Setabay Private Hard Money Lender

Wednesday, May 8, 2019

100% LtV hard money lenders, almost non-existent, but they are out there.

This type lender is the rare species in the real estate field—Arizona Hard money loans are everywhere, but few are funded at 100 % Loan-to-Value. Interested? Need this kind of deal if you can find it? Be prepared for some hard work.

Loan-to-Value Arizona Hard money loans are not difficult to find, but in most cases, the cutoff ends at 65 percent of the property’s value, not 100. A statement saying the company offers complete financing, as would be lenders have discovered, actually may be offering 100 percent of appraised value or perhaps 80 percent with a bridge loan thrown in to cover the gap.

There are good solid reasons for this. First, the risk is very high for the lender who has no means of recoup if the borrower is putting nothing down. The would-be borrower may be neither financially capable nor solvent. Finally, the borrower could be inexperienced in the field and could easily make costly mistakes the lender would have to assume.

However, 100% LtV Arizona hard money lenders do exist and have their own methods for operating in an area that is known as risk-filled, confusing and tends to have rules that they stick to just as tightly as a bank would.

First, let’s talk about what these lenders offer that differs from others:

-Speed: they can close in less than five business days and sometime within 48 hours.

-Qualifications: they look at your project and the amount of the LtV, not your credit and income.

-Documentation: you won’t put miles on your car, spend hours on the phone and have an aching back from carrying the load of paperwork required; this type loan doesn’t require the ton of documents that traditional financing does.

-Loan terms: unlike the banks again, these loans have repayment terms of 12 to 48 months, not a stretch of 30 years with interest equaling more than principal.

Hard money is normally dispensed by individual investors or a group of investors going in together as opposed to a huge corporate bank. This allows for a very flexible structure in the loan agreement—both funder and client can omit terms they find undesirable, allowing some very individualized deals to be funded and set up.

If you not only find a 100% LtV Arizona Hard Money Lender, but work with this person or business again and again, you may receive purchase money in less than a full business day. As a buyer this is a decisive advantage to have in a sizzling hot market over other more traditional purchasers. But as in other areas, experience counts here since most lenders who do 100% loan-to-cost will only work with an experienced investor--new investors minus money and lacking background will have a lot of problems finding funding of those sort.

100 percent funding is again that rare thing in the commercial real estate business—it is also not set up for long term deals but more for the fix-and-flip project. After all, if you’re aiming to sell your property in a short period of time, a non-traditional lender would be more interested in setting you up seeing their way through at the very beginning.

Should I pursue this area of funding? If you are grounded in the real estate business world, have funding to put down and don’t mind having to practically get a detective’s license to find the person you want to conduct business with, go after that 100% LtV hard money lender. It could be one of the better decisions you have ever made.

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.

Bad credit commercial mortgage lenders—should you use one of these?

(While the words ‘bad credit’ summon up all matters of negative images, these mortgage lenders are in business to assist customers who, for one reason or another, cannot go through the traditional lending process in order to obtain funding.)

This scenario is rather common, since bad credit is found across the country affects all types of people from the poorest to the richest (every week or two, it seems, some billionaire declares bankruptcy although it doesn’t seem to hurt them like it does the average person.) Would be borrowers fall into numerous categories that affect their getting mortgage funding. The most common among them are:

· The self-employed, particularly those with tax liens or judgments showing

· Past bankruptcies or having short sales in your in your financial history

· Borrowers with a slow payment history

· Borrowers who need debt consolidation due to many outstanding draining their cash flow

It is advisable when applying with this type of lender to go to the trouble of having your past credit problems documented and explained in detail since this information will aid you in approval. The lender wants to know for certain that the issue has been taken care of and is in the past.

Bad credit commercial mortgage lenders offer a large number of helpful services to their would-be clients. These can include lending that is not based on a FICO score, no minimum credit scores, consideration/understanding of past bankruptcies and judgments, terms for up to a 30-year period, loans with an LtV value of 75 percent and debt consolidation loans that can be easily approved.

These are all positive aspects of this type lending. When a bad credit commercial mortgage lenders’ requirement of less documentation and uncomplicated application process is thrown in with the usual practice of fast approvals and closings, the overal outlook is a good one. Not to mention a source of relief for the borrower who has found that taking a friend’s advice sometime in the distant past and declaring bankruptcy was a decision that followed him throughout his life, it seemed, no matter what they did.

Bad credit currently shows up as factor not only in lending, but in applying for a job, renting an apartment and abstract things like setting up phone and cable tv services.

