What do you do if your client has a bad credit score and wants to buy a home?

As a Real Estate Agent, the obvious answer is to very politely 'fire your client' and put them on your Christmas Card List.

Hopefully they will solve their credit issues and you can show them homes in the future.

Don't waste your time on this want-to-be buyer; they are never going to qualify for a loan. But wait; there is good news.

Recently there are a large amount of lenders who are now willing to take a risk on borrowers with bad credit.

When lenders consider a borrower's loan application, the lender looks at:

ü Down Payment,

ü Ability to Pay and

ü Credit Score.

There are a lot of potential clients/borrowers who have a good down payment, and great income stream, but for some unknown reason their life is a mess and their credit is in the dumpster. (Bad credit is typically someone with a FICO score less than 580.)

Today there are Arizona Lenders who will lend to an Arizona borrower with bad credit if they have a substantial down payment and can make the payments.

Rates are going to be high, and the lender is going to be picky about the type of property and use of property.
Also there are some dead stop issues, such as outstanding judgments, tax liens or pending litigation. (In most cases judgments and tax liens are paid in escrow/closing.)

So if you have a client with bad credit, check to see if they have a large down payment, typically 30% and are free of any judgments and tax liens.

If they are, and can qualify for the payment, they can get the home they are dreaming about, and you can close the deal and we can get them the loan.

If not, 'fire them, move one' and don't forget to say say Merry Christmas.

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444

Technorati Tags: bad credit,home loan with bad credit

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 and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Interest and Fees You Will Pay for Commercial Real Estate Loans Texas

Considering the long and arduous application process, you might be happy to simply get approved for any commercial real estate loans Texas, but you need to evaluate the cost of each loan. Selecting the loan with the lowest interest and fees will save you a great deal of money.

Whenever you are shopping for a loan, the first item that you look at is the interest rate and that is also important on commercial real estate loans Texas. The rate that you will be offered is going to depend on the type of business that you are in, the financial condition of your business and also you creditworthiness. In some cases your business will not have enough credit history to secure the loan and you will need to provide your personal credit and financial information to secure a loan as a guarantor on the loan.

The interest rate on commercial real estate loans Texas tend to be a bit higher than on a residential mortgage because of the increased risk that it represents to the lender. Because the value of commercial property is more volatile, lenders want to get a little bit better return on their investment. It is not uncommon to find rates ranging from 3.5% to around 6% depending on the type of lender that you are working with. The loan to value rate of the property can also influence the interest rate. The more money that you put down the lower the percentage of the price of the property you are financing. This means that the lender is willing to give you a slightly better rate. The primary reason is that they are concerned with the property holding enough value to cover the outstanding balance on your loan should you default. So the larger down payment means that you have instant equality and the lender is more confident that they will always be able to recover their investment in you.

Understand the Fee Structure and Payment Timeframe

In addition to paying interest you will pay fees to get commercial real estate loans Texas. You will be required to pay for the property appraisal, legal costs, the loan application fee, the loan origination fee and also the survey fee. Some lenders want these fees to be paid prior to the loan approval and others will simply apply the fees annually. If you are not sure that you will qualify for a loan then you will want to be careful to select lenders who will waive the payment of fees until after the loan is approved. Also, you will need to pay the appraisal and survey fees to all lenders as they are legally bound to complete those tasks themselves and cannot “share” the appraisal or survey documents.

Know the Total Cost of Borrowing Money

There are many terms and costs that are unique to commercial real estate loans. Knowing what all of these terms mean and how they will impact your ability to make payments is important. But the most important factor is knowing the total cost of the loan that you are requesting. Adding all of the fees to the interest will allow you to better compare your options and select the loan that is truly the best deal to meet your needs.

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Important Criteria When Getting a Commercial Mortgage Texas

When you are applying for a commercial mortgage Texas, it is important that you know what lenders are looking for. Knowing this information will help you to get the best possible rates.

As you have learned more about the commercial mortgage Texas process, you learned that your creditworthiness is an important part of the equation. Having a credit score over 680 and having no foreclosures or bankruptcies is a basic must to qualify. In addition, your business needs to be three or more years old to demonstrate stability. But you have also learned that a lender is going to be looking at more than just your business to determine if your request is a good risk. The lender will be evaluating the property that you are purchasing to make sure that it meets certain criteria.

The location of the property can play a big part in getting approved for a commercial mortgage Texas. Lenders know that most business owners will be leasing a portion of the property to tenants to assist in paying the mortgage. Having the property in a large metro area will make it a more desirable location for tenants. Building in remote areas, rural areas or places with poor access are harder to lease. This increases the likelihood of the borrower defaulting on the loan at some point.

