Setabay Private Hard Money Lender

Monday, April 15, 2019

Why Do Texas Hard Money Lenders Care if I Run an LLC?

You may have trouble finding Texas Hard Money Lenders to work with if you aren’t established as an LLC. In short, this is due to governmental red tape, but you do have options if it’s a sticking point in your approval process.

Whether you label yourself as an investor, entrepreneur, house flipper, or businessman, the reality is that most people just getting into investment opportunities or making money through real estate are getting into it alone. As such, it probably doesn’t matter to you, personally, what happened with the consumer market years ago, so long as you can make a profit on real estate today. However, it does impact how Texas Hard Money Lenders and other financial institutions behave now, and that means it impacts you when you apply for a loan.

It would be challenging to find someone who wasn’t impacted by the recession or at least didn’t know someone who was. The reasons for this are well cited, with all sources pointing to changes in the housing market in 2007. Prior to this, houses were selling like hotcakes and anyone could get approved. Sub-prime mortgages reigned. That is, until they didn’t. Ultimately, banks fell apart and the job market tanked. Everyday people lost their homes and more. It took years to recover and it’s certainly nothing the world wants to see again.

The government stepped in with a slew of new regulations to prevent recurrence. For the most part, these changes impact the consumer market, not commercial loans. Therein lies the issue. How do you prove that you’re borrowing for business purposes unless you’re registered as a business?

Avoiding the Pitfalls of Government Regulations is Key in Real Estate Investing

Obviously, you, as a business, probably can’t afford to jump through government hoops or slow funding. You know what you’re getting into and have a business plan for your real estate investment, which means it’s important to ensure you’re not subject to the general consumer guidelines. When it comes to the Truth in Lending Act (TILA), for example, your loan is exempt from the extra red tape if the funds are being used for business or commercial purposes. That should be a win by itself, but there are harsh penalties for Texas Hard Money Lenders and other entities that may unintentionally breach protocol. Ergo, many go by the second method to exempt loans; extending them only to “non-natural persons,” which is legalese for “businesses.” Ergo, you may not qualify unless you’re established as an LLC, partnership, or corporation.

If you can fill out basic paperwork, you can establish an LLC.

Again, not all Texas Hard Money Lenders require you to have an LLC. Some are simply satisfied knowing you’re using the funds for business. However, having an LLC has its perks—namely limiting your personal liability in the event something goes wrong. Maybe someone slips on your sidewalk or something similar occurs and you wind up in court. The LLC protects you—the person—from business-related damages. The amount to file varies by state and it can be anywhere from $50-500, but it’s little more than $100 on average. In other words, filing is cheap, and there are many benefits to 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.

Fix and Flip Loans

With house flipping at its highest level since 2007, dues to rising home prices and more availability in financing, it’s a terrific time to get involved in real estate investments.

Buying and selling houses is the new fad. You will see it on television and read about it on the internet. But, why? Well, if you are an investor, it is one of the quickest ways to make a profit. And while buying, fixing and reselling property can be fruitful— it takes time, effort and money. You need money to buy the property and you also need money to rehab the property. Ahhhh… and let us not forget you need the money to cover property taxes and insurance until the property sells. So, the big question is, “where do I get all that money from?”

Back in 2005 anyone with a pulse could qualify for a mortgage through a traditional ban—however, this is 2019 and that just isn’t the case anymore. If you don’t have money saved up then house flipping will take some planning. If you are approved for a conventional mortgage you will still end up paying more than you did on your primary residence. Banks are not comfortable lending on a flip house. The bank’s main concern is they are repaid the loan. Knowing that this is an investment property that could potentially fail, leaving the borrower possibly walking away, makes the banks uneasy. Banks do not work with risky deals. However, there are lenders that want to work with risky deals because it’s how they make their money.

