Setabay Private Hard Money Lender

Sunday, October 6, 2019

Funding the Down Payment on Rental Property Loans in Arizona

Securing Rental Property Loans in Arizona is not always as easy as just getting a mortgage. But some creative financing can be a big help.

When you begin to invest in rental properties, you will find that the larger the down payment, the more likely you are to get financed. Lenders like to see at least 20% down on Rental Property Loans in Arizona, but making a down payment of 25% or more is certain to get you more interest from lenders and even a better interest rate. But coming up with that large sum of money might pose a challenge. Thinking creatively could help you to make that big down payment to get a great interest rate and a really reasonable monthly payment on your rental property.

Unless you have a large savings account, chances are that you are going to need to make other arrangements when you need to make a 25% or more down payment. But one way that many first-time investors finance a first rental property is using a home equity line of credit on their home. This will provide you will a substantial amount of cash in most cases and it also allows for a longer repayment period. Many landlords will use some of the rent money coming in each month to make the HELOC payments to ease the personal financial burden.

Other homeowners will choose to refinance their home and remove the equity that they have built up. This is helpful because it does not include the extra monthly payment of the HELOC but it does increase the length of time that you are paying on your own home. This also only makes sense if you can get a good interest rate on your refinance.

Plan Ahead

If you have been thinking about breaking into the real estate investment business and you know that Rental Property Loans in Arizona require a large down payment, then hopefully you have been planning ahead. Having time to save for the larger down payment is also another way to avoid losing a property because you can’t cover the down payment. Some future real estate investors have chosen to work a second job to save for the down payment while others have decided to lower their cost of living to be able to save more. Either method works and will let you make the down payment without taking out another type of loan to pay it.

Borrow From Your Future

If you have a retirement account then you might be able to lend yourself the money for a large down payment. Many 401K plans allow you to take out a loan against your retirement savings. And in this case, the interest that you are paying is going back into your retirement account. Clearly, there are many ways to fund the large amount that you must initially put down on Rental Property Loans in Arizona, but the outcome is worth the risk. Make a wise choice on your first property, and then let the profit pay for your next property. In a few years, you can be living off of the rental income and continuing to grow your personal wealth.

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

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: 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.
© 2019 Level 4 Funding LLC. All Rights Reserved.

Saturday, October 5, 2019

Arizona Fix and Flip Loans 101

Property flipping is all the rage thanks to a few cable TV networks. And used properly, Arizona fix and flip loans can make flippers rich.

It seems that there are about a dozen or more fix and flip shows on TV at any given time. They vary in location and the type of properties being flipped but the concept is always the same. A flip is a fast process that entails buying a property, increasing the value with renovations and repairs and then selling the property just as fast as possible. The goal is to carry Arizona fix and flip loans for as short a period of time as possible to reduce the interest you are paying and to increase your profit margin. And the fastest way to accomplish all of this is to make the initial purchase with a hard money loan.

These privately funded loans are also known as asset-based loans because they are based on the value of the property being purchased rather than the borrower’s personal creditworthiness. The property being bought is the collateral and is at risk if the borrower defaults on the loan. But there are many benefits that outweigh the less than traditional nature of hard money fix and flip loans.

In most cases, a hard money loan request can be processed, approved and even funded in less than two weeks. This is because the lender’s due diligence is in researching the property being bought and not a person’s credit history. A borrower with a credit score of 550 would have a hard time getting money from a bank but most hard money lenders are willing to work with the credit challenged borrowers. The lender will sometimes request that the borrower pay upfront for an appraisal of the property but in most cases, all of the fees are due at closing when the loan is funded.

The Cost

Nothing in life is free, and hard money Arizona fix and flip loans are no exception. The lender is free to charge a higher interest rate as he or she is not required to follow the same rules and laws as a lending institution. In addition, the lender can determine the fees that will be charged. In most cases, hard money will cost five to ten points more than a traditional loan. But for the fast funding and the ability to secure the loan with a low credit score, many flippers are willing to pay the higher rates.

Many Perks

Fast funding and low credit score requirements are only two of the benefits of hard money. These loans are short term which works very well with the fast pace of the fix and flip segment of real estate investing. In addition, because the lender is a private individual, you are likely to be able to have the rest of the loan terms tailored to meet your needs. This could mean variable payment amounts, longer payment cycles or even a balloon payment at the end of the loan term. Knowing all of these perks helps to justify the cost while demonstrating why so many flippers are fond of using Arizona Hard Money Loans.

Friday, October 4, 2019

First Timers Loans To Flip Houses in Arizona

As a first-time flipper, it can be difficult to find the appropriate loan. But there are a few tips which can help you secure your first Loans To Flip Houses in Arizona.

