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Saturday, January 26, 2019

The Differences Between Arizona Rental Property Loans and Home Loans

There are several differences between a loan for a home you plan to live in and a loan you plan to use as a rental property. Let's take a look at them and see what they mean for you as a real estate investor.

Looking to make your first rental property purchase? It can be daunting, even if you've bought a home in the past. After all, this is a business venture, not a home purchase. So, you'll need to know the basics of getting financing before you take your first steps. Let's look at some of the main differences between the two:

● You'll have to put more money down for a rental property. Because traditional lenders consider Arizona Rental Property Loans a bigger risk than a conventional mortgage, they'll ask you to put more money down. We're talking about a minimum of 20 percent, but it could be as much as 40 percent depending on a range of factors.

● You won't need mortgage insurance. With a typical home purchase, you must buy insurance on the mortgage. With a Arizona Rental Property Loans, there's no need to do that.

● Interest rates are higher for rental property purchases. While many traditional lenders will claim that their loans on investment properties are just 0.25 percent to 0.5 percent more than their mortgages. Not in the real world. In the real world, you'll end up one to three percentage points higher.

● You'll need a minimum of three months payments in your account to apply for an investment property loan.

Alternatives to Arizona Rental Property Loans from the Bank

One alternative to a conventional bank loan is a hard money Arizona Rental Property Loans. With a Hard Money Loan in Arizona, the risk is tied to the collateral, so approval is based less on credit scores, incomes, and past history, and more on the property's value or potential value. These types of loans can work as bridge loans to get you started on the purchase and repairs of the property until you secure longer term financing.

Hard Money Arizona Rental Property Loans in Arizona

If you're looking to invest in a rental property in Arizona and you're considering a hard money Arizona Rental Property Loan, Level4Funding may be able to help. We offer a lightning-fast approval process (24 hours), loan-to-value (LTV) of up to 90 percent, no prepayment penalties, and rates starting at only 7.99 percent. Call us today to talk about partnering.

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.

Why Arizona Private Money Lenders Can Be a Better Option Than the Bank

Many real estate investors go directly to the bank to get their financing because that's the accepted route. But in some cases, a loan from a Arizona Private Money Lenders may be a better option.

How do you know when you should go to the bank and when you should look for private investors? To determine this, let's look at some of the ins and outs of both loans:

● A bank loan will require an in-depth rummaging through your financial history, a bright, shiny credit score, and a pretty sizable down payment. You'll probably be rejected if you've had a previous blemish on your financial track record, a credit score below 700, and an income that doesn't match their threshold.

● A private money loan is secured using collateral, so your history, income, and credit score play a much smaller role. If the collateral property — whether it's a currently owned property or one you're purchasing — passes the sniff test, you can get approved.

● Bank loans can take up to a couple months to go through the approval and granting process.

● Private loans can be in your account in a matter of weeks. The approval process is quick and the funds don't have to go through all sorts of red tape.

● Bank loans come from giant conglomerates that may or may not have a vested interest in your success.

● Private money loans use funds from individuals who hitch their wagon to your plans. Your success is their success.

Is a Arizona Private Money Lender the Right Option for You?

Now that you know some of the differences between Arizona Private Money Lenders and the bank, you'll have a better idea if it's the right move for you. If you've got amazing credit, a spotless history, and plenty of dough to plunk down on a property, the banks may be your best option. Conversely, if you need to move quickly on your investment opportunity or you've been turned down by the big financial institutions, going the private route may be the better option.

Finding an Arizona Private Money Lender in Arizona

Hard Money Loans in Arizona do come with much shorter terms and higher interest rates and that can feel scary at first blush. However, for the right situation, this arrangement can be a win-win for both the real estate dreamer and the Arizona Private Money Lenders.

Owner-Occupied Hard Money Loans in Arizona

If any of those reasons resonate with you (or you've got your own reasons), you're probably wondering about the specifics. These types of loans are incredibly quick. The application takes minutes and the funds can be in your account much faster than a bank loan. Interest rates vary, but they are typically in the six to 12 percent range. To qualify, you'll simply need a tax return or 3 months of bank statements.

