Setabay Private Hard Money Lender

Thursday, April 18, 2019

3 Ways to Find Homes that Maximize Your Texas Fix and Flip Loans

One of the best ways to maximize your Texas Fix and Flip Loans is to select cheap homes. If you want to pay rock-bottom prices, learn how to pick up properties before they hit the market.

1. Neighborhood farming. Real estate agents who switch to rehabbing are probably already familiar with neighborhood farming. This is the technique used when an agent seeds a neighborhood over a period of time in order to become the authority for its residents. If you’re going this route, spend time researching which neighborhoods are best and suit your personal preferences. Then, craft a long-term strategy which involves repeat contact with the residents.

2. Advertising. We’ve all seen those “I buy ugly houses” signs. They’re arguably a bit overdone, so you may want to find your own wording or test different phrasing to see what works for you. This is one method cheap advertising that can get you leads, but there are others, from print ads to mailers. You can also work in the digital marketing realm, offering to be a guest poster or guest on a podcast for a related company, such as a moving or loan company.

3. Networking groups. Many rehabbers who leverage Texas Fix and Flip Loans utilize various networking sites or social groups. While it may seem odd that referrals occur in this realm, they happen all the time because rehabbers have distinct preferences. One may like working on million-dollar properties, while another may lean toward small inner-city dwellings. One might like working on historic homes, while another prefers hoarder homes or those with fire/ flood damage. The more you connect with other rehabbers, lenders, real estate agents, brokers, appraisers, and others in the industry, the more referrals you get. Just remember to reciprocate! Drop a note to someone when you think a project is something they’ll want to sink their teeth into.

If You Can Go Off-Market or Pre-Market, You Can Save Some Serious Cash

Sellers don’t always want their homes to be listed. These properties are often referred to as “off-market,” “pre-market,” or “pocket listings.” There are many reasons why people go this route. Perhaps the person is trying to sell on his or her own to avoid losing a chunk to a real estate agent. Sometimes, the seller simply doesn’t like the idea of having all sorts of tours and open houses at inconvenient times, which is quite common with people who have families or pets. Others may be simply dipping their toes in the water to see what their home will sell for. In any case, this is a great place to apply your Texas Fix and Flip Loans because competition is minimized and will typically let you pick up a home for much less than one that’s traditionally listed.

You should brace yourself for the pitfalls of pocket listings too.

Even though you can score a real deal with pocket listings, which will make your go Texas Fix and Flip Loans further, you could face unique challenges. For example, the seller is not typically receiving any expert advice, which means he or she could have unrealistic expectations about the value of the property or what the process entails. However, if you bring your leadership and management skills to the table, you and the seller can still have a great experience even under the most challenging circumstances.

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 to Use a Cash-Out Texas Bridge Loan to Grow Your Portfolio

A strong real estate investment portfolio can pave the way to a comfortable lifestyle, but sometimes plans stall out due to lack of capital for the next purchase. A cash-out Texas Bridge Loan can be the tool that gets your plans back on track.

Developing a real estate portfolio, as opposed to focusing purely on fix-and-flips, can give you a steady stream of reliable income. The difference is, with fix-and-flips, you get a sizable amount of cash at the end of the deal, which you can then turn around and apply to your next property. When your funds are tied up in a property you plan to hold, it’s not always easy to move onto the next project. This is where a cash-out Texas Bridge Loan works wonders.

If your existing property is paid for or you have a considerable amount of equity in it, you can tap into that equity to fund the next project, but chances are you’ve never heard about this because the banks don’t like to do it. They will, at times, offer a similar option, but they expect you to spend the money on the property you’re borrowing against, which isn’t particularly helpful if that one’s already up and running and generating revenue.

So, without the banks helping you, where do you get the cash? From a Texas Hard Money Lender, of course. While a Texas Hard Money Lender will still want to know how you plan to spend the cash and will want to be assured you’ve got a solid exit plan mapped out, you aren’t tied down to using the money on the property that’s being leveraged.

Cash Out Can Help You Buy and Hold or Buy and Flip

Most Texas Hard Money Lenders will do a cash-out Texas Bridge Loan for up to 65% LTV (loan-to-value), meaning you can pull out as much as 65% of the value of one of your existing properties and use that cash toward the next project. However, if you know where to look, you can sometimes get as much as 90% LTV. People use cash-out options for different applications. In some cases, they take the full lump sum and apply it to the purchase and repair of a property. When the repairs are complete, they may sell it and pay off the balance or they may hold it and refinance. There’s also the option of using it to help cover what another loan won’t. If, for example, an investor gets funding for the purchase of a new property, but doesn’t get enough to cover the repair, the cash-out option will work there too.

If you’re eager to build a portfolio, you don’t have to wait any longer.

Naturally, it’s important to be mindful of how much you’re tapping into your portfolio to ensure you’re not overleveraging it. However, if you’ve got at least one revenue-generating property with solid equity, you can continue to grow and increase your earning potential with a cash-out Texas Bridge Loan.

Can You Really Be Mortgage-Free with Texas Private Money Lenders?

