Setabay Private Hard Money Lender

Tuesday, April 16, 2019

Top 3 Ways to Boost Your Eligibility for Arizona Spec Home Financing

Arizona Spec Home Financing is back in a big way, but not everyone who applies for a loan will qualify. Make your application stand out from the pack by addressing a few often-overlooked issues.

1. Have a builder with experience and a good reputation on your team. People move into spec homes from all walks of life. Some are coming from the fix-and-flip biz while others are relying on their natural skill or come from some kind of construction or repair-related background. This kind of experience does matter and will help you have a more successful outcome, but it’s not enough to get a loan. If you, personally, do not hold a contractor’s license and do not have previous projects which demonstrate your success, you aren’t going to get Arizona Spec Home Financing. Find someone to partner with on your first few projects who already has a good reputation in the industry and you’ll get more approvals.

2. Bring an appraiser on board early. It may sound strange to have a house that hasn’t even been built yet appraised, but you can get an estimated value based on your plans and similar homes in the area. An awesome appraiser can also give you tips and ideas before you build, so that you can pivot your plans to collect more cash if anything has been overlooked. Most lenders will want to see the appraisal too.

3. Be prepared to put some skin in the game. The amount of your down payment will vary based upon the lender, but most builders have to put 20-25% down.

Show Lenders You’re the Real Deal with a Detailed Plan

You’ll need to be well beyond the idea stage when you approach lenders for Arizona Spec Home Financing. It may sound like you’re putting the cart before the horse—how can you plan if you don’t know how much you can get? That’s not true when it comes to applying for loans. Your investors will want to know how you plan to spend the money, what your timeline is, and what will be going into the finished project. Be prepared with floorplans, a full materials list, and other items which showcase your budget and the scope of your plans.

If you can plan it, you can successfully fund it.

There are many forms of Arizona Spec Home Financing, though chances are you’ll be looking for Arizona Hard Money Loans for this. In these cases, you’ll need to purchase the land to build on and can then use that as your collateral for the building portion. Lenders may also allow you to use other assets as collateral. For example, if you’ve got investment properties already, you may be able to use one or more of them. Knowing which asset you’ll be leveraging can also help you identify how much money you’ll have to spend before planning. Try to keep your costs to no more than 70% of the asset you’re leveraging. Yes, you may be able to get as much as 85%, but not all lenders will go this high, so it’s important to start off with conservative estimates and go from there. The same mentality will help you immensely throughout the whole approval process.

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.

Why Use An Arizona Hard Money Loan?

One type of loan you need to be familiar with, as a buyer or a real estate investor, is an Arizona Hard Money Loan. These are short-term, higher interest loans that can be used when traditional financing either is unavailable or won’t work for your situation.

A typical Arizona Hard Money Loan will run you anywhere form 7.99% to 15% and anywhere from 3-7 points. Points are an upfront fee of the loan amount. Unlike traditional financing Arizona Hard Money Loans are short-term loans, which make them perfect for a fix and flip. These loans generally run from 6 months to 3 years, but depending on the lender can be stretched out to five years. Because of the higher interest rate and points an Arizona Hard Money Loan, per month, will be more expensive.

So, why would anyone use an Arizona Hard Money Loan? There are many reasons an Arizona Hard Money Loan will actually make you more money. Buying a distressed home that you plan on fixing up and selling is a prime example of a reason to use these loans. Banks do not typically lend on fix and flip properties; there are many reasons for this—first and foremost, if the investment property doesn’t work out, it is much easier to walk away from an investment than it is your primary residence. Bank loan terms are longer and they have lower interest rates—this is great if you are buying the home you will reside in, but why would you take a 30 year loan out on a home you are planning on selling within a year? Also, banks will not finance repairs. That means you will have to come out of pocket for any and all repairs. Banks also will not finance until all inspections have cleared—if something needs to be fixed, you either have to bargain with the seller to fix it or it comes out of your pocket. Banks require large down payments—20-25%. An Arizona Hard Money Lender finances on ARV (after repair value) or LTV (loan to value)—either way you are not looking at anything near what a bank requires.

