(Securing Arizona Hard Money Loans is not the same process as getting a traditional loan. But the good news is that this is a much easier process.)
Almost every consumer knows the process for securing a traditional loan for a mortgage or other financial need, but they also know that it involves a great deal of time and documentation just to get the application process started. But most borrowers are not at all familiar with the process of securing Arizona Hard Money Loans or even understanding what these loans can offer.
A hard money loan is also known as an asset-based loan because there is collateral required to secure the loan. In most cases, the collateral is the property that is being purchased, but it can be other property that the borrower owns if the loan is for a business startup or other need. What this means for borrowers is that the lender will be more interested in the collateral and its value than he or she is about the credit score or creditworthiness of the borrower. This is not to say that a very low credit score is not going to have a negative impact on the interest rate, but it won’t be a deal breaker in most cases.
When preparing to request Arizona Hard Money Loans it is important to prepare all of the documents with as much care and detail as you would for a traditional loan. But the list of required or recommended items is far shorter for hard money requests. It is not uncommon for a lender to request W-2s, paystubs or bank statements to verify income or employment but they are not going to require years’ worth of documentation. Documents about the property will be more critical.
Demonstrate Your Preparation
Obviously, you will be supplying photos and a financial evaluation of the collateral property, but there is more that you will need to show the lender. Prepare a detailed outline of the project which will include the renovations and repairs that you plan to make, the cost of these upgrades and the timeline for completion. It can also be beneficial to include a list of the contractors that you will be working with and list their experience level. Include some documentation for comps in the area that will support your expected upgraded value of the property as well. This can justify the sale price that you are expecting and demonstrates your plan for repaying the loan.
Sell Yourself
The success or failure of Arizona Hard Money Loans often lies within the experience level of the borrower. Demonstrating your past experience managing real estate investment properties, renovations or fix and flip projects will provide the lender with a higher comfort level in the potential success of the project. If you are light on experience, be sure to include a very detailed contingency plan in the event that the renovation uncovers additional issues or that the property does not sell as quickly as expected. This can be a plan to rent the property as well as documenting savings or other funds that will be used to carry the loan payments during the extended ownership of the property. Using these tips to prepare a hard money loan request will greatly increase the number of opportunities that you will have to choose from when seeking a loan.
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 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.
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