Setabay Private Hard Money Lender

Friday, January 24, 2020

Why Fix and Flip Loans in Arizona are Awesome for REOs

REO properties make great investments, but financing the purchase can be a challenge. Fix and Flip Loans in Arizona work especially well for REO purchases because they eliminate barriers.

As you search through property listings, chances are you’ll see the term “REO” quite a bit. It appears on listings for both investment properties and consumer properties, and references that the home is “real estate owned.” In short, the bank owns it, not a person.

Properties become known as REOs when the homeowner defaults on the mortgage and a foreclosure occurs. People wind up in foreclosure for many reasons, and the banks don’t like to take homes away from people, so the homeowner gets a chance to make things right during a pre-foreclosure process. During this phase, the homeowner can either get his mortgage caught back up or sell the property. Banks will even sometimes allow the homeowner to sell the property for less than they owe on their mortgage just to be done with the whole thing. If the homeowner does nothing, then the property will go to auction. Many investors use Fix and Flip Loans in Arizona at auctions as well, purely because they’re usually cash-only, meaning the buyer can’t try to apply for a mortgage after. He has to be able to pay for the purchase right away. If a property doesn’t sell at auction, then the bank takes ownership of it and it becomes known as a REO.

Naturally, banks aren’t in the home-selling business, so it’s their goal to unload the property as quickly as possible. Additionally, REO properties tend to be in disrepair, simply because the initial mortgage-holder is often unable to handle maintenance on the property for some time prior to defaulting on the mortgage. The foreclosure process takes months to complete too, increasing the timeline proper care hasn’t been given to the home. Because of these things, REOs can often be purchased fairly inexpensively.

One of the Pitfalls of REO Properties is that Banks Financing May Be Out

Regardless of whether you’re an investor or an average person looking for a new home, the banks may turn up their noses at your REO property. This usually happens when it’s in ill repair, but things like your credit and whether or not you plan to live in the home matter too. That doesn’t mean you can’t or shouldn’t purchase the REO, particularly if you’re getting a screaming deal on it, only that Fix and Flip Loans in Arizona may be better-suited to the job than a conventional mortgage.

Hard money can get you into a REO when the banks won’t.

Hard money Fix and Flip Loans in Arizona work differently than mortgages. You’ll typically take the money out for a short period of time; such as a few months or a couple of years. During that time, you’ll make interest-only payments and then pay off the balance at the end of your term. Things like the condition of the property and your credit are less of a concern, but you’ll need to have detailed plans for how you’ll repair the REO and know when/ how you’ll pay off the balance. If you plan to live in the home and the initial condition of it prevented you from getting a traditional mortgage, you should be able to qualify once the repairs are complete. If you’re a rehabber who likes to repair and sell, you’d pay off the balance as soon as the property is sold. In other words, don’t let the term “REO” scare you away from a property. Instead, research it well and explore alternative lending with a broker. You just might find you’re getting the deal of your dreams.

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.

Thursday, January 23, 2020

Why Banks Don’t Like to Give Loans to Flip Houses in Arizona (And What You Can Do About It)

Going to banks for Loans to Flip Houses in Arizona usually results in a big fat “DENIED” letter. The good news is, there are other ways to increase your eligibility for funding.

Working on fix-and-flips can increase your wealth dramatically, especially if you’re already handy or have some experience in real estate or finance. However, getting your hands on financing, particularly for your first few properties, is a real challenge because traditional financing doesn’t work. Banks will typically tell you “no” for one of three reasons;

1. You’re not living in the home. Banks like owner-occupied homes because the person making the payments obviously needs a place to live. In other words, you’d move mountains to keep your home, no matter what else happens in your life. If you’re not living there, the bank will likely consider offering any kind of cash too risky.

2. The property is not in good repair. Some of the best fix-and-flip deals have serious issues, like roof or structural damage. They can’t be lived in because of this. If the bank were to give you Loans to Flip Houses in Arizona and you didn’t make good on payments or fix it, they’d be stuck with an unlivable house that they’d have to fix before unloading. It’s an expensive and undesirable situation for them.

3. Your credit isn’t spectacular and you don’t have business credit yet. It takes small businesses quite some time to establish credit, especially if you’re asking for tens of thousands or hundreds of thousands of dollars. In most industries, the business owner uses his or her personal credit until the business is established, but most people don’t have strong enough credit to cover the large amounts of cash needed for purchasing a property. If you already have a mortgage for your own home, that’s a double ding. They’ll be looking at it from the standpoint of making two mortgage payments; something most people cannot do.

