Setabay Private Hard Money Lender

Monday, March 20, 2017

Common mistakes made when looking for short sale homes

Rehabilitating distressed homes is a popular way to make money in the real estate business. When you are starting out rehabbing can give you many sleepless nights and stress. Short sales are a great way to begin your real estate career, however, there are some mistakes many new investors make when attempting to complete a short sale.

You have read “short sale” four times now, but what are they? Basically, a short sale is when an owner of property agrees to sell even though the net profits will not cover all the debt associated with the home. As long as all parties that own the property agree to the terms of the sale you are able to buy it. If you know how your contacts you could end up with a great home, however, if you skip a few steps you could have a lemon on your hands.

What should you be on the lookout for when considering a short sale

One of the first things you should look out for when considering a short sale property is fraud. There are many laws and practices that are in place to protect from any fraud that may happen. Perpetrators are usually taken care of by the proper authorities. While there are, many resolved cases, there are many victims that fall for the scheme.

One of the most popular schemes that people are fooled by is “flopping.” Flopping occurs when a buyer or a hard money lender in California is offer a price that does not accurately represent the value of the home. Usually, victims end up paying much more than the actual value of the home.

To make it easier to understand, the owner or lien holder will withhold information from the lender about buying the property for a low price. After they will list the property at a higher value to another buyer. Once the buyer confirms they want to pay the “fake” price. After the deal is concluded the owner pockets the difference.

Use these precautions to help combat fraud

For starters, if you are the one that is buying the home one of the first things you should do is go through the home. Make sure you take time out to go through every nook crawlspace in the home. With short sales, you are able to take a walk through of the home before you commit to purchasing it. Many foreclosed homes will have underlying cosmetic issues that you cannot always see.

Things like foundation repair, mold and mildew or electrical malfunctions can cost you more money in the end. Make sure you have the proper professionals come to clear the home for anything you might feel is wrong.

In regard to the proper authorities, hard money lenders in California also want to make sure the property is appraised by a trusted building inspector. Having an extra pair of eyes will make sure nothing slips through the cracks. When taking on a short sale make sure you cover all your loose ends.

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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What you need to start flipping homes in Texas

When you are beginning your career as real estate investor, flipping homes can be an extremely strenuous ordeal. The rehabbing process of a home in Texas could end up costing you a lot of time and money in the end. You can make a lot of money as long as you take the time out to properly prepare yourself for every investment. There are a few trade secrets that you should keep in mind when you begin.

Knowing how to or someone that is handy.

Rehabbing is not all about buying and selling homes. Sometimes a new or not so new home, calls for you to be able to get down and dirty. Being able to install a common toilet system or a being able to run a wire through a wall are great skills to have as an investor. Like we have stated before, depending on how you are buying a home, often you cannot tour the property prior to purchase. Being able to do certain small jobs on a property can take some of that apprehension away.

On the other hand, you also need to humble yourself, no one person can conquer the world. Play to your strengths and recognize your weaknesses. If you know you have no clue on filling holes in drywall, do yourself a favor and find someone that can do it for you. Having a home that looks nice to a potential buyer trumps any expenses you may incur during the rehabbing process.

Make yourself familiar with your work

When taking on the rehab business, you need to make sure you are always on your game. From what sports history tells us the most prepared player wins the most. If you are a hard money lender in Texas, you need to constantly check how the market is changing. If you are an investor, you need to know what you are looking for. Check the area that you are looking to purchase a home in. Make yourself familiar with the types of homes that are in your area, as well.

Surround yourself with a team of experts that know the business

While you should make sure you are familiar with the business, you should also make sure you have a solid team of experts around you. Should you be handy enough to fix certain small jobs in the home, however, you do need an expert that is able to do the bigger jobs. If you are not familiar with plumbing in the home do not take it on by yourself. You may feel as though you save money, in the long run, it could end up costing more if you happen to mess something up.

You might even think you should solely bankroll your investment by yourself. Having a solid hard money lender in Texas that can loan you the money you need. Give yourself a fighting chance when you start your real estate career. You will have a lot of competition, but if you follow these steps you will ensure your success.