The mortgage-free lifestyle is the stuff dreams are made of, but many people believe it’s not within reach. There are actually many ways to accomplish this, and Texas Private Money Lenders can help set you on the path to financial freedom.

Data from Forbes Magazine concludes the average person is now leaving school with close to $40,000 in debt and one-in-ten with student debts is in default. On the other side of things, Value Penguin places the average amount of credit card debt at over $9,000 for balance-carrying households, while CNBC concludes nearly three-quarters are in debt and the majority believe they always will be. Nearly 80% of full-time workers are living paycheck-to-paycheck, and those with six-figure salaries are not immune, with close to 60% saying they were in the red.

It’s statistics like these which cause people to either make dramatic life changes or, at the very least, seek out alternative income streams. The good news is, there are many ways to approach this, depending on one’s personal style, and you don’t even have to have good credit to make it happen. It’s more a matter of identifying which strategy is right for you and pairing up with the right Texas Private Money Lenders to make it happen.

Live the Debt-Free Lifestyle with Savvy Investing Strategies

Generally speaking, property investing falls into two main categories; fix-and-flips and fix-and-hold. With the fix-and-flip variety, investors purchase an inexpensive property, upgrade it, and sell it rapidly for a profit. In most markets, each flip generates $20,000 or more, though some of this depends on the prowess of the flipper. With fix-and-holds, the investor keeps the property after repairs, either holding it until the market increases its value naturally or for the sake of renting it out to gain an income stream. There is a hybrid with this in which the flipper also lives in the home as repairs are being made as well. It’s an option worth exploring for those who don’t mind moving around a bit and can establish loan terms which allow it. Yet, these aren’t the only approaches that are being leveraged. As the housing market has shifted, there have been more people approaching Texas Private Money Lenders to get loans for Airbnb properties and even tiny houses too.

Take the first step and make your dreams come true.

Once you decide which strategy is more in line with your comfort level and goals, you can explore your options with Texas Private Money Lenders. Using this form of lending, also sometimes referred to as hard money, the property you purchase serves as collateral and you’ll usually make interest-only payments until the term is up. That gives a bit of breathing room to work through your project and enables you to qualify even if you wouldn’t normally get approved by a bank. Considering the average mortgage payment in the western United States exceeds $1,200 per Value Penguin data, it’s easy to see how eliminating the expense can totally change your life.

4 Unexpected Ways to Make Your Arizona Fix and Flip Loans Go Further

Maximizing profit earned on real estate investments is always important, but when you borrow the funds to do rehabs, it becomes that much more important. Make your Arizona Fix and Flip Loans go further by using the tricks seasoned pros do.

1. Learn which improvements make the most sense. When you’re just starting out and haven’t worked on many rehab projects, you’ll want to work with an appraiser who can point you in the right direction if your plans don’t add up. It’s possible to under-improve a home and fail to attract buyers, but it’s arguably more common for rehabbers to over-improve, meaning the property becomes too expensive compared to other homes in the area or the renovations simply don’t add value.

2. Adapt your buying strategy. Low-priced properties either encourage bidding wars or fly off the market. If you’re waiting for properties to list, you’re going to have serious competition. Find ways to catch properties before they list. Work neighborhoods and put the word out that you’re looking for rehab projects. If you need to come in with a low bid due to limitations of Arizona Fix and Flip Loans, consider bargaining with the seller or offering the seller a portion of your profits to help seal the deal.

3. Avoid properties with damaged systems. Save the homes with fire or flood damage for people who have loads of experience. If you’re using contractors to do the work, you’ll probably want to avoid properties with damaged foundations or roofs too. Old or improperly-done electrical systems can eat away at your profits as well. While you can rehab properties with damage to major systems, the best bet is to focus on homes with cosmetic damage or that are simply outdated. In rehabbing these, you can get in and out quickly with minimal risk.

4. Understand your buyers. Knowing the demographics of the neighborhoods you work is essential. Some rehabbers look to up-and-coming neighborhoods for projects. This is a good strategy, but it also means you’ll need to be very mindful about the renovations you make, so you’re not creating something that people who would otherwise move into the neighborhood cannot afford. Other rehabbers focus on the best neighborhoods they can find and choose the ugliest properties in them. This strategy will enable you to focus more on high-end upgrades and may increase your profit margins, but you’ll also be working with more intensive renovations and you’ll really need to know the buyers, so you’re adding features they’re excited to pay more for.

Find Arizona Hard Money Lenders Who are the Real Deal

Banks don’t readily provide Arizona Fix and Flip Loans because you, as a borrower, won’t be living in the house. That makes it too risky for them unless you happen to be one of the few with incredibly good credit and you’re choosing a property that’s move-in ready. Ergo, you’ll be looking to the hard money scene for funding with rehab projects. Each lender is different, so you’ll need to know how yours operates.

If you plan your rehab projects well, you’ll naturally increase profits.

Spend time getting to know all the numbers of your rehab projects before you start applying for Arizona Fix and Flip Loans. When you add up all the expenses associated with a project, from renovations to fees and the purchase price, the amount should not exceed 70% of what the home should net you at sale.

