Setabay Private Hard Money Lender

Saturday, April 27, 2019

How to Make Money with Owner Occupied Colorado Hard Money Loans

Owner-occupied Hard Money Loans in Colorado are fantastic for real estate investors who are just starting out but have dreams of making a big splash. Here's how to leverage one to dip your toes into the real estate biz.

A lot of people love the idea of getting into real estate investment. After all, it's a great, time-honored way to build wealth. Many back down, though, when they see how expensive it can be to get started. That's where owner-occupied loans come in. They offer dreamers with a bit of entrepreneurial spirit the opportunity to build, even when they don't have a lot of scratch to bring to the table. Before we look at how to use one, let's look at how they differ from a typical loan.

As the name implies, owner-occupied means you intend to live in the property you are buying. HUD homes and foreclosures often require you to do this for at least a year before converting it into a rental property, and many HOAs also have a similar requirement (though these can be much longer).

Non-owner occupied means the purchaser won't be living at the residence. These are important distinctions when it comes to the mortgage industry. An owner-occupied loan will generally receive better terms because the lender sees it as a smaller risk.

A Great Bet for People Just Starting Out

When you're first starting out on your journey to real estate domination, you usually don't have the fat wallet and a great credit history that banks drool over. Owner-occupied Hard Money Loans in Colorado are secured with collateral and they use funds from private investors, so lenders are more concerned with your tenacity than your bank account and past transgressions. Even better, they come through in a matter of days, meaning you can jump on that dream property faster than with a bank loan. And, here's the beautiful thing that happens when you end up living on the property: you fall in love. You learn all the nuances of the home; you put your blood, sweat, and tears into it to make it the best it can be. The love and attention you give it will pay dividends a few years down the road when you're ready to sell or convert it into a rental property.

Get Ready to Grab Your Paint Brush

If you've found a great property and you're ready to grab a paintbrush and start your adventure, give us a call. We can talk about your dreams and figure out the best way to finance them.

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 Find and Finance a Rental Property

If you're thinking about becoming a landlord for the monthly income and property appreciation, you're probably full of questions about how to make it happen. Here's a guide that covers all the basics, from researching properties to getting a Colorado Rental Property Loan.

Research, research, research. Take a course on real estate. Make friends with local agents. Read up on property values. Study the trends of every neighborhood in your area. Being well-informed will go a long way toward making the right decision about your investment property.
Know your cash flow situation. To figure out whether you can make money as a landlord, you need to crunch the numbers. Know how much you can afford by figuring the following expenses into your calculations: mortgage, maintenance, insurance, taxes, utility bills, and any association fees.
Find the right financing for your situation. If you've got near-spotless credit, a sizeable down payment, and a great history, you may be able to go through the banks or credit unions. You might get a low interest rate, but securing a bank mortgage is more difficult these days, plus they can take a while to come through. Private loans may be a better alternative. Regardless, knowing your options ahead of time is important.
Find a good price. Now that you know how much you can afford, you can begin your search for a property. Look to pay 10 to 20 percent below market value. To find that gem, work with an agent with plenty of experience in the area, or look for a property that needs repairs or updating.
Set your rental price. Consult with other landlords, check out the ads for rentals in the area, and use online rent pricing tools to arrive at a good number. Obviously, you need to make sure you're making a good profit after the mortgage, taxes, and monthly maintenance.
Screen tenants. Here's where you can save yourself the most stress. Finding a responsible, clean renter who pays on time will make all the difference. To do this, get a background check, call previous landlords, and think about paying for a screening service.

Getting a Hard Money Colorado Rental Property Loan

If the banks and credit unions are turning you down (or you just prefer to work outside the conventional banking system), a hard money Colorado Rental Property Loan might be the way to go. You'll use collateral to secure the loan, so you won't have to jump through the same hoops.

Colorado Rental Property Loans in Colorado

Level 4 Funding offers Colorado Rental Property Loans of up to 90 percent LTV with flexible terms and no prepayment penalties. Plus, you can get funded in a matter of days! Call us today to find out how.