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How do you make money fixing and flipping houses?

Let’s face you are on here to find quicks tips to making money in real estate. Becoming a successful investor or hard money lender in California is the end goal. If you manage your money well and pick solid property you can find your fortune fixing and flipping. It will not happen overnight, but here are a few tips to get you on the right track.

One of the first things you want to do is scope out the area that you think you want to flip in. Most of the time you can save some cash by looking for auctions that are being held. Most of the time these homes are being foreclosed and will have cheaper prices than cold searching through a company.

The only thing you need to worry about is the competition. These auctions are usually held in the traditional sense where you have an auctioneer and multiple people there with you. If your purse is a little light this may be difficult. Most people can circumvent this by hiring a solid hard money lender in California that is able to lend you enough money to purchase and pay for the home you are looking to buy. Most of the time you will need to have a nice amount of collateral at stake.

When you are purchasing the home or property you want to make sure you can make money back when you are attempting a new investment. Now, this can vary person to person, but as a general rule of thumb most investor get a goal for return. For some investors, this means they will not take on an investment unless they can make a $25,000 profit on it. Others want to make enough to pay off their debt. The main thing you want to focus on is what works for you.

Use your property to your advantage

Let’s say you have a property that you are looking to purchase, and instead of selling it at a higher price you opt to keep it. Depending on the area and the quality of the home you could use the property as an addition source of income. You can rent it out to a family, or you could turn it into a hostel and charge people vacationing in your area.

You can then use the funds to ask your hard money lender in California for a short-term bridge loan. After you can purchase another home and flip the property, as well. Once you get good at this method you could end up owning multiple homes that provide you with a recurring income that can help support future flips.

You should start out on the lower end

This may seem like an obvious tip, but if you choose to purchase low-end homes you may be able to save some money. Most of the time they are cheaper which can potentially mean less of a loan you have to apply for. Most hard money lenders in California will be able to work with you and your new properties, as well.

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How the real estate industry benefit from the medical marijuana market?

The cannabis industry has been, and always will be a major cash crop. With the passing of Prop 64, California has become a hotbed for the plant. California has always been known for its cannabis culture, and with more states jumping on the bandwagon the real estate industry can profit from it. Hard money lenders in California should consider lending in this area, as well.

So, how can a hard money lender in California make money in the industry?

This is simple, do what you do best, lend people money. You may be a little apprehensive about loaning money to someone who is involved with this market, but you may make a lot off your investment. Medical marijuana has been taking off like a rocket over that last few years and is estimated to be worth billions of dollars. Most of this comes from merchandise and of course the plant, but production is key when you are getting in the business. Since it is considered a part of the “gray market,” you have to be vigilant when choosing a piece of property that you want to use.

You need to make sure the property you are looking into follows certain guidelines. For example, the dispensary or lab you will ultimately open needs you follow certain zoning laws. You are obviously not allowed to open anything near a school. That facility also needs to be in a commercial area since it will be operating as a business.

Where do you start in the business?

Well, the first thing you need to do is find a building that you are able to use. Sometimes you will have to make sure you contact the city you are working in. If you are the main proprietor of the building another you want to start looking for a lender that wants to help you. A commercial hard money lender in California is a great way to start the process. Lenders, if they can see your vision, should be able to lend a sizable amount.

Depending on if you are planning to open a warehouse or a dispensary, you have a fairly large loan that you may be able to use for the facility. You could potentially be able to borrow a loan anywhere from $500,000 to $3,000,000. This is contingent on the size of your lender. The loan would typically last around one to three years with an interest rate of about 12 percent. Since the market makes so much money, you can pay off the loan quickly.

This real estate market is ripe for the picking

Cannabis is a cash crop that is going to be around for a while; well in California at least. Money can be made by everyone. With enough work and the right real estate team there could be shops and dispensaries throughout the state. On average, about 760,000 people benefit from medical marijuana in California. With the law still in its early stages, this is the right time to jump on the bandwagon.