Level4Funding and Owner-Occupied Hard Money Loans in Arizona

Our owner-occupied Hard Money Loans in Arizona have no pre-payment penalty, they don't cost anything to apply for, and we guarantee the lowest rates in the business. Speak with one of our representatives or fill out one of our quick loan applications today!

How to Apply for a Residential Hard Money Loan in Arizona

Thinking about finding a Arizona Residential Hard Money Lender in Arizona to get financing for a single family home? Delving into the world of residential loans can be daunting, so let's demystify it by taking a look at the first step in the process — applying.

Hard Money Loans in Arizona use funds from private investors and individuals and are secured by collateral. As such, the application process is different than a typical bank or credit union loan. A big bank might ask for a pile of documents to verify every dime of income, show every asset, and prove that your credit score is up to snuff. With hard money, here are some of the common steps you'll go through:

Find a reputable lender. An upstanding lender will have a professional website, an easy way to contact them, and, most importantly, a proven history of funding successful residential projects.
Do your research. If you're making an investment in residential real estate, you'll want to know every detail about it — what's its growth potential? What is the market's history in the area? What will your after-repair-value (ARV) be?
Show the value of your collateral. Since collateral is the lynchpin of a Hard Money Loan in Arizona, that's where lenders will focus. You'll provide documentation that shows the value of your collateral property. This can include things like architectural plans, contractor bid sheets, detailed budgets, and plans for renovations.
Prepare other documents. In most situations, the above documentation will be all you need. In some cases, though, Hard Money Lenders in Arizona might ask for a few other documents, including paystubs, W-2s, credit history, or bank statements.

Moving Quickly on Your Residential Investment

Here's the best part about opting for a Arizona Residential Hard Money Lenders over a common bank loan — the process is really fast. Without complicated underwriting processes and all sorts of verifications, Hard Money Loans in Arizona can be approved in a matter of days and you can have the money in your account in a matter of weeks. That speed means you can move quickly on an investment opportunity. After all, the faster you can get started, the faster you can make a profit.

Apply for a Residential Hard Money Loan in Arizona Today

The application process is easier than you might think. An Arizona Residential Hard Money Lender in Arizona, like Level4Funding, can sit down with you, walk you through the process step by step, and help you get the funding you need for your project.

Friday, January 25, 2019

6 Reasons to Consider an Owner-Occupied Hard Money Loan in Arizona

Despite what you may have heard, some lenders still do owner-occupied Hard Money Loans in Arizona. Here are a variety of reasons to consider one for your situation.

If you've done any looking around, you've probably found that not many Hard Money Lenders in Arizona are willing to do owner-occupied loans these days. Even the ones that are willing to do them will only go forward if the funds are intended for a business purpose. That's because the regulations surrounding them can be daunting and many lenders just don't want to deal with it.

However, there are still Hard Money Lenders in Arizona who will give primary residence loans. Here are some reasons to consider one an owner-occupied Hard Money Loan in Arizona:

You've got bad credit. The banks and credit unions have turned you down because your credit score didn't fit into their little box.
You've got income that's difficult to prove. If you're self-employed or your income isn't "normal," you've probably found that typical lenders don't want to deal with you. Unfortunately, not everyone has a 9-5 desk job with a regular paycheck.
Your property is "problematic." If your primary residence has major issues, the banks may not want to let you refinance.
You just don't qualify for traditional or FHA/VA financing. There are all sorts of reasons banks turn down borrowers and you've got one or two problem areas that made you too much of a risk.
You need to do repairs. Whether it was a catastrophe or just the ravages of age, your primary residence is long overdue for repairs and refurbishment and you need an influx of cash to get it all done.
You want to pay down debt. You've got debts outside of the mortgage that are critical, and you need to pay them off at a lower interest rate.

Can You Get an Airbnb Loan in Arizona with Rotten Credit?