Friday, April 26, 2019

How a Bridge Loan Saved This Colorado Family

Can a loan help a family find a safe haven? This is the story of John and how a Colorado Bridge Loan helped his family survive a tough road.

Everything was going great. John graduated from high school at 16 and college at 19, an accounting wunderkind, and landed his first job in finance at the tender age of 21. Soon after, he met Mary and fell madly in love. After a wild few years of travel and exploration, they settled down. First came Alex, a precocious boy with a shock of blonde hair that gave him movie-star good looks in high school. Then came Laurie, a sweet girl with dreams of being a fashion designer.

Along with the kids came the need for a bigger house. After all, the kids needed their own rooms, Mom needed space for her stay-at-home business, and the whole family needed a kitchen that could accommodate everyone's food needs. They found a nice 4-bedroom in a high-end development outside of Denver and the kids thrived. Alex was a triple threat, playing baseball, football and basketball at the local high school, while Laurie excelled in her studies and did every extracurricular option the school offered.

Then, a perfect storm. The recession hit. John was laid off. It came time to pay for Alex's college tuition and room and board. Mary's business dried up. Now, the family was stuck with a mortgage payment they could no longer afford. They decided to sell but it was too late. The market was belly up and no one was interested in a big house in the suburbs. Plus, that big house in the suburbs had lost half its value in the meantime.

Still, it was their only option. The house sat on the market for a month. Then 2 months. Then 3 months. John and Mary found side work, but it was barely enough to stay afloat. Soon, they would drown. They wanted to downsize to something affordable but without the proceeds from their current house, there was no way they afford to buy something else.

Finally, after nearly 6 months of trying to sell the house, John found a buyer. They would be able to sell the house, but the process would take two months. In the meantime, the family was able to take out Colorado Bridge Loan. It allowed him to get into a smaller house with a more affordable mortgage while he waited for the current house to close. When it did, life calmed down. They turned the Colorado Bridge Loan into a new mortgage with ultra-low rates. That new, low-stress lifestyle meant that they could pay for Alex and Laurie's tuition, take vacations and ride out the recession.

Is It Possible to Flip Houses in Colorado with Little to No Money?

It might seem impossible, but it is possible to do a flip without any money down. One way is a Colorado Fix and Flip Loan, but let's break down all the options.

There are three common ways to get a property for no money down that you intend to flip. Here they are:

Wholesaling the fix and flip. Wholesaling means selling a purchase contract before you've even bought the property or properties. To do this, you'd find an investor (or a network of investors) and use a document called an Assignment of Contract. This document says that another buyer can take over your buyer's rights before you've closed on the property. You and the investor would share the difference in the profits. This method can be better than plunking all your money into a property, but it also involves a lot of expertise and a silver tongue.
Using Private Money. If you can find a cash partner, you can divide the cost — and, more importantly, the risk — with another person or two or three. Those people could be family members or friends. Or they could be an investment group that goes in together on a smart real estate move. This option is good for people who have at least some experience fixing and flipping properties.
Hard money Colorado Fix and Flip Loans. If you have an existing property that's paid off, you can use that as collateral for a Colorado Hard Money Loan. Colorado Hard Money Loans have more relaxed qualification criteria, so even if you have bad credit or foreclosure in your past, you may be able to get funding. They are typically offered for short periods of time — often between three months and a year — and the interest rates can be higher than a traditional bank loan. This type of loan is ideal for people who already own property and have some experience flipping (although sometimes hiring an experienced contractor can be enough).

Finding the Right Fix and Flip Property

Whether you go with private money, wholesaling or hard money, you'll need to spot the opportunities that will make investors willing to invest. Make sure you're running all the numbers and leaving enough potential profit for everyone to make money. We recommend buying in an established neighborhood or one that's up-and-coming.

Colorado Hard Money Loans for Flipping Properties

We have a lot of experience in the Colorado Fix and Flip Loan business. If you're looking to make a sound investment with little or no money down, give us a call today to see how we can help make it happen.