Increase Your Eligibility by Choosing Alternative Funding

Banks aren’t the only ones you can go to when you need Loans to Flip Houses in Arizona. Oftentimes, people in the industry go with hard money instead. This refers to financing based on the value of an asset, rather than the criteria banks usually use. It’s easier to get and it doesn’t matter if the house is a wreck or if your credit is rotten. You’ll also hear it referred to as private money, simply because the people financing your project are regular people versus institutions or banks.

A seasoned broker can help make your dreams come true.

It probably goes without saying, but private individuals with cash to invest don’t hang around street corners asking people if they need cash. To get Loans to Flip Houses in Arizona with great terms, you’ll need to work with a broker who is familiar with multiple investors and can match you with someone who’s a good fit for your project. A seasoned broker will also help you shore up your plan if need be, so the deal looks good to investors and you have more success with your rehab projects. Whether you’re just looking for info or already have a property picked out, speak with a broker who works with hard money and you’ll increase your chances of getting approved dramatically.

Wednesday, January 22, 2020

Why Few 100 LTV Arizona Hard Money Lenders Exist (And What You Can Do About It)

If you’re looking for 100 LTV hard money lenders, you’re likely to find few, if any, options. The good news is, there are still ways to fully-fund your real estate investments if you’re savvy.

Before the big market crash, people could find 100 LTV Arizona Hard Money Lenders with relative ease. Obviously, not everyone offered loans worth the full value of a property, but home values were increasing at such rapid paces in most markets that a successfully-funded deal, even at 100% of what it was worth at the time of closing, could climb 5-10% or more in value before the project was even finished. That was one of the big draws to getting into the fix-and-flip market. It was incredibly difficult to lose money doing it.

That being said, the market crash changed a lot. Nowadays, fix-and-flips are still a lucrative field to get into, but you have to be smarter with your numbers because you can’t count on increasing market values to bring you profit; you’ve got to buy low, repair fast, and sell high. Moreover, getting 100% of the value at the time of the sale is unlikely, purely because the market isn’t climbing as fast. Most areas are still climbing, but at nowhere near the rates that they once were. Because of this, it’s more likely that you’ll get a deal funded at 60% of the value, with a few outliers climbing as high as 90%.

If that 90% isn’t going to get you where you need to go, you still have options. First, going with alternative lending means you can make an offer with cash-in-hand. Motivated sellers like that because it means they’re free of their problematic or junk house fast. They don’t have to worry about their buyer qualifying for, and possibly being denied, a traditional mortgage. That means you can often negotiate a better deal for the property, meaning your cost to purchase it would be lower and you’ll have more wiggle room for financing. As a second option, you can also consider cross-collateralization. Instead of relying solely on the value of the property you’re repairing, you could use another investment property or even your own home as collateral too.

An Experienced Broker Can Lend a Helping Hand

If you can’t find 100 LTV Arizona Hard Money Lenders and you’re still struggling for ways to fund your project, an experienced broker can help. Regardless of who funds your deal, they want you to be successful, and so if you’ve got a great property and have the knowhow, a broker can help locate a lender who understands your position or identify other ways to make sure that your deal goes through.

A successful project is a win-win for everyone.

Ultimately, you may not be able to find 100 LTV Arizona Hard Money Lenders or someone to fund a project, but that’s a lesson in and of itself. Savvy investors know when a project isn’t going to be a win, and they’re able to move away from it without emotion and onto something that is going to generate real returns. Find a good project, work with a seasoned broker who can find you the best terms possible, and build up from there.

Tuesday, January 21, 2020

How Long Can Hard Money Loans Help You?

Hard money loans are used for many purposes and come with a variety of financing terms. Depending on who you partner with, you could have months or years to repay the balance in full.

Before getting into how long you have to repay Arizona hard money loans (HMLs), it’s important to distinguish what makes them different from other lending options. People tend to gravitate toward this form of alternative funding when bank options just won’t cut it. For example, if a business needs to buy equipment, but the owner has rotten credit and the business hasn’t established credit yet, he might turn to an HML. People who work in real estate investing use them a lot too. They’re helpful because they close faster than traditional mortgages, so an investor can grab a good deal before someone else does. Banks recoil at the thought of financing homes that are in severe disrepair as well, so someone in fix-and-flips might use an HML while he fixes up the property. Someone purchasing a fix-and-hold, like a vacant apartment complex in disrepair, might use an HML during the repairs, then refinance under traditional terms with a bank after; once the bank is no longer put off by the condition of the property.