When you are getting into the house flipping business, there are many unique aspects of the business that you will need to learn. One of the first challenges that you will face is securing your first few Loans To Flip Houses in Arizona. The process is not anything like getting a mortgage for the home that you will be living in and as a homeowner, it would be very difficult to qualify to carry two traditional mortgages at the same time. For that reason, most flippers are fond of using hard money to finance the purchase of a property to flip as well as to cover the cost of the renovations and repairs.

Hard money is a short-term loan which is designed to be used by real estate investors. These loans are considered non-traditional because they are funded by a private lender and not a bank or a mortgage company, which is considered a traditional lender. The most common term for a hard money loan is between six months and a year but the term can vary because you are working with a private lender who is much more likely to customize the terms of the loan to meet your needs than any traditional lender would.

Another reason that investors choose Arizona Hard Money Loans To Flip Houses in Arizona is that these loans are asset-based. What this means is that the amount of the loan is determined by the value of the collateral, which is the property that you are buying. So the borrower does not need to be worried about having a great credit score or a very low level of debt. This is what allows a new investor to enter the market without having saved the entire purchase amount of the property.

Hard Money Loan Down Payments

The loan that you are getting to purchase a property must always be for less than the total value of the property so that the lender has some sense of security. If you as the borrower default on the payments of the loan, the borrower will take possession of the property and sell it to recover his or her money. So to ensure that the property value is always greater than the balance of the loan, the lender will require a down payment of 20% to even 25% of the property value.

Understand The Interest on Loans To Flip Houses in Arizona

Being that hard money is both a short-term loan and an asset-based loan makes them perfect for flippers. But this convenience does come at a price. You can expect to pay anywhere from 125 up to 21% or more for a hard money loan. The lender will determine the interest rate based on his or her perception of the risk involved in the loan. The more risky you appear the higher the interest rate. But remember that you will only be paying that high rate for a few months and hard money is a great way to get your foot in the door as a flipper and a real estate investor.

Thursday, October 3, 2019

Top 3 Niches Arizona Private Money Lenders Love to Fund

Defining a preferred niche when you’re in real estate investing can help you establish yourself as an authority, which leads to better deals and more sales. Being in a preferred niche can also help when you approach private money lenders, provided you’ve chosen your market wisely.

1. Single-Family Fix-and-Flips: Going with traditional fix-and-flips is quite common and these get funded all the time. However, you may want to consider digging a little bit deeper and working a specific region, choosing a specific style of home, or catering to a certain demographic. For example, some like to work only in established neighborhoods, while others like to focus on severely distressed properties, and some prefer historic homes. Choose an area that feels right to you and run with it.

2. Multi-Family Units: If you’ve already done some fix-and-flips, multi-family units are a sound way to diversify. You can treat these as flips or repair and hold, giving yourself a steady trickle of income to help you grow your wealth.

3. Fix-and-Holds: Whether you plan to rent your space out through something like HomeAway and Airbnb or get long-term renters in to cover costs and provide a revenue stream, fix-and-holds can be a sound bet. Make sure you’ve got a method to refinance or pay off your balance when your term ends though, as loans through are Arizona Private Money Lenders typically short in duration, lasting fewer than five years.

Choosing a Niche Shows Others You’re the Real Deal

When you establish yourself in a specific niche, you demonstrate you’re an authority in that area. That’s a boon when you’re working with Arizona private money lenders, but it goes deeper than that. For example, the longer you focus on a niche, the more people learn what area you specialize in. Other investors and sellers are likely to contact you when they see a property that fits your usual guidelines, saving you the trouble of hunting them down. Buyers who need properties like the ones you produce will also seek you out, meaning you’ll spend less time marketing and homes will start selling before you’ve even listed them. On top of this, it makes your marketing easier; from your website to your business cards and even social media, you’ll be able to present yourself as the authority in an area and network more with people you can help as well as those who can help you.

If you can master one area, you can diversify too.

Being an expert in one area will help you make better connections, streamline processes, and make you more appealing to an Arizona private money lenders, but markets often run in cycles. Because of this, you should work with various investment opportunities to fortify your revenue streams. Explore different parts of your city or state, create a portfolio of rentals at different price points, and pay attention to shifts in the market. That way, you can explode your wealth in the here and now with your niche, plus will be ready and able to pivot and continue growing even if the markets change.

Wednesday, October 2, 2019

3 Things to Know Before Approaching Residential Hard Money Lenders

If you’re a newcomer to fix-and-flips, residential Arizona Hard Money Lenders can be your best ally. Learn a bit about what they’re expecting before you apply to ensure you get approved.

