Beretta Only: phoenix fix and flip loans

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Monday, November 26, 2018

Fix and Flip Loans: Exit Strategies.

You are in the flipping game, and you're just brimming with hopeful expectations about your next project. The house is a diamond in the rough, and in your capable hands, you will polish it into a sparkling gem. You are ready to apply for a loan, but what if things don't quite go according to plan? With Arizona fix and flip loans its best to have an exit strategy in mind before you even apply.
Finding the right opportunity isn't everything the flipping game, in fact, it might be even more critical to plan ahead in case things go wrong. Don’t be overconfident going into your next deal. No matter how beautiful the renovations you intend to make or how splendid profit your projections look on paper, math and reality don't always line up. When it comes to flipping, there are two classes of exit strategy: preemptive and "well that sucks," strategies.
Preemptive Exit Strategies for Arizona Fix and Flip Loans
A preemptive exit strategy involves you getting out of a deal before you begin the project in earnest. When it comes to taking preemptive action there are two basic strategies:
Keep it Simple: in this case, you've lost confidence in the prospect of doing a full-blown renovation, but you still think there's some money to be made. So keep it simple, narrow the scope of work, replace the carpet or give the interior a fresh paint job. Then you sell the house for a little less money to a prospective buyer.
Wholesaling: Basically you leave the house untouched, you don't do any work, and you sell the house back to another real estate investor. Whatever preemptive strategy you choose you need to ensure the sale price can pay-off the remaining balance of your loan.
The worst-case scenario is that you've already gone full bore into a project, completed renovations and…
"Well, that sucks," exit strategies for Arizona Fix and Flip Loans
Your once shambolic home is now full of snappy furniture and shiny finishes, but no one is buying. The open door creaks in the wind and the cookie plates go unconsumed at every open house. All the while the home sits unsold and you are paying real estate commissions and the cost of carrying your loan. There are two basic things you can do in this case:
Rent it: You find someone who is willing to pay for the privilege of living in your home every month. Of course, if you go for this option, that high-interest short-term loan you took out the flip house in the first place might be too expensive. The rent you charge must at least equal your loan payments. If not you might need to refinance,
But if you can't refinance you might have to,
Eat it: You keep lowering the list price until someone takes the house off your hands. Hopefully, in the end, you'll breathe a sigh of relief, you might not have made a profit but at least the final sale price paid for the loan. But this won't always be the case, you might just have to eat the difference between the final sale price and the outstanding loan balance. But this better than going into default.
So how do you avoid eating it? Don't just waltz wistfully into every opportunity, hold off a bit. If you have some uncertainty, ponder if you'll be able to refinance if the property doesn't sell. But if you regularly flip houses, sometimes you will simply have to eat it.

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

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.

Thursday, November 8, 2018

THE DIFFERENCES IN ARIZONA FIX AND FLIP LOANS

An Arizona fix and flip loan is a loan that investors use to purchase and renovate a property. A fix and flip is a distressed house that needs to be “fixed” and then after is quickly “flipped” making the investor a profit. Usually, the loans used for these projects are of relatively short-duration.
There are numerous types of loans available for fix and flips. Finding the loan that will work best for you depends on your experience and financial situation. Arizona hard money loans are the most popular.
How to determine which Arizona fix and flip loan is best for you?
Arizona hard money loans are best for an investor who has been successful in fix and flips. Arizona hard money loans are also known as rehab loans— due to the rehabilitation of the distressed house. These loans have lower qualifications for approval. Loan terms are short— usually between 6 months to 2 years. Approval usually takes less than 2 days. A borrower will only have to wait 10-15 days for funding. However, interest rates will be higher— typically between 9%-15%. Although, a borrowers credit does not have to be impeccable they will still need at least a 550.
Another way to finance a fix and flip is through a Home Equity Line of Credit (HELOC). A HELOC works like a credit card versus a traditional loan. Investors are granted a line of credit, from their bank, based on the value of their current property. With a line of credit, interest rates are only charged on the amount borrowed. A HELOC term is typically 25-30 years and approval time can take upwards of a month and a half. Interest rates are lower than a hard money loan—around 5%.
A bridge loan is a loan that is used temporarily during the time between real estate transactions. It gives the investor funds to purchase a fix and flip without a contingency to sell their other property first. Investors use these types of loans to purchase property before flipping the property to pay the loan off. These loans are extremely short term — typically between 3 weeks and one year. Interest rates on bridge loans are usually between 6% and 9%. A lender will look more at financial ability than credit and financial history.
Which Arizona fix and flip loan is best?
There are many factors that must be addressed to determine which Arizona fix and flip loan is right for you.
Hard Money Loan: If you are a novice, but willing to work with a contractor or you are an experienced investor that has a good track record of flipping homes a hard money loan could work for you. You will be approved and receive funds quickly. There are high interest rates and shorter loan terms.
HELOC: A HELOC may be a good choice if you are an investor with an owner-occupied residence and a large amount in existing home equity. The repayment is only interest for the first 5-10 years; interest and principal for the remaining years.
Bridge Loan: This loan works if you know you will close quickly. You will need to be able to pay two mortgages simultaneously. The loan terms are a couple of weeks to a year.
Whichever loan you choose be sure to do your homework. Speak to a lender; they will gladly help you through the process.

Monday, October 29, 2018

Phoenix Fix and Flip Loans: How to use Crowdfunding to Invest and Make Money

You don't need to be an active house flipper to make money from flipping projects. You can avoid all the hassle of these projects and still earn a profit by financing fix and flip loans through online crowdfunding platforms. Learn some of the basics about what you should look for in these deals and some basic strategies to find the best way to invest in these types of loans.
Crowdfunding remains the most accessible way for individual investors to earn money from house flips without actually carrying out the renovations themselves. Crowdfunding usually takes place on an online platform and relies on you (the individual investor), to finance the loans listed on the site. These loans are then given out to active house flippers.
However, there some fundamental things you should look into before investing in these loans.
Expectations before investing in Arizona Fix-n-Flip Loans
Before investing in any loan, consider the platform, or the website on which you aim to make your investment. Be wary of crowdfunding sites that claim to charge absolutely no fees. In almost every case this is too good to be true. In general, these websites will charge you a percentage of the income you earn either on an annual or a regular basis. Obviously, you want to make your investment on the crowdfunding website that charges the lowest possible fees.
Consider the type of flip you are investing in, is the project a residential or commercial flip? Residential flips offer a smaller return over a shorter period, while commercial flips provide a potentially larger return over a longer period. So consider how quickly, and how much, of a return, you want from your investment.
Consider the borrowers details, ideally you want to someone with prior experience and a proven track record of successful projects. Also, do your best to understand the conditions of the surrounding market to get a sense of the project's potential. Developing an understanding of an individual borrower and their project might put your mind at ease.
Ideally, you also want to invest in loans in which the borrower has signed a personal guarantee, as this will indicate they have some personal stake in their project.
After you find the right loan, there are two ways to actually invest.
When it comes to investing in Arizona fix-n-flip loans, you risk less as a debt partner, but you can make more money by acting as an equity partner
When it comes to investing in these types of loans, you can choose to act as a "debt" or "equity" partner. Acting as a debt partner allows you get regular interest payments throughout the term of the loan. Most crowdfunded fix and flip loans, have terms of 36 months and charge interest rates of 8 to 14%. You earn these interest payments on a regular monthly basis, and once the term of the loan expires, you receive the remaining interest and principal.
Acting as an equity partner gives you a share of ownership in the property. In this case, once the flipped property is sold you earn a specific percentage of the profits earned by the borrower. The potential returns from an equity partnership can be far greater; however, there is more risk in this case. It's uncertain how much profit a flip will earn until the renovations are finished and the property is actually resold.
In short, crowdfunding presents the opportunity to earn money from house flipping without actually flipping homes yourself. Consider the platform, type of project and borrower you want to invest in and whether or not you want to act as a debt or equity partner.

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

Phoenix Fix and Flip Loans: How to Make Money in Apartments

When it comes to fix and flip loans and apartments you need to have a strategy to pay off the loan as soon as possible. The following article will tell you where to find the best deals, how to value apartments and how you can use simple income boosting strategies, to maximize the value of your apartment property, quickly earn a profit and pay off the balance of your loan.
Before you take out a loan to flip an apartment, you need to find the right property.
Finding apartment properties to flip is a bit tricky, as most apartment buildings are sold off-market. Landlords don't want to alert tenants to possible changes in ownership, and so they avoid listing their properties outright. So to find apartment properties with the most potential you need to get in touch with local real estate brokers, who can give you a sense of which properties are available.
After finding a potential property to flip, consider the following:
• Is the property is in an exceptionally dilapidated condition: Is there an immediate need for physical improvements, If you can, then make these improvements, and you can quickly boost the properties value and resell it at a profit.
• Consider outside factors that could increase the property's value in the near-term: Are new public amenities like hospitals and schools about to be constructed nearby? If the answer is yes, then you may not need to spend any money to see the properties value appreciate.
With Phoenix fix and flip loans and apartments evaluate each deal based on the income potential of the property
The main difference between flipping apartments versus single-family homes is a matter of valuation. Residential properties are valued based on comparable sales, which limits the potential returns from residential flips. With commercial properties, I.e., apartments, the income generated by the property determines its value. Therefore the potential returns from an apartment renovation can be enormous, depending on how much you can raise the amount of income generated by the property.
When it comes to valuing apartment buildings, the value is usually set based on the market cap rate (annual income/ fair market price) divided by the overall annual revenue generated by the property.
So if your apartment earns 120,000 dollars in income annually and the prevailing cap rate is 5 percent= 120,000/.05= 2.4 million dollars.
This nuances of this valuation process are beyond the scope of this article.
However before taking out any loan you need to have a strategy in place to pay it off quickly. You also want to earn a profit by causing the value of the property to appreciate as quickly as possible. So when it comes to apartments, what's the fastest way to raise a properties value? Raise rents.
With fix and flip loans and apartments your best bet is raising rents which present a low cost way to boost value and pay back your loan quickly.
With any flipping project, you need a short-term strategy to boost a properties value, to pay off your loan and earn a profit as quickly as possible. When it comes to apartment flips the best way to boost value is to raise rents.
Obviously can be amoral or unethical about this, the improvements you make should justify any rent increases. However, in some cases you can still raise rents without paying for any improvements at all. If a property is charging rents that are exceptionally low, you can raise rents to a reasonable standard and quickly earn a profit.
Even a small increase in rent can dramatically boost the value of an apartment building. Consider the first example where the property was valued at 2.4 million dollars
• 120,000 (annual income) /.05 (cap-rate)= 2.4 million dollars.
This property is a 20 unit building, and each unit brings in 500 dollars in rent per month. If you were to raise rents by 50 dollars the property will earn 1,000 dollars of additional income per month, or 12,000 in extra annual revenue.
While this might not seem like a lot, this small increase in rent, based on a 5 percent cap rate, equates to a new valuation of:
• 120+12=132,000 (annual income)/.05 (cap-rate)= 2.64 million dollars.
So in this case that extra 12,000 dollars in income resulted in a 240,000 dollar increase in the properties value. As you can see, the sky is the limit when it comes to apartment flips. But of course there is math and then there is reality. So things wont always work out according to plan.
Nevertheless, before taking out a loan on an apartment property, find a reputable real estate broker and look for properties with:
• Easy low cost fixes that could raise value,
• Properties where new public amenities are being constructed which will increase the value of the property without any cost to you, and above all,
• Look for properties that are charging below market rents.
Raising exceptionally low rents to a reasonable standard is the fastest, and cheapest way to quickly raise the value of an apartment, allowing you to pay back your loan and earn a profit in the shortest possible amount of time.

Beretta Only

Monday, November 26, 2018

Fix and Flip Loans: Exit Strategies.

Preemptive Exit Strategies for Arizona Fix and Flip Loans

"Well, that sucks," exit strategies for Arizona Fix and Flip Loans

Thursday, November 8, 2018

THE DIFFERENCES IN ARIZONA FIX AND FLIP LOANS

How to determine which Arizona fix and flip loan is best for you?

Which Arizona fix and flip loan is best?

Monday, October 29, 2018

Phoenix Fix and Flip Loans: How to use Crowdfunding to Invest and Make Money

Expectations before investing in Arizona Fix-n-Flip Loans

When it comes to investing in Arizona fix-n-flip loans, you risk less as a debt partner, but you can make more money by acting as an equity partner

Phoenix Fix and Flip Loans: How to Make Money in Apartments

With Phoenix fix and flip loans and apartments evaluate each deal based on the income potential of the property

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