What Happens If You Default on a Colorado Hard Money Loan?

It's the scenario borrowers (and lenders) dread the most — what if you can't pay back your Colorado Hard Money Loan? Let's look at some of the consequences. Hint: they're not as scary as they may seem.

Everyone who borrows money has the intention to pay it back. And every lender lends money with the intention of getting it back. In a perfect world, this harmony would remain intact. However, life can be messy. There are unforeseen circumstances that get in the way. The property that looked golden ran into all sorts of roadblocks that killed your profit. The city's unreasonable laws messed you over royally. The timeline you'd so meticulously planned went off the rails and you just don't have the cash to make the payments.

With a bank loan, you might default and receive notices for months before the bank would take your property back and evict you. Then, the short sale or foreclosure would be on your record for years and years to come and that can put a serious damper on your ability to make a living or find housing.

Three Scenarios After Defaulting on a Colorado Hard Money Loan

But what about a Colorado Hard Money Loan? By the harsh sound of the name, Colorado Hard Money Lenders would knock on your door and break your fingers, mafia-style and threaten to make you sleep with the fishes.

The reality is much different. Hard money comes from private investors and is sometimes brokered by third parties and this changes the rules a bit. Many lenders are willing to work with you and come up with a repayment plan that works.

Some lenders will have a clause in the contract that will up the interest rate if you default. For example, the rate could go from 7.5 percent to 11 percent. This gives the borrowers more time to come up with the payment and gives the lender incentive to let things go on longer.

A lender could also foreclose on the property, just like the bank. However, unlike the bank, there is another option. Rather than be foreclosed upon and have that on your record for many years, you can often choose to give a deed in lieu of foreclosure. This may satisfy the loan, leaving you free and clear, and leaving your credit score and history intact.

Colorado Hard Money Lenders in Colorado

Every Colorado Hard Money Lender is different and every Colorado Hard Money Loan can be customized to fit your situation. Call or chat with us today to find out how much you can get and how we can work together to get you the funding you need.

Thursday, April 25, 2019

Do Colorado Hard Money Loans Affect Your Credit?

Because Colorado Hard Money Loans are private loans that operate outside the traditional banking system, we get this question a lot around here: will a Colorado Hard Money Loan affect my credit? Let's break it down as clearly and succinctly as possible.

The answer to this question comes down to the differences between a conventional bank loan and a Colorado Hard Money Loan. When you get a common mortgage or loan through the bank, they will run your financial life through a system of checks to see if you're the type of person who will pay the loan back. This will include peering into your bank account to make sure you've got enough for a sizeable down payment and looking at your financial history to make sure you haven't had any major blemishes. The folks at the bank will also run a credit check to look at your score and see if you've had a short sale, bankruptcy or foreclosure in the past. If you have, or if your score doesn't pass muster, they'll reject you flat out.

When they check your score, your credit will take a small ding, typically in the range of five to 10 points. If you end up defaulting on the loan, your credit score will take a major hit and it could haunt you for years to come.

Loans from Colorado Hard Money Lenders work differently in several defining ways. For one, they're offered by private investors so there aren't any major regulatory hoops to jump through. More importantly for our purposes, they're secured by collateral. This means that the lender knows he or she will be able to recoup a loss in a worst-case scenario. Because of this, lenders aren't as concerned about credit scores and past histories. In fact, some may never even check your credit score, meaning you wouldn't even take the small hit you would from a bank.

What if You Default on a Colorado Hard Money Loan?

If you fail to pay back a Colorado Hard Money Loan, the lender can often take action. First, they would probably try to work with you. Barring that, they can foreclose on the property. However, many lenders will also accept a deed instead. It's an important distinction — in the case of a foreclosure, your credit will be affected. With a deed, your credit will remain untouched.

Where Can You Find Out About Colorado Hard Money Loans?

If you're thinking about going the hard money route, you'll want to find out as much as you can first. We're here to help. Give us a call or chat with us online at any time to find out what type of loan will work best for your situation.