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Friday, January 18, 2019

Drawbacks of Arizona Hard Money Loans

Nothing is ever perfect for every situation and Arizona Hard Money Loans are no exception to that rule. But understanding the drawbacks of these loans can help borrowers use the loans correctly and for the greatest benefit.

Most borrowers quickly discover that the cost of Arizona Hard Money Loans is often substantially more than the cost of a traditional loan. But there are reasons that the loan is more expensive, and for many of the borrowers, hard money is their only option. Having a loan that is not based on a credit score is all that gets many borrowers funded after a foreclosure or other financial issues. While other borrowers are unable to wait through the 60 to 90-day application and evaluation process that traditional lenders impose.

In particular, the interest rate charged by hard money lenders is double to triple the rate that a traditional lender will charge. But again, borrowers who have no other option are willing to pay the higher rate to get a loan. In some cases, the borrowers can agree to a shorter term loan which decreases the interest cost. Other times, the borrowers will carry Arizona Hard Money Loans long enough for their credit to improve, then refinance with a traditional lender.

Another cost drawback for Arizona Hard Money Loans is that the lenders are not required to follow the same rules as traditional lenders regarding fees. The lenders can charge just points to cover their administrative fees or they can itemize the fees. The lender is free to select any method that he or she likes to set up the fee structure for the loans.

Time Frame

The fact that hard money is a short-term loan can also be seen as a drawback for some borrowers. Paying back a substantial loan in just a few months or even a few years can mean that the payment schedule is very aggressive. These very large monthly payments can be difficult to continue to make. Some lenders will allow borrowers to pay the interest each month in addition to only a small amount of the principle, but that required a very large balloon payment at the end of the loan term which can also be hard for borrowers to make.

Make Smart Choices

Nothing is perfect, but there are usually ways to work around the downside or drawbacks of any situation if the reward is high enough. Securing hard money when you cannot qualify for a traditional loan is a big reward for some borrowers. And those borrowers are willing to pay a higher price for the loan. Other borrowers understand that they need the loan very quickly and that hard money is the only choice in the short term. They then work diligently to find a more traditional and low-cost way to refinance the loan. Understanding how hard money works and the costs involved will help you to evaluate the costs as well as any other options that you might have and make a well-informed decision about the money that you borrow.

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.

Creative Solutions For Rental Property Loans in Arizona

Securing a mortgage for your personal home is different than getting a loan for an investment property. You might need to think creatively to secure Arizona rental property loans.

There are many differences in the finance process when you are seeking investment loans including rental property loans. In most cases, you are already carrying a loan for your own home, so that makes getting a traditional loan even more challenging. And because mortgage insurance does not cover investment properties, you will also need to be able to invest at least 20% of the purchase in the down payment. But there are a few tips that can help you to secure Rental Property Loans in Arizona to begin your career in real estate investing.

As mentioned, the down payment for a loan to purchase a rental or any investment property will require a deposit of 20% or more. And it is important to remember that having instant equity in the property is always good for a borrower. If you can invest 25% or more in the down payment, that equity will help to get you a lower interest rate as well as increasing the potential for securing any loan that you are seeking. A high credit score is also important when seeking a very competitive interest rate and getting approval for a loan.

Securing Rental Property Loans in Arizona can require some flexibility from the lender, so you are more likely to get financed when using a smaller bank or mortgage lender. Larger traditional banks and mortgage lenders tend to be very strict when it comes to the loan terms and the qualifications required to secure a loan. But smaller lenders and private hard money lenders are known to be much more accommodating to their potential borrowers.

Owner Financing

As the bank's loan criteria have become more stringent, sellers have become more open to owner financing. There are simply not as many well-qualified buyers, and a motivated seller is often willing to extend owner financing to potential buyers. But it is critical that buyers have any owner financing documentation reviewed by a legal professional to be certain that the deal is acceptable to the buyer. Terms and clauses in an owner financing contract are legally binding once signed and should not be one-sided to favor only the owner.

Be Creative

There are many ways that a resourceful buyer can acquire the cash needed to purchase a rental property. In some cases, equity or a line of credit on a personal residence can be used for the down payment. Other buyers choose to cash advance credit cards or to secure a personal signature loan to make a down payment on an investment property. Others turn to friends and family for loans or even a peer-to-peer lending site. What is important is that you are realistic about the amount of money that you can repay and the number of loans that you can manage to pay off at one time. Overextending yourself to make a down payment on a rental property is taking a large risk and could end up costing you the property before you even pay off the down payment loans.