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Wednesday, February 8, 2017

The burning answers most residential hard money lenders leave out?

Say you have just taken up residence in Massachusetts and have decided to take on the real estate market. After coming down from your lobster roll high you have realized you know absolutely nothing about real estate. You wife knew this before you finished your explanation of your half-cocked scheme to take over the Cape Cod market.

You remembered that you still have to pay for regular expenses, student loans, car note and daycare tuition for your toddler. Upon calculating all the expenses, you decide to go to your local bank for loan information.

Once they see the type of credit score you are packing they politely decline. After recovering from that hay-maker you decide to be successful the hard money route is the best option for you. But, there are some things you need to know before you take on a residential hard money lender.

When it comes to hard money loans there is some fine print you need to read

While these loans are great in a pinch sometimes they could carry a few negatives. For example, if you have done a little research you probably read that your credit score really does not matter. Most residential hard money lenders will not deny you a loan based solely on your credit score. Often they will grant you a loan based on the amount of collateral you can use.

Although many lenders do this do not start jumping for joy just yet. There are some lenders that will judge how quickly you will be able to pay off your loan by your credit score. That combined with a less than decent amount of collateral, while unlikely, you could be refused a loan.

When working with residential hard money lenders there are many fees

Fees, there will always be fees and expenses when you are taking on real estate. If you are considering a hard money loan certain actions are required to get the loan. For example, to get a hard money loan you need to pay for a title policy, insurance and you need to get the property appraised, as well. After this is done you still have to take potential repairs into consideration.

Speaking of repairs, when you are applying for a hard money loan there is an after-repaired-value that needs to be calculated before you receive your loan. Basically, what this means is once the property is appraised and the potential repairs are assessed, the loan will typically not exceed 70 percent of ARV. If there are more repairs that occur later on in the rehabbing of the property your residential hard money lender will require you to provide the correct documents and estimates before they lend you more money. This is called a “draw request.”

Are residential hard money lenders interested in interest?

Simply put yes, typically hard money loans tend to have higher interest rates. Usually, if you go through a bank you could get a lower rate, but like we said before you have bad credit. You are high risk to the Bank of Massachusetts so you have to pay a little more for your loan. Will it be extremely pricey? It could be, but there is give and take when you are in the real estate business. Some properties will be winners and others will have you in a daze with lobster hanging from your mouth.

In the right conditions, a hard money loan can be a godsend, on the other hand you could end up paying back a lot of money if you choose the wrong Cape Cod. Before you choose your next loan, you need to do extensive research on the company’s policies and the lender, well.

Happy senior business man making his notes at work Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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Should you consider a fractional investment as a residential hard money lender?

Entrepreneurship, in general, is an extremely tough and time-consuming profession. Sure, you will always find people that are running businesses, but at what cost? Most of them would live much happier lives if they would delegate a lot of the work they deal with. So, what does this have to do with someone who is a residential hard money lender?

As far as entrepreneurship goes, the real estate market is one of the toughest to grow a successful business. For hard money lenders, there is a very large amount of financial risk that is associated with real estate. Most of the time, yes, you will get your money back. Could there potentially be pushback? Yes, but most of the time you will receive your investment back.

For those bigger deals, however, you may want to take a look into pursuing a fractional investment. Basically, fractional investment is the inclusion of multiple parties that are willing to invest with you. Usually, each party receives an equal amount of ownership in the deed of trust when lending to potential borrowers. If you are just starting your lending career this may be one of the best options that you should consider when you are starting your lending career.

So, what are some of the advantages of fractional investments?

One of the biggest advantages that you immediately get from having fractional partners is the number of people you have on the team. Suppose you have started a firm and thankfully you have taken on a new client, but you have little knowledge on residential hard money lending. In this case, having two or three people that have knowledge in the industry could greatly benefit your business.

With more people that are investing in the same property, it could potentially cut out a lot of competition. When you are starting out you want as many friends as possible and as little enemies as possible. In the real estate business, you are going to encounter tons of people that will try to scalp those great finds. By adding more people to your company’s roster this could give you more money, experience and lower risk.

