Setabay Private Hard Money Lender

Wednesday, May 1, 2019

10 Questions To Ask Hard Money Lenders

It is important to have a list of questions to ask all of the Arizona Hard Money Lenders that you are considering. The answers will help you to make the best selection for your needs.

When interviewing hard money lenders, it is critical that you have a list of questions for each to answer so that you have a means of comparing all of your options. With the following list of questions, you will gather all of the information that you will need to make a good selection for your next hard money loan.

One of the first questions to ask is how long it will take to process the request and fund a loan. This will give you an idea of the when to expect the funding so that you can inform the property owner. Most lenders will offer to fund in under two weeks. Knowing that information, you should then determine what the interest rate will be to borrow the money. This is a very important factor, especially if your budget is tight on the project. And finally, you will need to know the maximum loan to value that each lender will offer. Knowing this tells you how your down payment will be.

Loan terms can also make or break a deal. You will need to know how long the term of the loan will be and also what are all of the costs and fees that you will need to pay. It is a good idea to have these items listed in writing and also when you request the loan, ask for the total cost of the loan so that you are assured of no hidden fees. This is also a good time to ask Arizona Hard Money Lenders to verify the down payment that is required.

Other Terms

Most Arizona Hard Money Lenders will not prohibit the use of the loan fund for repairs but you should ask each lender just to be certain. This is also a good time to ask each lender if they are willing to defer the interest payments until the end of the loan. Some lenders require monthly interest payments while others could defer some or all of the interest until the end of the loan term. You should also ask if there are any ways that you could get a lower interest rate. In some cases, a lender will lower your interest rate if you make a larger down payment or if you can increase your credit score before the actual time of the loan request.

Compare Apples to Apples

Having a list of questions prepared to ask all of your potential lenders will help you to get all of the information that you need to make a well-informed decision. In some cases, it could be worth paying a little more for a loan that offers a longer term or other benefits such as deferred interest or a faster funding time. But you will only learn about this information if you ask the right questions.

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.

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Tuesday, April 30, 2019

4 Reasons Investors Like Arizona Hard Money Loans

While not all investors understand hard money loans, those who do know that when used correctly there is a great potential for return on investment. Below are four of the biggest benefits of these loans.

Not every loan is right for every type of property, and in some cases, a property can be in a condition that makes it difficult to secure any loan at all. But smart real estate investors know that Texas Hard Money Loans can be a great resource because of all the great benefits that they offer over a traditional bank loan. These asset-based loans open up a lot of doors for credit challenged investors as well as investors who have a great many projects running in succession.

By far, one of the biggest benefits of Arizona Hard Money Loans is the fact that the entire process is far less stressful and much faster than a traditional bank loan application. The bank will require a myriad of documents to prove your financial status, but Arizona Hard Money Lenders are only interested in a few tax returns to make sure that you can keep up on the loan payments. And once the bank has all of your documentation, they pour over it for weeks before making a decision. A hard money lender is likely to review your documents and the property information and respond within a day or two.

An additional benefit of Arizona Hard Money Loans is that the terms are all negotiable. This included the interest rate, the length of the loan and even the loan amount. Banks have set terms for all of this and are never willing to negotiate. But working with a private lender means that you can get the customized loan that you need, not the loan that some banker wants to give you.

Long Term Working Relationship

As a real estate investor, you are going to need loans for each project that you undertake. The benefit of working with a hard money lender is that you can cultivate and grow the relationship to benefit you both. A bank could have a dozen loan officers but you will not see a new face with each loan when using a long time hard money lender. And as your history and relationship grow, so will the benefits and the comfort level of requesting a loan. That is a huge stress reduction for any business person.

Great For New Investors

As a new real estate investor, you will find it very difficult to meet the loan criteria of a traditional bank. They will require a stellar credit score, a minimal debt to income ratio and years’ worth of tax and banking statements to even consider lending you the money you need. But a hard money lender will just ask for tax docs and the particulars on the property that you are looking to buy. If you have made a wise selection and the deal looks profitable, then the hard money lender is going to be willing to take a chance on you. So, it is clear to see why many investors favor using hard money for their projects.

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Top 5 Criteria Arizona Hard Money Lenders Are Looking For

Securing loans from Arizona Hard Money Lenders is not like getting a loan from a bank. Knowing what these lenders are looking for is critical to a borrowers success.