Most of the time, the money for these projects comes from private investors, or individual people who have done well enough for themselves that they’re able to finance the projects other people do. That means the requirements to qualify and the terms offered will be a little different depending on who is doing the financing. You’ll also find that brokers get into the mix because they help connect businesses and individuals with the lenders and help them find a lender who is going to get them the best terms possible.

When it comes to repayment terms, many lenders do not expect you to pay toward the principal while the loan is active. Instead, you’ll likely make interest-only payments, then pay off the balance in one lump sum at the end. This can either be at the end of your term or before, provided you have the means to do so. For example, if you finish repairing a fix-and-flip and get it sold in half the time you anticipated, you could pay off the balance then and there.

Terms Typically Run from a Few Months to a Few Years, Depending on Your Needs and Eligibility

Arizona Hard money loans are usually based on the value of an asset. In the case of equipment, it’s often the value of that equipment, but a business owner could also use property to secure the loan. When it comes to real estate, the property secures it. This means that becoming eligible for an HML is easier than qualifying for funding through conventional channels. However, your lender will also look at things like your ability to pay (cash inflows), your experience and plans for the cash, and the location of the property too. All this and more goes into deciding how long you’ll have to repay. That said, most people have somewhere between three months and five years to take care of the principal.

Alternative lending may be right for you if you know how to craft a successful exit plan.

Before applying for funding, create a solid timeline of when you’ll either be able to pay off the balance through the sale of your asset or by refinancing. When you know your own timeline and what it will take to get you there, provided you’re looking at 3-60 months, you’ll have a much easier time qualifying for hard money loans in Arizona that fit your needs.

Monday, January 20, 2020

How to Choose an Exit Strategy with Hard Money Lenders

Arizona Hard Money Lenders offer short-term loans that typically last no more than five years but can sometimes be measured in months. You should have an exit strategy in mind before you get started using this form of lending to fund real estate deals, though knowing when to pivot away from your initial plans is crucial to your success.

Many people in the fix-and-flip biz work with Arizona Hard Money Lenders because it enables them to get cash fast and credit is less of a concern. In these cases, selling off the property as soon as it’s completed is the traditional route, purely because it allows the investor to collect and move onto his or her next project. Sometimes, however, a market downturn can mean selling it right after completion is not the best choice. People also use alternative lending for fix-and-holds. If the property is generating income or is expected to increase substantially in value, then it’s generally advantageous to hold onto it for some time. Neither is wrong or right; they’re merely different investment strategies based on the goals and preferences. With the fix-and-flip, selling off the property is a natural exit. With a fix-and-hold, you’ll need to evaluate whether your ideal selling point will fall within the terms of the loan or if it makes sense to refinance.

All that said, an important first step is to determine how much you’re actually paying as you hold the property. Your loan and interest are only one component, as there are always additional costs such as upkeep and property tax. Create a detailed list outlining all expenses associated with holding, so it’s easier to determine whether it’s best to sell or collect rental income.

Interest rates can also help you determine when it’s time to get your initial loan paid off. You may have one year or even five years to pay off the balance, but if interest rates on your refinancing options drop, and it’s your plan to continue holding for years to come, it may also make more sense to do the refi earlier rather than later.

Learn About Multiple Exit Options and Know How to Evaluate When it’s Time to Shift

Depending on which Arizona Hard Money Lenders you work with, there may be absolutely no penalties for doing an early payoff. Some are glad to have you pay off the balance early because it typically means you’re moving onto another project they can fund. This in mind, it’s important to do a comprehensive cost-benefit analysis before you purchase a property to identify the best time and method to exit. You’ll also need to keep an eye on market conditions and interest rates as you hold the property to make sure your initial projections are still going to provide you with the greatest amount of profit.

The more data you collect, the more successful you will be.

Experienced real estate investors don’t rely on intuition to tell them when to sell. They use hard data and build projections based on that, then keep a pulse on market and interest conditions to make sure they’re still on track. This not only helps them get top dollar on each project, but makes them more appealing to Arizona Hard Money Lenders when they go in to request funding.