Reasons for Getting an Arizona Hard Money Loan Over Traditional Loans

The fix and flip example is the most popular reason investors use Arizona Hard Money Loans. There are more:

1) You have bad credit: Unlike banks, who approve based on credit scores and income—an Arizona Hard Money Lender bases approval on hard assets—the property.

2) Fast approval: Arizona Hard Money Loans can be approved within a day and financing available generally around 10 days or less. This is important to people wanting high demand properties. A seller will choose to work with hard money versus a bank—banks typically take a minimum of 30 days to close and can easily take 90 days. This quick close helps the buyer negate a lower purchase price.

3) Arizona Bridge Loan— You are selling your home, but don’t want to wait on it to sell to buy your new home. A hard money Arizona Bridge Loan can cover that—these are interest only loans, meaning you won’t pay a large payment until your house sells—when you have the money. These loans make it possible to own two homes, but pay one mortgage.

4) Obtaining financing when a bank won’t provide additional loans: Most banks cap the amount of loans to a borrower at four. Arizona Hard Money Lenders do not have to adhere to federal regulations and so there are not these types of limitations.

Working with an Arizona Hard Money Lender is A Partnership.

Arizona Hard Money Lenders want their deals to go as smoothly as possible. These lenders have flexibility that banks do not and so it is easier to work through a problem and find a solution with your lender. A reliable and experienced Arizona Hard Money Lender will always be honest in their opinion concerning a project—they want it to succeed as much as the investor.

Top 10 Cities to Invest in Real Estate with Colorado Hard Money Loans

Ever wonder where the best places to flip or hold with Colorado Hard Money Loans are? According to a new report, more people rent one-way moving vans to the Sun Belt states than anywhere else.

Penske truck rental service recently published some insider insights regarding where people throughout the United States are moving to and they have some major commonalities. All but two in the top ten are considered Sun Belt states. Technically speaking, the Sun Belt encompasses all regions south of the 36^th parallel. More concisely, it’s the states which run across the southernmost border of the United States from California through the southernmost tip of North Carolina.

This development isn’t particularly surprising because populations in the Sun Belt have been booming since the 1960s, and air conditioning is likely to thank for it. Since then, cities have built up dramatically and offer all sorts of recreational activities year-round. Although often sought out by retirees who have grown tired of snowy regions, the diverse activities and cultural hubs have made the Sun Belt states destinations for all. In short, all this means that if you apply your Colorado Hard Money Loans to homes in the Sun Belt states, you’ll have more command over the sale.

If You Can Work in One of These Ten Cities, You May Have More Successful Sales

When working with Colorado Hard Money Loans, you’ll always want to have a solid exit plan before jumping in. Knowing the cities people move to most can serve as a good starting point for research. They include:

· Atlanta, Georgia; median home value of $255,100

· Phoenix, Arizona; median home value of $239,000

· Tampa, Florida; median home value of $219,500

· Orlando, Florida; median home value of $235,300

· Denver, Colorado; median home value of $424,200

· Houston, Texas; median home value of $183,000

· Las Vegas, Nevada; median home value of $273,000

· Charlotte, North Carolina; median home value of $220,700

· Austin, Texas; median home value of $73,800

· Portland; median home value of $423,200

Beware: move-ins only account for part of the picture.

It’s important to note that the number of people moving to a region only account for a portion of the picture. Yes, populations are growing in the Sun Belt, especially in and around the cities mentioned. However, the Penske report doesn’t actually cover the housing market. There’s no research indicating how many homes are on the market nor how long houses stay listed. In some cases, your own research could turn up that an area has a surplus of homes, in which case, it may not be the best place to flip unless you’re able to bring something to the table that other sellers can’t. Furthermore, regulations will vary from city to city, meaning some may have regulations which make it harder to buy, fix, or sell. Lastly, the availability of Colorado Hard Money Loans will vary based upon a number of factors. Most lenders prefer to work a specific geographic area because they know it well, are familiar with the laws, and have seen successful investments in the area. So, at the end of the day, you’ll need to do your homework. This list may be a good starting off point if you’re not sure which region to do your flips or holds in, but you need to evaluate each region and each opportunity on its own merit.