There are numerous benefits to hard money loans, but unless borrowers are aware of the five main criteria that Arizona Hard Money Lenders are looking for, they will miss out on these great loan opportunities. A simple application process is definitely one of the biggest benefits to hard money, but lenders still will require some information and documentation to approve a loan.

Even though Arizona Hard Money Lenders base a large part of the decision on the value of the collateral, there is still some interest in the financial health of the borrower. Lenders are not really worried about the borrower's credit score as much as they are interested in the borrower’s ability to make the payments on the loan and to pay the carrying costs of the property. Most lenders will ask to see two year's tax returns to verify income. The tax returns are a good way to see overall income and that also benefits any investors who are self-employed and do not have check stubs or a w2. In addition, most lenders will ask for a personal financial statement to evaluate the borrower's debt to income ratio. Again, having the ability to make the payments is all that the lender cares about.

The value of the property is a major concern and consideration for lenders. They want to see that the property holds the potential for a good resale that will turn a profit for the borrower. Again, this is a security measure for the lender and assures that he or she will get repaid. Along these lines, it is also important to note that most lenders who offer hard money will require that they are the first lien holder to ensure that they get repaid.

Borrowers Need Experience

An experienced borrower represents a lower risk that someone who has never flipped and investment property before. Lenders are willing to take a certain amount of risk for a set level of profit. But if the borrower has no experience, then the level of risk increases, as does the interest rates and the likelihood of a default on the loan. Lenders don’t want the hassle of trying to sell a property to recover their money. They want payments on time and easy interest. So having an experienced borrower is a huge advantage and one that will secure a hard money loan.

Professionalism Counts Too

As with any business transaction, professionalism is a clear benefit. Lenders are looking for borrowers who are well prepared and have their documentation ready when they submit a loan request. Documents such as LLC organizational documents, lists of previous purchases and completed projects, plans for the current project and a timeline and exit strategy will all demonstrate that the borrower is experienced in the process and knows how to get a project completed on time and on budget. Meeting these five main criteria will all but guarantee that Arizona Hard Money Lenders are going to be eager to fund your request for hard money.

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Self Employed? Here's How You Can Still Get the Loan You Need

Think you can't get a home loan if you're self-employed? You actually can, and it's easier and cheaper than you might think. Let's look at Colorado Self-employed Home Loans.

In the old days before the recession, you could walk into a bank, verbally tell them how much you make, and walk out approved for a home loan. These days, things have changed. Of course, this is generally a good thing — it will keep people who can't afford to make payments from taking on too big of a house. This, in turn, should keep the housing market from disintegrating the way it did 10 years ago.

However, there's one group of people who have been left out in the cold by the new Dodd-Frank regulations — the self-employed. You can have spotless credit and a healthy down payment, but if you don't have those official pay stubs, the bank could slam the door in your face.

A lot of self-employed people give up there, assuming that there's no way they can get the funds they need for their home purchase. Thankfully, there is another route.

Home Loans for the Self Employed

Colorado Self-employed Home Loans do exist but you won't find them at the bank. Where you will find them is with private lenders. Private lenders work outside the conventional banking system, so they aren't as beholden to the regulations as the banks. That means they can choose to take on a risk and loan money to a home buyer if they want to.

There are a few distinct advantages to this approach. The biggest is that you don't have to produce pay stubs; you can show a bank statement or a tax return instead. You can also get approved much quicker (as little as 1-2 days) and get the money much quicker (sometimes as little as a week). And, because it's private money, the lender is flexible; you can work together to find terms that work for both of you.

Self-Employed Home Loans in Colorado

Looking for a self-employed home loan in the state of Colorado? You've come to the right place! We specialize in these types of loans and offer some of the best terms in the business, including credit qualifications down to 620, rates as low as 4.99 percent, and no prepayment penalties. Give us a call today to find out how we can help!

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 Qualify For Arizona Hard money Loans

Texas Hard Money Loans are not as tough to get as borrowers often think. The name is actually very misleading once you understand what it takes to really qualify for hard money.

The term Arizona Hard Money Loans is somewhat misleading as it makes most borrowers think that it is very difficult to get these loans. But what the word hard is actually referring to is the hard collateral or real estate, that is being used to secure the loan. There is really nothing hard or difficult about qualifying for these asset-based loans.