Avoiding Foreclosure with Hard Money Loans

If you have enough equity in your home, then Arizona Hard Money Loans could be a good short-term option to avoid foreclosure. But understanding these loans is critical to your success.

Arizona Hard Money Loans are short-term loans which are based on the value of the property being purchased rather than the borrower's credit score. These asset-based loans offer a solution for borrowers with a poor credit score as well as those with no credit history. But in some cases, these loans are a good short-term option for a homeowner who is experiencing financial issues and it trying to avoid a foreclosure.

Many things can happen that make it difficult for a homeowner to make mortgage payments. Sometimes there is the loss of a job or others it could be due to an illness or even the death of one of the owners. But until the homeowner is back on his or her feet, making a mortgage payment can be very difficult. And when this occurs suddenly, there might not be time to seek a home equity line of credit or a traditional second mortgage. Arizona Hard Money Loans can be a fast solution to allow the homeowner to make mortgage payments while sorting out the financial issues.

The key to making this method work is to work very diligently at securing other financing at a lower rate once you are no longer at risk of a foreclosure. The high-interest rate of Arizona Hard Money Loans can quickly drain any resources that the homeowner might have. Some of the alternative options include getting a home equity loan, a home equity line of credit, acquiring a second mortgage or refinancing the entire home to pay off the short-term loan and substantially lower the monthly payments.

Fees to Expect

When you are researching a short-term loan to avoid foreclosure, you can expect to pay an appraisal fee, points on the loan and an interest rate between 10% and 15% over the life of the loan. If your lender does not charge points, then you should ask for a complete list of fees that are associated with the loan. Obtaining this list in writing can help to avoid surprise fees during the loan closing or as you approach the signing. If you are comparing several lenders, this list will also allow you to compare the total loan cost from each lender to select the loan that offers the best overall rate.

Make a Smart Choice

If you have suffered a sudden financial issue and you have equity in your home, then a short term hard money loan could be a solution to avoid foreclosure. You will need to be very careful to be certain that you completely understand your responsibilities as a borrower and the total cost of each loan option. This is certainly not a long-term option, but it will help to bridge a short-term issue and can help to avoid the additional issues associated with a foreclosure on your home.

Thursday, January 17, 2019

You Can Build Equity and Financial Security with an Arizona Rental Property Loans

Rental property loans allow for individuals to enter into real estate investment and build a consistent form of income that will last for years to come. Equity, security, and growth are all within your grasp.

Rental properties are attractive for a number of reasons: they are a great way to establish equity, home ownership, long term cash flow, and even a retirement. Rental properties are secure in recessions when renting becomes more common. Furthermore, rental property loans Arizona to finance acquisition and renovation are not hard to come by and form a great starting point for new investors.

To invest in rental properties, buy distressed real estate to get into a property for a lower cost with room to even renovate afterwards. Buying distressed property is not always easy in a competitive market with a limited housing supply, but it is possible. Frequenting auctions of foreclosed or distressed homes may be a start. Getting to know individuals who will need to quickly move from an area or home and are looking to sell. Other options are finding individuals who have recently inherited property and are not up to keep up with the cost of property tax or estate maintenance. More options are on the table as well for those intent upon finding them.

Finding a distressed property in an area that will establish a favorable lease rate is paramount. Draw out the total foreseeable costs of the project. How much to acquire a distressed property, how much to renovation will be needed, how much rent can be charged, and how much will financing charges come out to be. Putting the numbers together and looking at properties that offer a great return potential.

Find a Hard Money Lender to Receive Arizona Rental Property Loans

After locating a property that is suitable to be refurbished and rented, find the lending you need. Since conventional lenders do not like to lend on distressed property, hard money rental property loans are your best bet to acquiring and renovating real estate. Hard money lending will allow you to close in quickly upon a suitable property and receive a loan within days to a week. Lightning fast, where conventional lending could take months to complete.

Talk to your hard money broker at Level 4 Funding to secure rental property loans. Further your real estate investments and establish a continuous form of income, possibly even a future retirement.

Talk to a hard money broker to find the rate, term, and loan-to-value needed for the rental investment. After acquiring the property and getting funding to renovate through Arizona rental property loans, find renters and establish a lease rate that allows for paying off the active hard money loan. After refurbishing and establishing a renting rate, bridging to a conventional lender is on the table to reduce the cost of interest required by hard money lenders.

World War Bnb: Things to Know Before Taking Out an Arizona Airbnb loan

Airbnb is an excellent platform offering excellent services to a devote user base. However, since becoming a contender on the world real estate board, it is now faced with legal battles in many cities and countries across the world. Before taking out Airbnb loans, it is important to look into the legal standing of an individual area and be prepared for potential changes.