Arizona Hard Money Lenders and Fix and Flip Loans

Arizona Hard Money Lenders are not banks. They are individuals that lend money out to investors at a slightly higher interest rate than a traditional bank. The interest rate is higher for two reasons: they are borrowing the money from investors themselves and have to pay an interest rate and they are lending on riskier deals than banks will. Arizona Hard Money Loans have different terms than banks. Their interest rates are typically between 7.99%-15.99% plus two to five points. A point is equal to 1% of the loan amount. With a conventional mortgage a borrower will pay points at closing; with an Arizona Hard Money Loan a borrower does not have to pay the points until the Arizona fix and flip property sells.

Arizona Hard Money Lenders typically base the amount you can borrow on the property’s after-renovation-value (ARV). This means that the lender will finance the property based on what it will sell for after the repairs and renovation have been done. To give you an idea of what this looks like imagine finding a property selling for $75,000. Once it has been determined what repairs need done and a value has been assessed on the price you will sell it for, the lender will finance you for 70% of that price. So, this $75,000 home will sell for $120,000 after rehab-the Arizona Hard Money Lender will loan you $84,000. That leaves the borrower with $9,000 to use towards the rehabilitation of the property. That is $9,000 that you, the borrower, do not have to spend out of pocket. Yes, you may have to spend a small amount of money. However, it is highly likely that you may not have to spend your own money at all.

Another benefit of an Arizona Hard Money Loan is the terms are flexible. Because these are individual lenders they are not required to follow any federal requirements—they make their own. Which means all terms can be negotiated—from the interest rate to the life of the loan.

A real estate investor not wanting to spend very much of their own money on a fix and flip should seek the help of an Arizona Hard Money Lender.

Not only will a good Arizona Hard Money Lender work with you on terms, they also are not focused on your credit or income. Arizona Hard Money Loans are based on hard assets which will be the property the borrower wants to finance. Yes, these loans have higher interest rates than a conventional mortgage. However, these are typically interest only loans with a balloon payment due on the last payment.

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 to Rig Your Credit & Why Arizona Hard Money Lenders Don’t Care

Experian is rolling out a new program that could let you rig your way to a better credit score. It won’t likely impact your ability to work with Arizona hard money lenders, but there’s some chance it could actually harm your ability to get a loan with good terms with other lenders.

If you haven’t delved deeply into credit scores before, you may be surprised to learn that you don’t have a single score. You have several. There are three big credit bureaus (FICO, Experian and Equifax) which gather data related to you and financial habits, then provide some type of score to help financing companies determine whether you’re a safe borrower or not.

Each assigns you a numerical credit score using an algorithm. Most credit reporting models are based upon FICO’s model, so your credit scores will likely be similar across all three. However, each is unique and sometimes one receives different information than the others, which naturally makes the outcome different too.

When you apply for a loan, the financing company may pull a report from any of them or all three. However, with FICO, decisions are purely based upon the credit score. If a company says you need to have a 700 to qualify and you have a 699, you’ll be denied no matter the reason. With the other two, a full report containing things like open accounts and late payments is provided, so financing companies can take circumstances into account if they so choose.

Historically, there’s been nothing a person could do if he or she had rotten credit—at least not quickly. If your past was problematic or you hadn’t established credit, those were indicators you might not be a safe bet. That makes sense. You’d have to spend years building or rebuilding to get credit from a traditional finance company. Arizona hard money lenders have always been a bit different in this respect, simply because your credit score is not a major factor in the decision to lend.

If You Can Pay at Least Some of Your Bills on Time, You Can Game the System

Experian is now going to let you cherry-pick some of what appears on your report. Under the new program, Experian Boost, you’ll be able to link Experian to your bank account and it will pull data on things like phone and utility bills. Then, it will show you each bill it can count, let you know how it will impact your score, and allow you to pick which ones to include in your score. If you decide you don’t like it, you can shut it off. While this won’t undo a bad credit history, including bills you’re a good payer on can demonstrate creditworthiness and show you’ve had credit for a longer period of time, thus potentially increasing your Experian score and getting you approval with companies which prioritize Experian. Again, Arizona Hard Money Lenders won’t necessarily care about this. The majority use a FICO score and, even then, it’s the value of the asset you’re borrowing against that matters most.