Monday, April 15, 2019

Experts Say Market is Stable: Invest with Arizona Hard Money Loans

Changes in the housing market this year have made some wary of an impending crash, but experts say the data concludes it’s stable. You can still use Arizona Hard Money Loans to invest in properties and earn some serious cash.

Some worries about the housing market have arisen because 2018 was filled with skyrocketing values and a housing shortage, but the numbers shifted at the end of the year a bit. However, experts say this is not a cause for concern—the market is stable and expected to continue to remain strong. According to a recent AZ Central news report, “96 out of 100 top national economists don't expect a housing crash this year.” This is based on data pulled which does show changes in the market but indicates ongoing stability for the foreseeable future.

“The supply of homes for sale increased, and sales slowed during the last three months of 2018,” explained senior housing analyst Tina Tamboer in a meeting of more than 100 real estate agents just a few weeks ago. “But, nothing in the current data shows a market crash coming for Phoenix,” she said.

Her findings concur with what many already know: it’s a seller’s market. Prices aren’t necessarily climbing at the rates they were, but that’s actually a positive thing because the market can’t sustain continuous rapid climbs at that rate. The good news is, you can make money with Arizona Hard Money Loans regardless of whether it’s a buyer’s market or a seller’s market. If you haven’t worked in a seller’s market before, however, you’ll need to adapt your strategy to suit.

Learn How to Make Money with Flips in a “Seller’s Market”

People flocked to fix-and-flips when it was a buyer’s market; when homes could be picked up at a fraction of their value. This doesn’t happen quite as much in a seller’s market, so you have to be mindful how you apply your Arizona Hard Money Loans, simply because you can’t rely on value increases to line your pockets. You must find a good deal to start with and put in some sweat equity or choose the right repairs and upgrades to increase value. In addition to this, it may be beneficial to apply a unique strategy, such as working on multi-family dwellings or subdividing land in popular areas.

Be more successful with the right plan and funding.

Once you understand how the market shift changes how money is made, the next step is to identify the right source of financing for your project. Arizona Hard Money Loans work well in this climate because the initial sellers of the home likely have options. Having cash in hand works wonders to sway someone who’s eager to move or simply wants to be assured the sale won’t fall through because the buyer couldn’t get financing. It also lets the flipper move fast when a home is priced under value, so it can be grabbed before other flippers get to it.

The Differences Between Arizona Hard Money Loans And Bank Financing

To be successful in real estate, there are two components you have to have: management and financing.

When speaking of financing an investor has to work towards as little money down as possible. Less money down means more profit. To understand how important this is let’s take a look at an example: You, the investor, find a property that is selling for $110,000. You have $40,000 in repairs. The after repair value (ARV), because of the large amount of repairs, will be $200,000. What this means is that this home will have $50,000 in equity minus the closing costs. After finding this property the next thing an investor must do is find financing for this deal.

Usually, the first place people think to go, when they hear financing, is the bank. Because that’s what everyone does; you need a loan, you go to the bank. However, that is a rookie mistake. A bank is going to require a minimum of a 20% down payment; that is based on the appraised value of the home or the purchase price. In this scenario we will use the purchase price of $110,000. The minimum down payment would be $22,000. The bank will not roll the closing costs into the loan—you will be responsible to pay that upfront. Let’s assume the closing costs are $5,000; that includes title, underwriting and all fees associated with your deal. The bank also will not lend you money for repairs. So, you will have to come up with that out of pocket expense, as well. So far, you are looking at $45,000 for the closing costs and repairs—and let’s not forget the down payment of $22,000. That is $67,000 you will have to come up with to flip this house. Banks also require inspections—meaning that if the property doesn’t pass all inspections, those will have to be repaired and handled before the bank will finance. Sometimes the seller will fix this, but often—especially in the cases of foreclosures, that doesn’t happen. Also, a bank can easily take 60 to 90 days to close. It is a minimum of 30 days to close. Sellers, of houses that need rehabbed, do not want to wait for 30 to 90 days. They’ll sell it to someone who has the cash.