You will pay more using these type of lenders—the more risk they feel they are taking, the higher interest rate they will charge you. Some business loans are tied to your personal credit and you may be asked to ‘guarantee’ the funding. Failure to repay or missed/late payments will reflect on your both your personal and business credit in this instance.

Do not let a negative phrase throw you—most of the time these loans are termed No Credit Check loans in advertisements. Use the Internet to find those lenders who are best reviewed, talk to friends and colleagues whom you trust and use this knowledge, along with your own intuition, to find out if a bad credit commercial mortgage lender can help you with your business funding.

Advantages of Commercial Private Loans

Commercial private loans cover most any type of project and can be used practically without any restrictions. Would this type of funding aid you in your search for project money? Look more closely and find out.

A commercial private loan strictly speaking is defined as any business financing covered by a corporation or private firm that is not a bank. These loans are almost always set up as debt financing built through factoring, a line of credit or just basic loans. Potential lenders are not required to give up their company equity in order to be approved for this type financing.

This type of loan is designed to bridge the hole not covered by traditional banks, which have little or no flexibility in their loan structures and underwriting procedures. A private loan does not have many of the rules and regulations attached to the more conventional ones and can be more imaginative with its clients’ needs. These loans can meet almost any business financing need and still keep the percentage of risk at a low level for both the lender and the borrower.

An example of how this works can be described by this scenario. Your credit score is 600 which narrow the chance of a bank providing the money for even a very good sounding project down considerably. On the average 60 percent of most banks’ loan customers are rejected due to the strict rules covering loans. Private loan applications are approved, on the other hand, as high as 85 percent of the time. Other good things about this type of funding for your future project include the small amounts of documentation to be provided, few covenants, and a quick closing once you are approved. Better still you aren’t presented with a list of areas that you can’t use the money for once you get it.

These particular loans are particularly good for small business owners who generally have small amounts of capital, especially after they invested it all in the long list of things, material and otherwise that are required to simply start a business.

What are the harder aspects of a commercial private loan?

Yes, these loans are good, but a borrower will pay a higher interest rate than he or she would if they went to a bank. This is due to how much risk is involved—the higher the chances of no repayment by the borrower, the higher the rate of interest that will be charged. Banks don’t take a large amount of risk so their rates can be lower. Private lenders want to see that the business borrowed for is generating some revenue as well, so you will need to have proof of that.

Like any loan, learn all the requirements involved and what you will be expected to do once approved. Commercial private loans have a lot of advantages, but need to be handled as carefully so you and the borrower have the best lending experience possible. After all, you may want to work with this individual in the future—good business relationships are a real advantage.

Tuesday, May 7, 2019

Does your latest project need a Arizona commercial hard money loan?

Read on and learn some of the things you need to know in order to evaluate if your latest venture would be better funded by these types of loans. You need to know the differences for starters between them and traditional lenders.

Commercial loans are taken out for everything from hotels and apartment buildings to office high-rises and hospitals. Overall most all commercial loans made through hard money are secured by real estate collateral only. The loan-to-value amount can be up to 70% of the property value with an interest rate averaging around 7.99%. Origination fees can be around 1.75. One of the best things about these loans is the absence of a prepayment penalty—if you are eager to pay off your loan early and have the funding on hand, there will no charge for it as is often found in other more conventional funding arrangements. Repayment periods can be up to 36 months, but not longer than that generally.

Two other pleasant positives are the lack of an income requirement and no minimum FICO score, two things that a bank or a mortgage company always look at first--hard and long--before going any further with an application.

Throw in the smaller amount of documentation required and the swift turnaround to closing once you are approved and things begin to look really good for your project that may not have gone so well thus far because sometimes despite meeting all the qualifications one of two small glitches will decimate your chances with conservative lenders such as the older more established banks.

If Arizona commercial hard money loans are that good, you wonder, what are the negative factors? There when you need them, yes, however, you need to study the possible disadvantages of these loans also.

The following four reasons are why this funding is often described as not the best of choices in the list of available loans:

1) Down payments: down payments are higher here, particularly when the borrower’s credit score is low. They can be up to 25 percent. Sometimes, but not often, the down payment can be in the same area as banks.

2) Fees: defined by point, fees can be two to four percent of the total loan; banks do not charge these.

3) Higher interest rates: these loans can have an interest rate ranging up to 10 percent higher than a bank or mortgage lender.

4) Shorter repayment period: unlike banks which set their payback periods up to five years, these loans are pretty well set on return payments finishing out at the end of three years.

The old expression ‘Do your homework.’ fits very well here—a would-be borrower needs to look at all the facts and familiarize themselves with both sides of Arizona commercial hard money loans (and most other things, too) before taking one out.