Experian’s shift could spell danger for the future of lending.

As a consumer, you’re probably excited about this change because it could be an easy way to instantly improve your credit score. Therein lies the problem for financing companies and perhaps a few Arizona Hard Money Lenders who break from the norm. While Experian says this does not change its predictive abilities, there’s some chance financing companies may stop trusting Experian or require higher scores if time proves otherwise.

Sunday, April 14, 2019

Benefits of Hard Money Rental Property Loans

Forget conventional lenders. Get hard money rental property loans and start making money today!

Frankly, conventional money is hassle and is incapable of funding the large majority of the quick paced real estate investments that are constantly in motion. Hard money is a reality when it comes to rental properties, snatching the right real estate, and renovating to increase profits.

Thus, many turn to hard money lenders because hard money rental property loans have less stipulations than conventional lenders. To receive such a loan as this, a borrower must have enough cash down, 20% to 60%, to create a favorable loan-to-value situation for his or her lender. Otherwise, he or she will need to leverage current real estate assets owned to mitigate the lender’s risk. By leveraging property, especially with excellent positive equity or with no debt owed, up to 100% LTV is possible.

On top of this, previous credit issues such as bankruptcy, foreclosure, and delinquency can be overlooked in favor of an optimistic equity situation. Don’t worry about the past, it is time to live in the glory of the entrepreneurial present. Another benefit of using hard money rental property loans, is that you are able to buy distressed property. This is a benefit if you are interested in renovating to rent a house since purchasing a house is cheaper than purchasing other refurbished units in an area. Though this may take honing a few more skills and becoming one with your inner weekend warrior, many are able to get more returns by paying less in these instances. If hard money lending seems right for you, talk a hard money broker at Level 4 Funding today.

Make More Money with Rental Property Loans

Rental properties are also attractive for a number of reasons: they are a great way to establish equity, home ownership, long term cash flow, and even a retirement. Rental properties are secure in recessions when renting becomes more common. Furthermore, rental property loans to finance acquisition and renovation are not hard to come by and form a great starting point for new investors.

Talk to a hard money broker at Level 4 Funding to get your rental property loans today!

Talk to a hard money broker to find the rate, term, and loan-to-value needed for the rental investment. After acquiring the property and getting funding to renovate through rental property loans, find renters and establish a lease rate that allows for paying off the active hard money loan.

All About Arizona Hard Money Loans

What is an Arizona Hard Money Loan and who benefits from these loans?

Arizona Hard Money Loans are unlike conventional loans. They are funded by private investors that are often referred to as Arizona Hard Money Lenders. These loans are based on the value of the property that is being purchased versus the borrower’s credit worthiness. The amount of the loan can be based on either the loan-to-value ratio (LTV) or the after-repair-value (ARV). The LTV is the ratio of loan divided by the value of the property being used as collateral. The ARV is what the property will be worth after the repairs will be done. The loan terms will be different depending on the lender.

Arizona Hard Money Loans are much easier to qualify for than conventional mortgages because the approval is not solely based on the borrower and their ability to pay the loan back, but on the property and what it is worth. This is because in case the borrower defaults on the loan—the lender can repossess the property, sell it and get their money back. These loans typically have 6 months to 3 year terms; in certain situations these loans can be extended out for up to 5 years.

These loans are generally meant for real estate investors for fix and flip and construction projects. However, Arizona Hard Money Lenders can finance residential properties and small business loans as well. Arizona Hard Money Lenders have the freedom to be flexible when working with borrowers. Successful real estate investors have a lender they regularly work with. Not only will the lender often lower interest rates for a repeat customer—they are able to give quick financing when the investor comes upon a property.

Why Use An Arizona Hard Money Loan?