Sunday, January 19, 2020

How to Get Residential Arizona Hard Money Loans

What are residential Arizona Hard Money Loans? How through your hard money broker at Level 4 Funding, you can get the necessary help and the financing you need.

Residential loans are home loans that are not intended to be used for commercial returns. Instead they are intended to allow a borrower to purchase a property in order to use it for personal housing. Loans can be received to finance a variety of different property types in a variety of different locations.

In the spectrum of hard money lending, Residential Arizona Hard Money Loans are not offered by most Arizona Hard Money Lenders. This is due to the restrictions of the Dodd-Frank, which after the Great Recession changed many of the residential housing regulations especially regarding subprime lending. Because of the Dodd-Frank Act, there are more regulations private money lending for residential purposes. Most Arizona Hard Money Lenders do not want to deal with the bureaucracy and the difficult processes associated with Residential Arizona Hard Money Loans or do not specialize in this area of loans. Those lenders who do deal with Residential Arizona Hard Money Loans tend to focus on a subniche: residential rehab, family residential, multi-family residential, etc..

Residential hard money is able to help individuals purchase: apartments, condos, mobile home trailer parks, multi-family units, raw land, single-family properties, and vacant land. Financing for these types of loans requires cash down in order to fulfill the loan to value stipulations of Arizona Hard Money Lenders. An acceptation to LTV cash down restrictions would depend on personal assets with a strong, positive equity position which would create enough security for the hard money lender.

Talk to Your Residential Arizona Hard Money Loans Broker at Level 4 Funding Today. Get started and Find the Funding You Need

Determine the type of residential property that you need a loan on. Evaluate what assets or cash down you have to leverage in order to begin the application process to receive a hard money loan. Then speak with your hard money broker to find the right lender and rate to finance the property you are interested in.

Avoid pitfalls! Level 4 Funding is here to help you receive your hard money residential loans. Talk to a broker today!

Your hard money broker will guide you through the process and help you to understand whether you qualify for a hard money residential loan and if so what type of hard money residential loan would work best for you.

Saturday, January 18, 2020

Can You Make Money With Fix and Flip Loans?

If you’ve been a part of the major viewing base of popular HGTV series like Property Brothers, Fixer Upper, and Flip or Flop, you may be interested in the potential profit that comes from home renovating and fixer uppers. But where do you get the best fix and flip loan?

Borrowers can turn to public money lenders or Private Money lenders for any of their loan needs. Public money lenders consist of banks and credit unions, while Private Money lenders are private companies and investors. The major difference between public and private lenders is that private lenders offer hard money.

Hard money is an alternative to traditional loans that have flexible requirements compared to the loans offered by traditional lenders. Even though hard money is a great primary option for borrowers struggling to meet major loan requirements, it is a great loan for those renovating homes. Interest rates and fees can be higher than other loans on the market, however, with the right plan, you can X.

Benefits of Hard Money

The real estate market is competitive. For borrowers who want to make a quick buck, obtaining the ideal property is a must. Not just any home is ideal for renovating, and first-time renovators will want to choose a property that is safe. On a market that moves quickly, having the money to make a bid is a must. Here’s where hard money comes in.

Hard money works fast. Independent lenders have the ability to get the loan process moving much faster than traditional lenders. The loan process can get moving in as fast as 48 hours! If not, at least within the week. This beats the process of traditional lenders who may need as much time as a month.

Additionally, hard money loans offer flexibility. When working with a private hard money lender, you are much more likely to be seen as an individual. You can work one on one with your lender who can help seek out the best option for you and your financial situation. That means your financial history is not as important. You will have to prove your ability as a borrower, but you won’t need to feel as stressed if your financial history is not perfect.

Of course, hard money is also ideal for fix and flip loansbecause of the speed within the loan repayment period. Renovating for a profit means you want the process to go as quickly as is safe for the project, but you also want a quick sale. Typically, hard money has a quick repayment period which naturally fits the time period of home renovating.

Hard money lenders in Arizona

If you are looking for fix and flip loans in Arizona, look no further than the hard money lenders at Level 4 Funding. Our qualified team of mortgage brokers can help find the best loan for you and your financial situation. With hard money lenders that work directly, the stress of renovating single and multifamily real estate. Give us a call today!

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
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.