Leasing History is Critical

Another factor that the lender will want to investigate is the lease term that could be in place. If there are tenants in the building currently, how long does their lease extend? Having a tenant in place from the previous owner is great but having them locked into a long lease is even better. This is simply another sign that the borrower will have extended income from the property and is likely to have less difficulty in making the monthly payments. In addition to any current leasing information, the lender will take into account any past lease history of the property. Have there been any long term tenants in recent years? Has there been a lot of tenant turnover in the past? Again, the lender is trying to gauge the desirability of the property from a tenant’s perspective. Having a strong lease history is a key factor in securing a commercial mortgage Texas at a great rate. It helps to prove that the property will have a positive cash flow in the future and that the borrower will continue to be able to make the payments on the loan.

Property Condition Counts As Well

Another important factor in how desirable the property is to tenants in the overall condition of the building and the grounds. If the property is in disrepair then it will be hard to sign tenants to a long term lease and even harder to keep them in place. In addition, a property that needs a lot of work can quickly turn positive cash flow into negative cash flow. Repairs and renovations can quickly eat up cash and make it difficult to make the mortgage payments. Knowing what a lenders looks for in a commercial property can help you to select a property which will meet your businesses needs and also appeal to a lender as a solid investment.

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Steps for a Successful Commercial Mortgage Texas

Having a plan to follow makes any process easier and that is certainly true for getting a commercial mortgage Texas. These steps will help you to determine a time line and know what to expect as you complete the process.

The first step in securing a commercial mortgage Texas is finding the best lender to meet your needs. You will want to speak to several lenders and gather information before you make your selection. If you have a strong relationship with your bank then this can be a good place to start. You might also want to research online which lenders provide the most loans in the price range that you are planning to spend. Selecting a lender who is accustomed to financiering loans of a certain dollar amount is wise. This means that every step of the process should be well documented and from application to approval the process should run smoothly. You can also speak to a broker for a recommendation.

Once you have selected a lender, then you are ready to begin the application process for a commercial mortgage Texas. There may or may not be a fee for the application process and that will depend on the lender that you have selected. Most lenders will require that you submit financial statements including business and personal records from the last three years. Some specific documents would include operating statements, tax returns, bank statements and net worth statements. When you speak to the lender they should be able to provide you with a detailed list of the documents that they will require.

Once you have submitted your documentation, the lender begins the evaluation portion of your commercial mortgage Texas. Using the financial information that you provided they calculate the likelihood of you being able to make the payments on the loan on a regular basis. While this process is underway, another group will be conducting a background check and credit check.

Property Evaluation is the Final Step

The lender will set up a property appraisal, which you will be paying for, to determine the current value and condition of the property. They will also research the title of the property to be sure that it is clear and able to be transferred. You will also need to pay for an environmental inspection of the property. This is to make sure that the soil is not contaminated and that there is no health risk or danger. Once all of the inspections are completed, all of the findings will be evaluated as a whole to determine if you will be given the loan.

Completing the Loan Agreement

If you are approved for the loan then you have one more round of paperwork to face. It is best that you involve a lawyer who specializes in commercial loan documents. They can review the document for you and be sure that the terms are correct and that you understand the contract prior to signing it. If you have any questions about terms that you do not agree with, then your lawyer can return the contract and request that changes be made. Once both you and the lender agree on terms, you sign the contracts at the closing and also make the down payment. Funding will typically be available within a few days of the closing.

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Mistakes to Avoid When Applying for Commercial Real Estate Loans Texas

Understanding the process for securing a commercial real estate loan Texas will help you to avoid wasting time and being declined. The process requires more than most business owners grasp or are prepared for.

Businesses can seek a loan for many uses but one of the largest loans that you might be seeking is also the most complex. Seeking a commercial real estate loan Texas is a process that needs to fully research and understood to ensure that you are successful in getting your loan and also that you get the best loan to suit your needs. Avoiding a few of the most common pitfalls along this journey can insure that you enjoy a successful application process and can purchase the property that your business needs. The first step in the process can be one of the most critical. You need to shop for the right lender who is offering terms that fit into your budget. This also means that you will need to be familiar with the terminology of commercial real estate loans to be able to accurately compare the terms being offered. It is also important to remember that even though you have an existing relationship with a bank, you will want to explore other options to seek what is currently available.

Your next selection can be equally as important as the lender that you select. As with any legal document, you will want to be certain to have a lawyer review the agreement prior to signing it. Selecting a lawyer with experience working in commercial real estate loans Texas is critical. This will insure that the loan paperwork is in order, that you are getting the deal that you asked for and that the terms are fair and legal.

Know What You Can Afford

You have obviously reviewed your business finances to be certain that you are ready to take on a commercial real estate loans Texas, but you need to have a strong plan in place. Your business plan is a good starting point as that was drafted as a guideline for the growth and progress of the business. But now you need to include how you are planning to pay off the debt of your new building. This might include reducing other costs and expenses, increasing your product line or offering products to a larger market. Not only will this help you to be certain that you can repay the loan but it will also help to give your lender confidence in your ability to make the payments.

