Setabay Private Hard Money Lender

Tuesday, April 9, 2019

What are the Dangers of Texas Hard Money Loans?

Seeking out a hard money loan may seem like your only option—but is it the best option?

Texas Hard Money Loans are often referred to those who cannot qualify for traditional lending options. They are offered by private companies and investors who base their approval process on a very individual basis—that of the loan and property plans, and then the reliability of the lender. As you may know, when you seek out traditional loans offered by local banks and credit unions, getting approved is based solely on your financial history, including your credit score and debt to income ratio. Your reliability as a borrower is paramount. However, when it comes to hard money lenders, they consider this second. The investment is based on collateral and potential value. This leads many to private Arizona Hard Money Lenders without considering the possible repercussions.

What are the Cons of Hard Money Lenders?

The first con of Texas Hard Money Lenders is that they may in fact be, well, a con. Determining the reliability of your lender will be of the utmost importance. A lot of people consider the fact that, when seeking out loans, they will have to prove their reliability as a lender. Sometimes it is an afterthought that the opposite must also be considered. Finding a hard money lender who can offer you a loan and will not pull out of the project last minute can be the difference between a success and a failure. Putting in a little research and seeking out lenders who have worked with individuals on similar projects will be helpful in seeking out the right lender. The next major thing to consider is the price. Texas Hard Money Loans can be great for a variety of people, but it doesn’t come without a cost. Literally. Interest rates on hard money can be as high as five percent more than the rates on traditional loans across the market. Not only that, but all Arizona Hard Money Lenders are different. In addition to the high rates, some lenders may also require additional fees within the loan agreement. The last thing you will want to consider is the short repayment period. Depending on what you need the loan for, the short repayment period may not impact you as much as it would someone else. However, coupled with the high interest rates, it’s definitely something to consider before diving in.

How Can Texas Hard Money Lenders Help You?

Texas Hard Money Loans can be the solution if you do not qualify for traditional loans. Arizona Hard Money Lenders are able to get you your money fast, and may be able to approve you based on the plans you have for the property while a traditional lender may only consider your financial history. Texas Hard Money Lenders work fast, are generally transparent with you, and can even offer a loan extension if they believe in you and your plans. There are risks associated with hard money lenders, but if the speed and flexibility outweigh the dangers they may just be for you.

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.

Monday, April 8, 2019

Are Arizona Hard Money Lenders the Real Deal?

Qualifying for traditional loans is not always easy—but is seeking out private, untraditional lenders really what’s best for you?

Tori and Tony wanted to learn to fix and flip houses, but they couldn’t qualify for a traditional loan. Their local bank and credit unions all said the same thing: their credit score was too low, and their debt to income ratio wasn’t low enough. Still, they didn’t want to give up their dreams of renovating a fixer upper, and decided to look into private money lenders.

Tori and Tony soon learned that private money lenders are untraditional options, usually private companies or investors, that offer hard money. Arizona Hard Money Lenders are often referred to borrowers who cannot qualify for traditional lending options. While they can be really helpful for borrowers in some situations, they may not be for everyone.

Finding Success Within the Eligibility of Hard Money

Hard money is great because, when you are approved, you can obtain it fast. Some Arizona Hard Money Lenders are able to begin the loan process within the week, if not as soon as the day of. Traditional lenders like banks may take as long as a month. Depending on why you need the cash and how fast, the ability to obtain a loan may make or break you. In Tori and Tony’s case, they wanted to purchase a property with high renovation potential. Because it was such a great piece of property on the housing market, they felt the need to secure the loan fast. However, there are a few daunting things about hard money to consider. The first is the high interest rates. Interest on hard money loans can be as high as five percent higher than other loan options. Additionally, there is a short repayment period. Depending on what you plan with your loan, this could be a good or a bad thing. Because Tori and Tony were wanting to renovate a home and sell it quickly with hopeful plans for profit, a hard money loan would be great. The short repayment period falls in line with the timeline of a fixer upper. In other cases, like using the loan for a rental property where money is coming in over a long period of time, hard money loans may not be right for you and your situation—especially coupled with the high interest rates.

Are Arizona Hard Money Lenders Right for You?

Determining if you should seek out hard money, is a decision that should be made based on your individual needs. Just because Tori and Tony were seeking out a private lender for a fix and flip doesn’t mean that that is a decision you will want to make too—no matter how common it is for private lenders to invest in fixer uppers. Ultimately you will want to consider your major limits in regard to money and time. If you meet with a private lender and are still unsure about whether it is the right decision for you, you can always meet with a real estate attorney. A real estate attorney will be able to help you identify any major stipulations with the loan agreement, and advise you of any concerns or possible risks. Not only that, but they can help provide insight on the legitimacy of the lender. Something always to consider is the lender’s reliability. When it comes to loans, it’s not only the borrower who has something to prove: it’s the lender, too.

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.

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.

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.

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.

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

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.