Use the computer to find the facts, show a trusted friend or professional your true situation and ask their advice. If you are certain you can handle this funding afterward, get out there and find the lender that best suits your situation who can help you succeed in your ambitions.

What is a trust deed investment?

Should you use this type of funding? Read further and find out how this may help you.

Positive factors include: when set up correctly, these kinds of investments can produce a well-turned current yield while running only a low risk.

Hugh single-digit returns can be earned, as high as 10%, coming along monthly.

The prospect of loss in this type investment is hedged by a safety margin, that being the difference between the total loan amount and the worth of the property. If the borrower fails to repay the money, the lender involved can take possession, sell the property to recoup funds as well as any interest attached. It is possible for an investment to have an LtV of 65%, making it very advantageous to the borrower in case of foreclosure.

What are the disadvantages of this type investment?

Negative aspects include: A trust deed investment may generate income for you, but it will not appreciate in value like a basic real estate investment of property can do.

Other areas affecting the borrower in a less than positive light include real estate values dropping sharply and quickly, a lawsuit affecting the property title, mistakes made when the property is accessed and the value being less than appraised for. These are just some of the things that could possible go wrong when investing in this type of deal.

Banks are very reluctant to do this type of investment since they want to make money off a loan—a loan that pays off in six months does nothing for them. Banks want loans that can stretch out over time, up to 30 years in a lot of instances.

Seeing that traditional investors are somewhat unwilling to take this on, a hard money loan person might be your best bet—these lenders specialize in working ‘out of the box’, catering to investors who have less than perfect credit, are self-employed, etc. These lenders charge higher interest rates than the traditional ones as well as origination fees. A bridge lender who may make loans on property in too bad a condition for conventional funding might also assist here—their interest and fees are set up to be somewhat lower than a straight out hard money loan’s would be.

Great care and in depth research needs to be done when making a trust deed investment. Make certain that that everything is in order before you make this investment, particularly that the property value assessment is correct and that all the attached legalities have been cleared. There are other points to be checked as well—knowing the overall picture is important. You cannot turn your investment back into liquid cash the next week if you have a change of mind as you could with a blue chip company or municipal bonds.

What should I do since I am really interested in Trust Deeds?

Talk to friends who are in the business; find an attorney or certified public accountant and get their views on trust deed investments. When possessed of all the facts, pro and con, then study them and make up your mind—this type investment may be just the one for you. Go after it, but keep your eyes open to all the details involved.

How to Find Colorado Hard Money Lenders

Finding the right hard money lender can help first-time and even seasoned real estate investors succeed at their chosen field. There are several factors to look for and reasons why this type of financier is good for those entering this challenging field.

A hard money lender is a private investor who lends based on collateral. Usual terms are anywhere from 6 to 12 months, although many will extend these depending on the individual circumstances. One of the benefits of this type of investor is that they are much more prone to develop a personal, though business-based, relationship. It’s a lender that you can often call for advice and, if the relationship proves beneficial for both parties, many years of lending and borrowing on various real estate projects can be expected.

So, just how do you find these private money lenders? There are several ways to track them down. Before the advent of the World Wide Web, most Texas private lenders were found through networking or introduced by friends or family. In the shrinking world that we live in now, lenders can be found in a matter of minutes with just a few minutes of browsing. This, of course, makes it more important than ever that a borrower understands the basics of lending and what to look for in a private hard money lender.

While the basic benefit of a hard money lender is considered their process of lending based on assets instead of credit, there are additional attributes to look for. If the borrower is looking to get into this lucrative business for the long haul, they will want to consider a lender that they feel comfortable with, and one that they can turn to for multiple projects. When looking online, be sure to check for reviews and don’t hesitate to request references. Lenders often specialize in certain fields, so be sure to choose one that has experience in your field whether it be the fix-and-flip model, renovating and renting, or quick turnarounds on ideal properties that require little makeover.

Property Types for Texas Hard Money Loans

Most commercial properties will fit into a private investors lending model. Just be sure, as we mentioned, to obtain a lender that specializes in your type or investment strategy. These may include multi-units, single family homes, commercial properties and even industrial properties such as warehouses or distribution centers. One area of investing that Texas private lenders use to steer clear of was properties with no buildings—just land—and mobile or manufactured homes. Fortunately, times are changing.

At Level 4 Funding, we offer construction loans, bridge loans, loans on multi-family units, as well as manufactured homes, warehouses, and distribution centers.

Because we work with hundreds of private lenders, we undoubtedly have an investor that specializes in your field. It’s not uncommon for a borrower to have several lenders to choose from. At Level 4 Funding, we are here to steer you through the process and help you make choices that are best for your real estate investment business. Call us for a no-obligation quote, or two.