Money Loans in Arizona

If you fall into one of the above categories, a Arizona private money loan might be the answer to your real estate prayers. All it takes is a phone call to Level 4 Funding to find out!

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.