The sun never sets upon Airbnb’s empire. Since its genesis in 2008, Airbnb has taken the world by storm and has reached a multibillion dollar net worth in the process. In 2018, Its vacation rental platform now offers homes, rooms, and apartments across the globe. As common of modern application-based businesses, Airbnb benefits both the host and the company. Airbnb offers a means for individuals to start a business, supplement income, or enjoy the company of new people from across the globe. By benefiting its hosts with income, its clients with an opulent experience, and itself by earning a great return, Airbnb has become a powerful business model and a real estate titan.

Sounds great, sounds like everyone is happy. Everyone except the hotel industries, some major cities, and rental competitors. A recent article from The Telegraph states that “the world is going to war with Airbnb.” The article indicates that many cities are unhappy with Airbnb for its interference with real estate prices and long-term loans. In an attempt to oppose Airbnb, many cities have started imposing regulations. Las Vegas, for example allows only so many Airbnb vacation rentals per given distance. New York City and Miami Beach, Florida have started policing Airbnb rentals that are not compliant with city regulations. Miami Beach, surprisingly, charges a first-time violation fee of $20,000 ranging to $100,000 dollars for the fifth. Other major cities fighting Airbnb include: Pairs, Amsterdam, Barcelona, Berlin, San Francisco, Santa Monica, and Sydney.

Know Your Regional Area Before Taking Out an Arizona Airbnb Loan

With Airbnb under attack across the world, it is important to research the regulations in a given area before investing in the short-term rental business and before acquiring an Airbnb Loan. Research your local area and see if there have been any recent changes in the laws. Keep up to date on recent talks on vacation rental homes and the possible returns that can be acquired through them.

Level 4 is here to help you find the Arizona Airbnb loan that is right for you. Talk to your broker today and find the term and rate that you are comfortable with.

Once you are comfortable with investing in Airbnb vacation rentals, talk to your hard money broker and get to find the Airbnb loan in Arizona that is right for you. Your broker will help you find a rate and a term that you are comfortable with given your qualifications. Plan well and enjoy the growing splendor of Airbnb through a hard money Arizona Airbnb loan.

Escape the Mandates of the Bank: Residential Hard Money Lenders in Arizona Are Here to Stay

Danger the banks may not approve everyone, and if they don’t approve you, what do you do in the aftermath? Residential hard money lenders are here to save the day by offering financing solutions that you may not have been aware of.

Sometimes, conventional residential lenders just won’t finance the needed amount or individuals just don’t meet their financing requirements. There are many reasons why people struggle obtaining loans. One of the first factors is creditworthiness. Conventional lenders are adamant upon looking at credit history, looking into credit delinquencies, crossing Ts and dotting Is, and making sure that potential borrowers can provide the documentation, paperwork, income, work history, etc. to qualify for the money. While many are able to qualify for these competitive rates and get some of the lowest interest in the country, others are not. Others find themselves in a sort of lending limbo:

First, those that have a hard time proving income: self-employment can be seen as a risk to banks who find traditional and predictable jobs to be a healthy indicator of loan repayment. Conventional lenders also need to see a satisfactory period of employment to even grant a loan. If a self-employed individual is unable to prove sufficient income, or duration of income through documentation, funding is often withheld.

Second case, those buying their first home. Individuals may possess a favorable credit score. However, the amount of credit history backing the score and the number and amount of debts previously paid factor greatly into the conventional lending equation. If the history is too short, then the possibility of obtaining conventional lending diminishes. Third, those looking to refinance an existing loan. Fourth, those in need of remodeling a personal home since sometimes it takes a little extra to set in motion a remodel of the interior or exterior of a home and a credit score can get in the way. And finally, those who need to consolidate debts

Dreams come True with Residential Hard Money Lenders in Arizona

For these cases, residential hard money lenders offer a fortunate alternative. Bad credit, foreign citizenship, bankruptcy, foreclosure, the works. These do not necessarily prevent an individual from receiving hard money loans form residential hard money lenders.

Get funded through Level 4 Funding, your hard money broker. Despite being rejected by the banks and credit unions, you can secure the financial backing you need by using residential hard money lenders.

In order to qualify, applicants must be able to put 20-30% cash down, or otherwise be able to leverage assets equating to a similar value. Verification of three months of income is a must, whether by bank statement or tax return. Loan-to-value rates can reach as high as 70-80% in certain cases, and interest rates can start as low as 9.5%. Talk to your hard money broker at Level 4 Funding today and find the Arizona residential hard money lenders that are right for you.