Asset-based lending is quite different than traditional lending in that the approval for a loan request is based on the value of the collateral for the loan. In most cases, the collateral is the property that is being purchased but in some cases, the loan could be secured with another property that the borrower owns outright. Unlike a traditional loan, where the credit history and current debt load of the borrower are the main criteria for qualifying for a loan. But there are a few other points that a lender will take into consideration when evaluating Arizona hard money loans.

In most cases, the lender will provide up to about 70% of the money required for the purchase of the property. This means that the borrower needs to have a down payment of up to 30% of the cost of the property. Lenders will require that the borrower show proof of the funds that will cover the down payment before the loan is approved and funded. Not only does this motivate the borrower as he or she has personal funds invested but it also creates instant equity in the property. This is a security feature for the lender. In the event that the borrower defaults on the loan, the lender will be able to take possession of the property and sell it for at least as much as the outstanding loan balance.

Cash Reserves And Stability

In addition to proof of the down payment funds, the lender will require proof of financial stability and the ability to make the loan payments and other carrying costs associated with the property. If the borrower has a good amount of reserve cash, then the lender is more likely to approve the loan and could even offer a better interest rate as the loan represents less risk. Too many real estate projects grind to a halt when unexpected costs or issues arise and the investor is not able to pay the added costs. In these cases, the loan often falls into default and the lender is forced to try to sell the property to recover his or her investment.

Experience Counts

The real estate investment business can be very challenging. Lenders know that this business can derail many new investors who think that property flips are a great way to make some fast cash. One of the critical ingredients for a successful investment is a borrower who has experience with Texas Hard Money Loans and with real estate investing. These borrowers are far more likely to be successful and also far more likely to secure a loan with a reasonable interest rate. Meeting these three criteria will pretty much assure a borrower that his or her loan request will be approved.

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Monday, April 29, 2019

Arizona Commercial Hard Money Lenders VS. A Bank

Not all borrowers are familiar with the benefits of Arizona Commercial Hard Money Lenders. Knowing the difference between bank loans and Texas Hard Money Loans is very important when seeking a loan.

Many borrowers hear the phrase Arizona Commercial Hard Money Lenders and they picture a group of unsavory characters who are doing business in dark alleys and in the basement of old condemned buildings. But that is not even remotely accurate. Arizona Hard Money Lenders are just private lenders who are offering loans based on the value of the collateral being offered rather than the credit score and credit history of the borrower. And as you might guess, adding in the word commercial simply refers to the type of property.

Because the lenders are private and not traditional, meaning banks and mortgage companies, they are free to finalize the terms of any loan in any manner that they see fit. But there are some general terms and numbers that can be used when comparing these private lenders to traditional lenders. In the past, when private lending was not as popular, the terms and rates were less generally accepted, but in today’s competitive market and with larger numbers of Arizona Commercial Hard Money Lenders, the terms are very similar.

When seeking a loan from a bank, the approval is based on the borrower’s income, credit score, tax returns, and other personal financial information. A private lender is basing the loan approval primarily on the value of the real estate being used as collateral for the loan. So, for the borrowers with a FICO score under 700 who get turned down by more banks, hard money is a great option. In addition, traditional lenders require a huge mountain of documentation to verify all of the borrower’s financial information, but a private lender only needs to get some very basic personal information and then some details on the collateral property.

Time Is Money

In the world of real estate, time is a very, very valuable commodity. And unfortunately, nothing in the traditional lending world moves quickly. A bank or mortgage company will require a loan committee review all the borrower’s documents and financials to determine if the loan application will be approved. But a private lender can quickly and efficiently review the collateral property’s information and determine if the loan can be funded and the exact amount of the loan. A bank or mortgage company is likely to drag out the loan approval and funding process for as long as three months while a private lender will often times have the loan funded in under ten days.

Upfront Fees

A traditional lender is going to charge fees regardless of the decision to fund or reject a loan application. There could be inspection, appraisal, application and research fees that must be paid even before the first document is reviewed. But Arizona Commercial Hard Money Lenders are going to be much more likely to charge only a minimal fee is any at all before determining if the application will be granted or rejected. Understanding the differences between working with a traditional bank and a private lender will certainly help borrowers to make a more well-informed choice when seeking a loan.

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