Those are the advantages, but what are the pitfalls of fractional investment?

With everything good, there is something bad lurking in the background. For the right people, this type of investing is great, but you are liable to run into a few issues if you and your partners are not on the same page. Fractional investing allows lenders to partner on investments; this means each person has an equal amount of stake in the property.

Without the proper amount of communication with your fellow residential hard money lenders, things could go terribly wrong. One of your investors could possibly get cold feet on about a residential property that you had agreed on. If you do not have enough money to fund the changes the property needed you could miss out on a lot of profit.

So as a residential hard money lender do you need fractional investors?

Depending on the market you should consider fractional investing. Will you always get your way? Most likely no, but if you are an inexperienced lender it would help greatly if you had someone that could mentor you for your future clients that you take on. Having more investors does mean having more money that you could put into your project, as well. You should definitely weigh all the options before you commit to fractional investing.

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Monday, February 6, 2017

Important Facts about Commercial Real Estate Loans

So you’re all set to apply for multiple commercial real estate loans, but are you really? In other words, do you know everything you need to apply?

As a savvy business person, you’ve probably done everything you could possibly think of to get ready for the world of commercial lenders, brokers and more. So, first off, give yourself a hand. Most people simply do not take the time to do the necessary research when it comes to non-residential or commercial real estate loans. Of course, it can be difficult to want to research such a topic if you are not in a true need of a non-residential loan. The truth is unless you are a business owner, the phrase commercial real estate loans just isn’t a point of interest and that’s perfectly okay.

However, as we have already established you aren’t most people. You want to be fully apprised of all things real estate and you are dying to find out if you missed any important key facts in your research. Thus, let’s get down to business. If this is your first time at the commercial real estate rodeo, there are essentially three important facts to know about non-residential real estate loans.

For starters, it cannot be stress enough that securing a commercial loans means much more than stellar credit history or strong personal financials. Good credit and matching personal financials are great. But, when dealing with a commercial real estate lender, they want to talk business i.e. what’s the current condition of the property (this includes photos, current mortgage, etc.), what are the projected day-to-day operations along with a whole host of other business-related matters such as up-to-date rent roll documentation, proof of additional incomes, new capital improvement and more. Do some of these things sound unfamiliar to you? If so, there’s no need to panic. The potentially good news is that there different sources or rather different commercial real estate lenders, besides banks. Thus, you may need the above-mentioned items plus more or you may need other required documentation that is applicable to your specific property type or lender.

The Differences between Lenders

As briefly suggested, another important fact about non-residential real estate loans is that their lenders come in all shapes and sizes. In other words, you can choose the traditional route of portfolio lenders such as banks, credit unions commercial lending corporations. If you are not the traditional commercial borrowing kind, you can also choose from government agencies such as Fannie Mae and Freddie Mac or you can choose others lenders including CMBS Lenders (transferred trust), SBA Loan (property and equipment), Private Money Lenders (for non-conventional qualifiers) or insurance companies (tailor made loan packages). The point is you’ve got a lot of options, so don’t be afraid to explore.

Recourse and Non-Recourse Advice

The third must-know for non-residential real estate loans is the difference between recourse and non-recourse loans. In short, a recourse loan means you, the borrower, are responsible in the event of default—collateral and all. A non-recourse means if things go south, the lender can typically only go after the collateral i.e. the property.

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Setabay Private Hard Money Lender

Monday, March 20, 2017

Common mistakes made when looking for short sale homes

What you need to start flipping homes in Texas

How do you make money fixing and flipping houses?

How the real estate industry benefit from the medical marijuana market?

Wednesday, February 8, 2017

The burning answers most residential hard money lenders leave out?

When working with residential hard money lenders there are many fees

Are residential hard money lenders interested in interest?

Should you consider a fractional investment as a residential hard money lender?

So, what are some of the advantages of fractional investments?

Those are the advantages, but what are the pitfalls of fractional investment?

So as a residential hard money lender do you need fractional investors?

Monday, February 6, 2017

Important Facts about Commercial Real Estate Loans

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