1. Credit doesn’t matter, but experience does. One of the reasons why working with residential Arizona Hard Money Lenders is awesome is that your personal credit score doesn’t usually matter. You can have rotten credit and still get a loan to finance your flip. Newcomers can get financing as well, but the terms you’re offered are likely to improve as you gain more experience. If you’re cash poor but idea rich, plan to start off on smaller projects first, then build up to bigger and more expensive ones after you’ve demonstrated you’ve got what it takes to be successful.

2. You’re going to have to have some of your own cash. A great broker can work miracles and find alternate ways to get you financed, but you’re likely going to have to have some of your own cash in the deal, even if it’s just to cover the cost of getting financing set up. If you’re struggling to scrape up your own cash, focus on finding one really good deal; a home that’s being sold for far less than it’s worth. Sellers can become especially motivated to slash prices during divorces or when they’ve gotten in over their heads with projects. These situations may be your best bet if you’re trying to break in with minimal cash.

3. You need to be 110% certain you won’t run out of cash. Always leave room in your budget for unexpected expenses. Sometimes newcomers are eager to get going and work with a tight budget or, worse yet, assume they’ll be able to get additional funding after the project gets underway. In reality, it’s really difficult to get extra funding partway through and most projects that run out of cash simply stop.

Your Team Wants You to Be Successful

Generally speaking, residential Arizona Hard Money Lenders are people just like you, but they’ve grown their wealth enough that they can begin investing in projects like yours. Their approach to lending is different than most. What they care about more than anything else is that you’ve done your diligence and have the ability to carry out a successful project. When you work with a seasoned broker, he will also be part of your team, helping make sure you’ve got everything in order and that what you’re bringing to the table is presented to investors in a way that gets them excited about what you’re doing.

If you know how to evaluate a good deal and need some cash to get going, HMLs can lend a helping hand.

While you don’t need to have good credit or a ton of cash to get started with fix-and-flips, you do need to have the right mindset and do your homework before jumping in. If you’re set on those, talk to an established broker who will help you get the best terms possible from residential Arizona Hard Money Lenders and get you started on the path to wealth.

Tuesday, October 1, 2019

4 Things to Consider Before You Take Out an Airbnb Loan

Taking out an Arizona Airbnb Loan and starting a business is a great way to diversify your revenue streams or begin working from home. However, there are a few key things to consider before making a purchase

1. Laws: Home sharing and short-term home rentals soared when the economy slumped. It gave homeowners the opportunity to earn some cash and vacationers a way to pick up a cheap rental. Since then, it has morphed into real businesses, and hotels are not happy about that. The good news is, letting a home is legal in most places, but there are some, such as certain parts of California and New York City where regulations are tight. Check your local codes to make sure you’re in the clear before you take out an Arizona Airbnb Loan and get started.

2. Competition: The average person is now netting $21,000 per year by renting out a second home. The opportunity for profit is big enough that competition can be a concern in certain areas. If you find an area or property you like, check how many homes within a 5 or 10-mile radius are already available and whether they’re fully booked or not.

3. Location: Demand soars in specific areas. Beaches and other types of vacation destinations have high demand. You can also target locations by airports, business centers, hospitals, and other places out-of-towners may frequent.

4. Distinction: Although short-term rentals became popular because people were simply renting out unused space, today’s market is a bit different. Your rental will need to have distinguishing features or amenities. Some people craft their places around a theme, such as a beach or local attraction. Others focus on luxury, perhaps by using premium linens and offering concierge services. Some focus on making homes family-friendly. Identify a niche and run with it. Not only will you rent out your space more, but you can command more for it.

Create Realistic Expectations when You Evaluate Your Cash Flows

As you map out the potential profitability of any given location, keep in mind that the average renter is looking for at least a couple of bedrooms and wants to spend under $1,000 per week. Add up what your expenses will be as well. Things like making payments toward your Airbnb loan, covering repairs, cleaning between guests, and stocking household necessities should all be part of your budget. If the anticipated earnings don’t leave much profit for you, move on to a different location.

You can launch your own business and work from home without needing a bank loan.

More than half of all people purchasing a second home are doing so with some form of financing, and bank loans are one way to do it for sure. However, if your credit is rotten or you don’t have other criteria the banks look for, getting an Arizona Airbnb Loan from a private hard money lender may be your best option. These are based off the value of the property you select and the home is used as collateral, so you don’t have to meet rigid requirements. Best of all, most are set up as interest-only loans, which will give you the option to begin renting your place out and generating cash without making monthly principal payments—just be sure you’re prepared to pay off the balance of the loan in its entirety when it’s due. With these things in mind, it’s easy to begin a lucrative rental business and create new streams of cash.