Arizona Hard Money Loans

Arizona Hard Money Loans are short-term loans that come from a specific source meant for real estate investors. There are no inspections required. Arizona Hard Money Lenders will loan on a property in any condition—they know you are buying it to rehab and sell. Another nice thing about Arizona Hard Money Lenders—they will include the repairs in your loan. Arizona Hard Money Loans are quick-close loans. Investors typically have their money in less that 2 weeks. Sellers love working with investors using hard money for this reason alone. Hard money financing works differently. Arizona Hard Money Lenders lend on ARV (typically 70% of ARV). In this situation the ARV is $200,000. The loan amount for the property alone would be $140,000. The purchase property is $110,000. That leaves you with $30,000 extra for repairs.

Bank financing works for a primary residence—one you will live in for 30 to 40 years.

However, bank financing makes no sense for a property that will be rehabbed and sold. An investor actually loses money using a bank loan. Numbers don’t lie. Contact us for information on real estate investment loans at level4funding.com.

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 Arizona Hard Money Loans Work

Arizona Hard Money Loans work similar to conventional loans—with half the hassle and much more flexibility.

Just like a traditional bank, borrowers must apply for an Arizona Hard Money Loan. However, instead of waiting weeks, if not months, to find out if you are approved—you find out typically within a day or two. Unlike banks you are generally financed within two weeks. This is helpful for investors who have found a property and don’t want to lose it to an all cash buyer.

Like traditional loans, Arizona Hard Money Loans have an underwriting process. The good news is Arizona Hard Money Lenders do not dig deep into your financial history and the terms can be negotiated and so this underwriting process is leaps and bounds faster than a bank. Once you are pre-approved and have given the lender the information on the property an appraisal will be ordered. As long as the property meets the lender’s criteria and the borrower has purchased the necessary insurance the next step is closing and receiving the funds to purchase the property. It is a very quick process; unlike banks, where it can easily take up to 90 days to receive financing. Unfortunately, in these cases many times borrowers have lost the property due to hang ups with the bank.

How to Find The Right Arizona Hard Money Lender

If you are an investor, speak with other investors and find out which lender they work with. Word of mouth is the biggest way Arizona Hard Money Lenders receive clients. Because real estate investors are the primary clients of Arizona Hard Money Lenders, lenders work on reputation.

There are also many websites that can direct you to a lender that works in your area. Bigger Pockets and Arizona Hard Money Lender Directory are both websites where Arizona Hard Money Lenders are listed. As always, there is google; simply type your city and Arizona Hard Money Lender to find a list of lenders near you.

It is vital that you choose a lender that not only has a good reputation, but also has a solid track record. Because lenders make their own terms and requirements it is essential that you ask many questions when speaking to lenders. Find out about their origination fees (points). Do they have prepayment penalties? Ask the lender if they loan on LTV (loan-to-value) or ARV (after repair value). Depending on what your loan is for—this will make a considerable difference. Many lenders will finance the repairs of the property; find out if the lender you are speaking with does. Another question to ask is if there is someone in the office that can help you along the way—or are you alone on this venture?

Finding the right lender can turn into a future business partner.

Arizona Hard Money Loans are a win-win situation for investors and lenders. Once a borrower finds a lender they can work with there is opportunity for a long-term relationship. Finding the right lender can take your investments to an entirely new level.

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.