Is it possible to get an Airbnb Loan in Arizona if your credit stinks? It might seem impossible, but there are ways to work around the system and start making your hosting dreams come true.

It's a catch-22. You've had financial problems in the past, so you're looking to bring in some extra income to help pay the bills. Airbnb is a great option because it's something you can do on the side. After all, the average host brings in an extra $924 every month. Unfortunately, the banks won't give you the financing you need to make it happen. Are you completely out of luck? Not necessarily.

If the banks and credit unions have given you a firm "no" because of a low credit score, a precarious financial situation, or a past transgression, don't worry. You still have options.

Using Hard Money to Finance an Airbnb Property

You've probably heard the term "hard money" before but you might not be completely clear on what it is. Put simply, Hard Money Loans in Arizona are loans that use funds from private investors. They offer a range of benefits that the banks can't:

● Since the money comes from private sources, they're not as heavily regulated and they don't require as much complicated underwriting. This makes the process incredibly fast. With a typical bank loan, you might wait weeks to get approved and up to a couple months to see any money in your account. Hard money Airbnb Loans in Arizona can be approved and financed in as little as two weeks.

● Hard Money Loans in Arizona are secured using collateral. This means that Hard Money Lenders in Arizona don't care as much about your credit score or any mistakes you've made in the past. If your investment is sound and your collateral is solid, you should be able to get approved.

● Hard Money Loans in Arizona come with higher rates and shorter terms — usually anywhere from six months to a year. The idea, then, is to use the proceeds from the Airbnb to pay the loan back quickly. Then you're free and clear and everything after that is profit.

Finance Your Airbnb Property Quickly

Opening an Airbnb property may be the perfect way to take advantage of the gig economy and bring in some extra money. If hosting has always appealed to you and the banks have turned down your dream, a hard money Airbnb Loan in Arizona might be the way to go. Call us, email us, or chat with us to find out how we can help fund your rental property goals.

Try These 4 Options for Arizona Fix and Flip Loans

Arizona Fix and Flip Loans are short-term loans that are used for purchasing and refurbishing a property before selling it for a profit. They come in a variety of forms and with a range of options; here are a few to get you started.

Cash out refinancing. A cash-out refinancing involves refinancing an existing property and using the cashed-out equity to pay for renovations. If there are any liens on the current property, they’ll need to be paid off before you can have access to the equity. Cash out refinancing loans are typically limited to 75 percent of the property’s LTV (loan to value ratio). This is a good option for people with a property that’s got a significant amount of equity.
Bridge loans. Bridge loans are exactly what they sound like — they're designed to get you from one real estate transaction to the next. Let's say you've got a property for sale and you plan to use the proceeds to buy your next flip. If an amazing deal comes along and you don't have the cash flow, you might miss out on the opportunity. Instead, you could use a bridge loan to purchase the property, then pay it off once you've sold the first property.
Permanent bank loans. Most flippers wouldn't think of doing a permanent bank loan for a fix and flip because the terms are generally too long. However, buy and hold investors who plan to fix the property over five years or more may benefit from this type of financing.
Hard Money Loans in Arizona. Hard money loans come from private investors and individuals, so they boast lower approval qualifications than any of the above options. They are also lightning fast — you can get the money in around 15 days — and they have much shorter terms, making them perfect for rehabbers who plan to refurbish and sell within a year.

Is a Hard Money Loan in Arizona Right for Your Fix and Flip?

As we detailed above, Hard Money Loans in Arizona’s are a fantastic option as Arizona Fix and Flip Loans because they offer ultra-fast approval, short loan terms, and less rigorous requirements than the bank. They also come with higher interest rates. This makes them ideal for flippers with at least a few projects under their belts or novice flippers who are working with an experienced contractor.

Where to Get a Fix and Flip Loan

Whether you're ready to dive into your first flip or you're off on your next real estate investment adventure, we offer Arizona Fix and Flip Loans that will work for you. Give us a call today!