There are many situations in which an Arizona Hard Money Loan will benefit a borrower over traditional bank financing. When an investor comes upon a property they are able to get quick financing because funds are generally available in less than two weeks. This aids investors when competing with all cash buyers. Sellers prefer working with investors that work with Arizona Hard Money Lenders because there is security given to the seller that the deal will not fall through.

If the borrowers credit score is not sufficient to secure traditional lending or they just do not meet bank requirements, Arizona Hard Money Loans are a great alternative. Typically, Arizona Hard Money Lenders do not impose prepayment penalties; meaning, that once the borrower is able to qualify for a conventional mortgage they are able to pay off the Arizona Hard Money Loan without any penalties.

Any time a borrower does not have enough cash or access to any financing, Arizona Hard Money Loans are a great substitute for traditional lending. In this case, as the others, when the borrower finds themselves in a situation to secure traditional financing the Arizona Hard Money Loan can be paid off.

Arizona Hard Money Loans are not the answer to financing for all; however, for many borrowers, Arizona Hard Money Loans can solve their problems.

Arizona Hard Money Lenders are essentially concerned with the collateral that backs the loans. These lenders differentiate in their loan terms. Most lenders work in a certain geographic location. It is important, when researching Arizona Hard Money Lenders, that you do so in your area. Make sure once you locate a lender you ask questions. It’s not only finding a lender that will qualify that is important—it is finding one that your personality and goal mesh well together.

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 To Flip Houses With No Money Down

It would be a lie to say that anyone can flip houses with no money down in Arizona and make a profit. However, it is possible with hard work.

I have flipped over 130 homes in the last 10 years. It is not easy, but once you are able to find an effective strategy it becomes easier and a whole lot of fun. I average about $25,000 in profit per flip. However, I didn’t start out making that type of money. My first house flip I profited $4,500— my second, I walked away with $8,000 in my pocket. And, on my third flip I lost $3,200. Don’t let that intimidate you—I want to be honest concerning this business. After 10 years of flipping homes, I have only lost money on five projects. That equals less than 7% of my deals resulting in losses—not too shabby.

Many people think about becoming real estate investors, but never take actions on that thought. There is a good reason for that; becoming an investor means taking risks and removing yourself out of your comfort zone. However, if you are able to make these changes it will be well worth the time. There are many ways you can flip houses with no money down in Arizona (or very little): wholesaling, buying houses that already have a loan on them and partnering with another investor. However, the most effective way to flip houses with no money down is through private money investors—commonly called hard money investors.

My first flip was actually a home I lived in. When my wife and I first met we both owned homes. Once we decided to get married we chose to sell our homes and buy a fixer upper. We lived there for two years, rehabbed it and sold the property. However, at that point we wanted purchase a nice, new home. About a year later I started getting the itch again to rehab a property. Although I had flipped a house previously—I didn’t have a whole lot of experience. We had also taken our time rehabbing the property. On average it should take about 3 months to fix and another 3-6 months to flip a home.

Hard Money Fix and Flip Loans

Arizona Hard Money Lenders will typically approve more than traditional banks. A benefit to working with an Arizona Hard Money Lender is they will approve not only the property loan but the repairs, as well. Arizona Hard Money Lenders are establishments—and occasionally individuals— who borrow money from investors at a certain interest rate and then lend that same money to real estate investors at a higher rate. Arizona Hard Money Loans are short-term loans that generally have terms from six months to three years. To fix and flip a home with no money down find a lender that will lend on the after-repair-value (ARV). Most lenders will finance at least 70% of the ARV. That means they will lend the borrower 70% of what the house will be valued at after it has been rehabbed. For example, if you buy a house for $105,000—but the ARV is $200,000—the Arizona Hard Money Lender will finance $140,000.

Have you been thinking of getting started as a real estate investor?

If flipping houses in Arizona is something you’ve daydreamed about take that step. Research local Arizona Hard Money Lenders and talk to one. For more information, contact us at level4funding.com. We would be more than happy to get you started in the right direction.

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.