Why Smart Texas Private Money Lenders Insist on Title Insurance (And You Should Too)

Most Texas Private Money Lenders require title insurance in order to fund a deal. Although there’s some debate on the merit of this practice, it’s essential because it protects both you and the lender.

Although land and property transactions began occurring in the United States for almost all recorded history, the concept of title insurance is relatively new. Initial transactions were simple for obvious reasons. There was virtually no chance anyone else could lay claim to a property because so little of the country had been settled.

Because of this, the conveyancer system was used. Conveyancers worked similarly to title insurance companies in the sense that they carried out diligence, but they offered no guarantee that a property was free and clear. They weren’t lawyers, but rather, were local experts who could carry out research on any given property. They’d craft reports and sign off on them, which would give buyers/ borrowers and those financing purchases more confidence, but the transactions were still risky.

Watson v. Muirhead in 1868 changed this. Muirhead was a conveyancer hired by Watson to check into a Pennsylvania property. After finding a lien on the title, Muirhead consulted an attorney. The attorney told him the lien was invalid and Muirhead decided to certify the property was clear. Watson purchased the property, but it was later put up for a Sherriff’s sale to pay off the lien. The sale was legal. Watson lost his property and his money. He attempted to sue Muirhead (thus the groundbreaking case of Watson v. Muirhead), but he lost. At the time, Muirhead could have only been held liable if he had been negligent, and because he consulted an attorney and acted upon the attorney’s advice, Muirhead was not in the wrong from a legal standpoint.

The following year, the first title insurance company was formed. Today, Texas Private Money Lenders and virtually any entity handling the financing of a property requires that a title insurance company be involved in the transaction.

Title Insurance is a Win-Win Solution

While many people think title insurance is purely in place to protect the Texas Private Money Lenders, this early case highlights how important it is from a buyer or borrower standpoint too. The insurance company not only carries out the research, but pays out if, for some reason, a mistake on their part results in financial losses. Ergo, it will address things like unpaid taxes or liens that could become a problem later, existing loans, active or pending foreclosure, active bankruptcy by the current owner, undisclosed or missing heirs to the property, errors, fraud, and more.

You’ll risk less by having title insurance and can protect your own assets.

As a borrower working with Texas Private Money Lenders, you’ll have some skin in the game too. Although title insurance is not a 100% guarantee there won’t be an issue with the property later, purely because the title insurance company is using public records to certify, their willingness to pay out in the event there’s an issue protects your investment and the money that your financers are putting in as well. Simply put, getting title insurance is one of the smartest things you can do when you purchase a property.

Why, When & How to Work with Residential Hard Money Lenders in Arizona

Residential Hard Money Lenders in Arizona offer financing for homes when banks won’t. They’re geared toward helping real estate investors when they want to purchase a single-family home, multi-family property, or are managing a portfolio with multiple residences.

Starting with the basics, Residential Hard Money Lenders in Arizona focus on financing homes, versus businesses, warehouses, and similar. The loan is backed by the borrower’s hard assets, which is where the term “hard money” comes from. Hard assets can be virtually any type of property, but in this case, it’s typically the house that’s being purchased or other properties in the borrower’s investment portfolio that are used as collateral. The lenders, themselves, are typically individual people who have built enough wealth that they can support the ventures of others. They provide the funds, often because they really enjoy helping others become successful, and also because the fees you pay to borrow help them grow too. In other words, it’s a win-win solution that doesn’t pad the pockets of banks, but of people just like you. Perhaps with a few savvy investments of your own, you’ll also be in a position to support others and lend funds too.

Because the money is coming from private individuals, the loans are not subject to the same regulations as banks. This, paired with the fact that most work with real estate investors, gives the financers a whole lot more room to create custom solutions that banks can’t.

Loans are typically short in duration, with some lasting just a few months and others having several-year terms. The payments made are typically interest-only for the duration of the loan. At the end of the term, the full principal balance is due.

How to Evaluate Which Loan Type is Right for You

Residential Hard Money Lenders in Arizona operate differently than banks do on a number of levels. Banks work under a multitude of situations, but they’re geared more toward owner-occupied options. That means the borrower has to live in the home more than 50% of the time. They will also usually limit the total number of properties they’ll finance. Conversely, private money is usually for non-owner-occupied homes and is geared toward investors. It can be used for full portfolios. The requirements are totally different too. Banks will look at your FICO score, income, tax returns, and more to decide if you’re worthy. Going the private route, it’s more about the value of the asset and whether you’ve got a solid plan or not. You can also usually get your funds in a matter of days, whereas banks take months. In knowing these differences, the right choice for your needs is likely very clear.

A broker can lend a helping and get you set up.

Residential Hard Money Lenders in Arizona rarely advertise their services directly and, because of the diversity of the field, it can be difficult to find one who lends for your specific project type, works in your area, and is offering good terms. This is where brokers come in. A good broker will connect you with the right financing team for your needs and will find you the best deal too. Brokers are also geared toward cultivating long-term relationships—it’s not just about getting you funded for this one project and being done, but rather, about making sure you’re successful this time and come back to him or her for your next one too. If bank funding isn’t going to fit your needs, start by finding a broker to build a relationship with.