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Friday, March 22, 2019

Tip For Success When Using Texas Hard Money Loans for Real Estate Investments

(Texas Hard Money Loans are a great tool for real estate investors. But like any tool, they must be used properly to ensure that you have the greatest potential for success and profit.)

Investing in real estate is a great way to work for yourself and build your personal wealth. Many people will enter this career field because it represents an opportunity to control their own future, work the hours that they choose and to retire much earlier than they ever thought possible. But the key to being successful is knowing how and when to use tools such as Texas Hard Money Loans to their greatest advantage.

Understanding the benefits of Texas Hard Money Loans is a critical first step. These loans are short-term and should only be used for short projects or as a fast solution for funds before you refinance to a traditional mortgage. The rates for Texas Hard Money Loans are often much higher than a traditional loan, but the benefits of the fast and simple application process make them very attractive. But never try to force a hard money loan into a long term loan, as the cost will quickly eat up any chance for a profit.

Finding a great lender is also very important to your current deal and all of your real estate investment purchases to come. Look at your hard money lender as a service provider. This person is offering you a service just as your appraiser or insurance agent does. Work with several lenders early on in your career, but select one or two that you focus on to build long term relationships with. Not only will this help to relieve some of the stress each time you need a loan but it will also provide you with a good working knowledge of the loan process for each deal.

Compare and Contrast

In the early stages of your real estate investing career, be sure to have a complete list of all of the charges, fees, and interest that you will be paying for each loan that you are requesting. Asking for this final tally in writing from each potential lender is a good way to learn to compare and contract all of your loan options. Sometimes the cheapest loan does not offer the terms that best meet your needs. Balancing cost and function will be very important to the overall success of each project.

Planning Is Key

As a new investor, it is very important that you have a detailed plan for each project as well as a contingency plan to cover events such as unexpected repairs or time delays. Having this documented will help to eliminate stress and will demonstrate to potential lenders that you are well prepared and educated about the realities of real estate investing. The more projects you successfully complete, the easier it will become to create this document but it will always be an important piece in the success of each investment project that you undertake.

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.

5 Tips For Success With Texas Hard Money Loans

(It is important to use every tool correctly and Texas Hard Money Loans are no different. These five tips will help to ensure your success using hard money.)

It is important for new borrowers to understand that Texas Hard Money Loans are provided by private lenders and are not required to follow the same regulations as a traditional bank or mortgage company. This means that borrowers should complete a great deal of research and compare several Texas Hard Money Lenders before selecting a lender to work with. During that selection process, the following five tips can be very helpful in your information gathering process.

The first thing to look for is a broker who is leading you to believe that he or she is a lender. This should be a part of the information that he or she discloses to you. The second tip is along the same lines and is to look for full disclosure from the lender or broker that you are speaking to. It is also important to remember that as you get further into the lending process, it is equally important for you to be completely honest with your lender.

Another red flag to be aware of is a lender who is requiring a lot of upfront fees be paid before a loan is approved. This is often a sign of a less than honest lender. