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Sunday, October 14, 2018

The Guide to Arizona Investment Property Loans

Many real estate entrepreneurs turn to Arizona Hard Money Lenders for Arizona investment property loans. There are several options available when looking to obtain a loan for your investment.
All of a sudden, the market takes a 20 percent corrective move. One of the hedges is the real estate market. Afterall, owning an investment property offers a number of perks. Becoming a landlord is a very good way to realize a passive income stream. Keep in mind that there are a number of lenders they will require that you have skin in the game or cash to invest. Taking a loan out when you do not have a positive cash flow is one way to close the deal.
Arizona investment property loans can take several forms, including the criteria that the borrower needs to meet. If you do not do your research and choose the wrong type of loan, it can impact your ROI or Return on Investment. You will need to do your research on the various types of lenders in your market.
You’ve probably all heard or worked with conventional bankers. Expect to put close to thirty percent down of the purchase price when your loan is on an investment property. Lenders will look at debt-to-income calculations. Keep in mind that future rental income is not figured into this calculation. Be prepared to have six months of cash set-aside to meet the mortgage obligation as this may be a lender requirement.
One popular investment these days is the fix-and-flip model. Flipping a property is most attractive because it allows the investor to receive their profit in a lump sum after the sale of the investment property as opposed to waiting for a rent check each month.
Fix-and-flip loans are short term loans which allow the investor/landlord to make the needed renovations. Once the renovations have been completed, the investment property is put back on the market as soon as possible. Fix and flip Arizona investment property loans are secured by the property. You may want to also look at a real estate crowdfunding site as an option.
The advantage of using a hard money lender as opposed to a conventional lender is that it is easier to qualify. The hard money lender looks at the after-repair value (ARV) as to if you are able to repay the loan. The advantage of a hard money lender versus a conventional lender is the speed of getting the loan, days as opposed to weeks or months as is customary with a conventional lender.
Interest Rates
Expect to pay higher interest rates when compared to conventional lenders. You will also need to pay points of the Arizona investment property loan amount upfront to close the loan. Some lenders allow you to take the cost of the points out of the proceeds of the loans.
More home owners are looking to Arizona Hard Money Lenders for home equity loans.

If you are a home owner and have equity, then you can access the equity through various loan programs. There are some loan programs that access the equity like a credit card and allow interest-only payments. A cash-out refinance is another option and a long-term loan is the final option. Both rental properties and fix-and-flip ventures are risky. The opportunity for big returns, however, is attractive. If the obstacle you face is funding the necessary money, consider a hard money lender for your next investment property.

Happy senior business man making his notes at work 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.

The Definitive Guide to Fund your Investment Property with Arizona Hard Money Loans

Why are more and more investors obtaining Arizona hard money loans? There are certain investment strategies that make this type of loan appealing and lucrative.
This is a type of loan that is not obtained from a conventional financial institution. The expense, almost always, is slightly higher than a conventional loan. The points involved can be about 2% to 6% and are the initial compensation to the broker. The interest rates can be between 8% to 12% or more. There are a number of factors affecting the points and interest rates, such as loan duration, borrower credit, real estate type and the market fluctuations.
In the aftermath of the housing crisis in 2007-08, conventional loans came under stricter regulations. If you have good credit, proof of income, and are seeking a 30-year fixed rate loan, a conventional loan may be your best option. These types of loans are, however, under tighter underwriting restrictions and, if the loan officer cannot check all the boxes when you are applying for the loan, you may just be out of luck.
Conventional loans can be denied if you have bad credit, no income, lots of assets, or numerous liabilities. Under various circumstances, you may benefit from Arizona hard money loan. These include:
Unimproved land purchase
Your purchasing an unusual property such as a church or marina
A quick closure is required. You can often close in as little as a week
Personal assets are limited
A hard money loan, in the instances above, may be your best bet. An Arizona hard money lender will step in when a conventional loan will not work. The ability to quickly purchase the property you have located can mean the difference between a successful investment and one that goes nowhere.
Arizona Hard Money Loans that are Flexible
Arizona hard money loans are often more flexible than conventional loans. And once you locate that unique property, timing is of the essence. Typical Arizona Hard Money Lenders close within a week. At Level 4 Funding, we present you with an approval in as little as 24 hours, and with funding in as little as two days. This gives you the flexibility to go after those properties that traditional banks may view as too risky. You may see a higher rate of return with a hard money lender. The hard money lender values the properties themselves and may be willing to loan at a higher loan-to-value ratio as long as you can demonstrate the potential for repair value improvements. When you get into a competitive bidding situation, the hard money lender can offer repair funding which may lead to acceptance of your offer.
Many contractors, real estate brokers, investors and developers have experienced financial distress such as bankruptcy, asset for foreclosures, and delinquent accounts.
Because of the failure to meet the credit score requirement with conventional loans, Arizona Hard Money Lenders are there to fill the gap. To repair your credit rating and convert your hard money loan to a conventional loan, utilizing a hard money lender will assist you to archiving this with positive performance. With few employees and licensed as a real estate broker, a Hard Money Lender is an advantage since you are dealing with the decision maker directly.
Call Level 4 Funding and talk to us directly. We are happy to answer any questions you may have about your potential investment.

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

What you Need to Know About Arizona Hard Money Lenders

There are several reasons that investors turn to Arizona Hard Money Lenders. Learn when a hard money loan is a borrower’s best bet.
Asset-based loans and Arizona Hard Money Lenders are one and the same. An Arizona hard money lender looks at the collateral as opposed to the borrower’s credit profile; this is opposite to what the conventional lender looks at. From the lenders prospective, these loans carry more risk than a conventional loan. Most Arizona hard money loans lend funds from private investors or companies. The private investors and companies will realize an above average rate of return. These types of lenders may charge additional points or an origination fee. This will vary by lender and is much higher than a conventional lender. You can expect 2% to 5% of the purchase price at closing. While the points are high, most Arizona Hard Money Lender offer terms that range from a few months to 15 months. This assures the lender that they achieve their ROI on the loan. Since the financial crisis of 2009, Arizona Hard Money Lenders have blossomed and grown.
If you are a real estate investor and are seeking a short-term loan to purchase property that is in need of repairs, otherwise known as the “Handy Man Special,” it may be difficult to qualify the property to be refinanced with a conventional lender. In today’s environment of tightening of credit, traditional lenders have pulled back and conventional financing has been harder to obtain.
There are several reasons that investors are turning to Arizona Hard Money Lenders for their financing needs:
They have poor credit
They cannot provide verification of their income
They have had a short sale or foreclosure
The property is a “handy man’s special”
They are in need of a short escrow period
Skin in the Game
Knowing the local market is a sign of a good hard money lender. The hard money lender also requires the borrower to have “skin in the game,” in other words, the borrower must have some of their own money in the transaction. When the borrower has skin in the game, it proves to the lender that they have a financial incentive to finish what they have started. The lender looks at the borrower‘s track record to see their experience in the type of project that they are seeking financing for. The borrower also needs to demonstrate to the lender that they have a viable exit strategy.
Each hard money lender will have their own lending criteria and borrower requirements. Each borrower’s project also has unique requirements.
Do your research, call several Arizona Hard Money Lenders, and ask questions about their loan programs. Talk with a lender and make sure that you are getting straightforward answers about fees, points, duration of the loan, and all the information you need to make an intelligent decision. Additionally, it helps if the lender is from the local market, or at least understands its intricacies. The lender can assist you in market direction, economic direction of the community, resale value of similar properties, and comps of properties that have sold. At Level 4 Funding, we are happy to ask any questions you may have and guide you in the direction of your dreams. Call for a no-obligation quote.

How Lines of Credit Work with Arizona Commercial Loans

Commercial lines of credit are very popular with the small business financing of today—and are the most misunderstood. Here, then, are some of the basic facts that can help you decide if this type of Arizona Commercial Loan is right for your small business.
A line of credit allows a company to draw on a predetermined amount of money. To access the funds, the company just needs to draw on the line. Every time you draw on the line, you are reducing the amount of funds you can draw from. The inverse is that you can pay down the line of credit at any time, thus increasing the available funds to draw from. A conventional credit card works much like a revolving line of credit.
When getting the Arizona line of credit, the bank restricts the use of the funds. Since it is a Arizona commercial loan, the funds can only be used for business purposes. Your company can use these funds to cover short term needs such as paying suppliers, covering payroll, and other corporate expenses.
Just like all types of lines of credit, there is an associated cost. The costs vary depending on the size and risk of the line, and the fees are based on the outstanding balance. There are additional fees such as availability and maintenance fees. These fees vary by bank. Most banks require that the full balance of the line of credit be paid down in full once a year.
Lines of Credit: Secured and Unsecured
Secured Lines
Both corporate and personal collateral can be used for this type of line of credit. These assets will be used to secure the repayment of the line of credit. If the business owner defaults, the bank will foreclose on the assets to pay off the loan. Various types of assets can be used such as account receivables, inventory, cash, machinery, securities, certificates of deposits and real estate. The pleaded assets will be secured by the bank filing a UCC.
Unsecured Lines
This type of line of credit does not required collateral such as outlined above. The unsecured line of credit will be personally guaranteed by the business and often includes a personal guarantee by the business owner. In the case of a default, the bank will sue the business owner personally as well as the company.
When applying for a Arizona commercial loan, the bank will examine the company’s income statement (P & L and Balance Sheets). These reports will help the bank determine if you can repay the loan.
Most banks will want to review two years of financial reports. The bank wants to see two years of operating profits. The bank also wants to see assets on the balance sheet such as accounts receivable, machinery, inventory and real estate. This requirement varies by bank. The line of credit based on these assets runs around 50% of the net value of the asset such as the machinery after depreciation.

Owner Occupied Hard Money Lenders

You may be surprised to find out that owner-occupied hard money lenders offer loans for primary residences. Find out the specific situations where you can benefit from these types of loans.
Are you in a circumstance where you are being denied a residential mortgage? There are many circumstances when a borrower is denied this type of mortgage from both credit unions and banks. When the person seeking a loan has little or no alternatives, they will often turn to a residential hard money lender to obtain a mortgage on the borrower’s primary residence. Some of the reasons a borrower may turn to this type of lender are:
The borrower has bad or poor credit
If the borrower has had a recent loan modification, foreclosure, short sale or bankruptcy
If the borrower has two years or less of current employment
If the borrower is self-employed
A bridge loan is needed by the borrower for a primary residence
In some instances, a borrower goes through the approval process with a conventional residential mortgage lender, and the lender is not able to perform while in escrow. The borrower then searches for a private owner-occupied hard money lender to secure financing through. The lender is able to provide fast approval and funding which will help prevent the borrower from losing the property they have a contract on. Once the escrow closes, the property is secured, and the borrower can refinance with a conventional mortgage company.
Why Arizona Owner-Occupied Hard Money Lenders are Few and Far Between
Most owner-occupied hard money lenders will not consider lending for your primary residences because:
Additional documentation is required
The lender is required to obtain additional licensing
Regulators will exert firmer regulations
The time to fund the loan increases since there are mandatory recession periods
Investment loans have far greater lender risks than owner occupied mortgages
Arizona Owner-occupied hard money lenders are subject to Federal regulations. Some of these regulations consider Dodd-Frank. The Dodd-Frank act requires the lender to verify the borrower’s income and expenses. Paystubs, tax returns and W2’s are ways the borrower can verify their income. Debt to income (DTI) must be kept under certain levels by the borrowers. Car payments, other mortgages, credit card payments and other debts will be considered. Also included in this ratio will be the new mortgage obligations, (taxes, mortgage payment and insurance).
The owner-occupied Arizona hard money loans are intended for short term use, generally three to five years. Most lenders will require the borrower to have a plan in place to obtain long term financing.
A hard money loan can offer borrowers with credit issues time to repair their credit report—and not lose their chosen property. Others may be postponing obtaining a conventional loan until the mandatory waiting period for negative credit events has passed. These events may include short sale, bankruptcy, loan modification or foreclosure. If the borrower’s property has enough equity and there currently is a first (1st) mortgage and the borrower does not qualify for a conventional second (2nd) mortgage, then the borrower can consider a hard money lender. This may be a prudent decision if the proceeds of the second mortgage is used to pay off high interest rate credit cards or pay down other high interest debt.

Saturday, October 13, 2018

A Borrower’s Guide to Arizona Business Loans

There are several different types of loans suitable for businesses. Make sure you know the difference between each one before choosing your next Arizona business loans.
If you are running a business, you may find yourself in need of working capital, new equipment, or additional inventory. A business loan specifically for one of these needs may be your best bet when it comes to continued success or hanging in there during the slow season. There are an assortment of Arizona business loans to choose from including bank loans, mezzanine financing, asset-based financing, invoice financing, microloans, business cash advances and cash flow loans.
Bank loan: Just as the name indicates, the originator of this type of loan is a bank. The loan may or may not be a secured loan. A secured loan requires approved collateral. If payments are not made, then the collateral will be kept and usually sold. An unsecured loan is, just as the name states, one in which there is no requirement to pledge collateral to obtain the loan. Before making an unsecured loan, a bank may want to see the borrower’s business accounts, balance sheet and business plan, the principal’s background, and credit histories.
SBA Loans: The Small Business Administration is a government agency that offers guaranteed backed loans through your local bank. The SBA (a) includes both a standard and express loan approval process.
Mezzanine finance: Mezzanine financing effectively secures a company’s debt on its equity, allowing the lender to claim part-ownership if the loan is not paid back in full and on time. The loan is made with collateral. Dilution of the debtor’s equity occurs in a default situation.
Asset-Based Finance: If you are lacking the credit rating or track record to qualify, this type of financing has become a very popular choice. The lender focuses on the borrower’s assets instead of their credit rating. Various assets are considered including the premises, plant, stock, or receivables.
Invoice Finance (factoring): An alternative to conventional financing, this type of lending requires the borrowing at a discounted amount of the invoices. Once established, you will be able to obtain funds as soon as a new invoice is created. This may not be the best option for your business. There may be a negative view by customers, and the lender will take ownership over the businesses’ invoices until the loan is paid.
Microloans: These Arizona business loans are for amounts of $100,000 or less. Alternative lenders are more likely to make these types of loans than traditional banks. If the traditional bank makes this type of loan, it is made based on the individual personal credit score than the business credit score.
Checking out Online Lenders
A number of online lenders have begun popping up on the World-Wide-Web. Since 2014, $12 billion dollars have been made. Since 2000, non-bank online lenders have doubled their outstanding portfolio balance each year. Another option is crowdfunding—an option that allows businesses to raise capital from a wide variety of sources.
Personal guarantees are usually required if you own a certain percentage of the business.

If you are an owner of 20% or more of a business, most lenders will require a personal guarantee. This allows the lender to collect on a Arizona business loan in the event of a default. In most cases, as a personal guarantor, you will need a strong personal credit score.

Beretta Only

Sunday, October 14, 2018

The Guide to Arizona Investment Property Loans

Many real estate entrepreneurs turn to Arizona Hard Money Lenders for Arizona investment property loans. There are several options available when looking to obtain a loan for your investment.

More home owners are looking to Arizona Hard Money Lenders for home equity loans.

The Definitive Guide to Fund your Investment Property with Arizona Hard Money Loans

Why are more and more investors obtaining Arizona hard money loans? There are certain investment strategies that make this type of loan appealing and lucrative.

Arizona Hard Money Loans that are Flexible

What you Need to Know About Arizona Hard Money Lenders

There are several reasons that investors turn to Arizona Hard Money Lenders. Learn when a hard money loan is a borrower’s best bet.

Skin in the Game

How Lines of Credit Work with Arizona Commercial Loans

Commercial lines of credit are very popular with the small business financing of today—and are the most misunderstood. Here, then, are some of the basic facts that can help you decide if this type of Arizona Commercial Loan is right for your small business.

Lines of Credit: Secured and Unsecured

Owner Occupied Hard Money Lenders

You may be surprised to find out that owner-occupied hard money lenders offer loans for primary residences. Find out the specific situations where you can benefit from these types of loans.

Why Arizona Owner-Occupied Hard Money Lenders are Few and Far Between

Saturday, October 13, 2018

A Borrower’s Guide to Arizona Business Loans

There are several different types of loans suitable for businesses. Make sure you know the difference between each one before choosing your next Arizona business loans.

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