Be Prepared On All Fronts

As a business owner, you are familiar with the stresses brought on by the ever changing business landscape. For this reason, you need to be very well prepared both financially and professionally. Having cash on hand for unexpected expenses or to cover the cost of the fees of your loan is important. This planning also demonstrates your financial responsibility to your lender. In addition, you need to have all of your financial documentation in order. This includes all of the profit and loss statements, bank statements and balance sheets current and available for the lender to review. It is also important that you have your personal finances in equally good order. These could be important if your business has little credit history or is only a few years old. Avoiding these common issues will make your application process much less stressful and will increase your chances for a loan with great terms.

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

The Process for Commercial Real Estate Loans Texas

As the name implies commercial real estate loans Texas is the means that you will use to borrow money to purchase a business property. But what you might not know is how the process works and how you need to prepare.

When you begin to look at commercial real estate to purchase for your business, you will find that the prices are quite high. The only reasonable approach to purchasing a property is to get commercial real estate loans Texas. But don’t fool yourself into believing that this is just like getting your home mortgage loan only a little bit larger. The process is much more complex and will require careful and detailed planning on your part to be successful.

The first important fact to know is that commercial real estate loans Texas are secured by a lien on the property that you are buying. This is a document that gives the lender the legal right to seize the property if the borrower does not make the payments or fulfill any of the other terms of the loan agreement. In some cases there are very detailed clauses in the lenders agreement about the types of other loans that the borrower can enter into or the types of business partnerships or agreements that they can enter into during the time frame of the loan. This is just one reason that you would want to have any loan document reviewed by your legal professional prior to signing it. If you fail to meet any of the terms, even those that are not associated with making the payments, you could be in violation of the agreement and face a foreclosure.

In addition to the security of holding a lien on the property, the lender is going to require that you build instant equity in the property by making a down payment of 20% to 30% of the cost of the property. This is because the value of commercial real estate is more volatile than residential property. The economy can cause the price to fluctuate more quickly and drastically and the lender wants to be certain that the value of the property is always in excess of the loan amount. This insures that if the lender is forced to seize the property, then they can sell it to recover their full investment.

Learn the Terminology

In order to fully understand your commitment to the lender, you will want to take some time to learn the terminology that is common in commercial real estate loans Texas documents. This is how you will learn about the time period that you have to repay the loan and also how you will determine the total cost of the loan, the interest and the fees.

Have Your Documents in Order

It is also important that you have all of your businesses financial documents in order prior to applying for a commercial loan. You will need current and historical bank statements, rental agreements, balance sheets and tax records. If the business has no credit history, is only a few years old or has no previous loans then you will also need to be prepared to submit your personal financial information to the lender. This could be used to determine your creditworthiness to personally guarantee the loan for the lender. Knowing this information can help to make the process less stressful and more successful for your business.

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Understanding the Repayment Terms of Commercial Real Estate Loans Texas

It is important to understand that the repayment terms of commercial real estate loans Texas are not like a personal mortgage for your home. Not only is the dollar amount larger but the terms are often much shorter.

Many business owners have some very unrealistic expectations when they start to look at commercial real estate loans Texas. They are expecting the same type of terms that they would get on a residential mortgage and are alarmed when they learn that is not the case. Where a residential real estate loan is typically 30 years, commercial real estate loans are broken into two main categories regarding their length of repayment term. The shorter of the two types is an intermediate term loan and it is three years or less and the longer term loans range from five years to twenty years. So the shorter term can make it much more difficult to repay the large loan amount needed for a commercial property purchase.

Another difference is that only some commercial real estate loans Texas are amortized. An amortized loan is one in which the loan gets repaid in fixed installments until you have paid back the entire amount. It is the same type of payment that most consumers have on their home mortgage. You make payments each month, at a fixed amount, which covers both principle and interest. But many commercial real estate loans Texas are not amortized so at the end of the term you are facing a balloon payment. The balloon payment is usually quite large but the reason many business owners elect to use this type of loan is that the monthly payments are lower. During the course of the loan, the borrower is paying only the interest on the loan amount so the balloon payment ends up being almost the entire amount of the principle. When this occurs, most businesses are forced to refinance the balloon amount to a new loan.

Beware of Prepayment Terms

As a homeowner, you are looking forward to any opportunity to pay a little extra on your mortgage to save some money on interest. But that is not normally the case when you are talking about a commercial real estate loan. There are several clauses that are added to the contract to protect the lender from the loss associated with an early payoff. A prepayment penalty is a fee or penalty that is calculated by multiplying the current outstanding balance by a specified prepayment penalty. An interest guarantee is a specific amount of interest that the lender is entitled to even if the loan is paid off early. And a lockout states a specific time period in which the borrower cannot pay off the loan. It could be a stated as a 5 year lock out and the borrower would need to wait longer than 5 years to pay off the loan.

Understand What You are Agreeing to Prior to Signing on the Dotted Line

There are many differences between a commercial real estate loan and a residential real estate loan. The biggest difference is the dollar amount but the differences in the terms are what you need to be aware of. Knowing the different repayment terms and clauses will help you plan how and when you will repay your loan.

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage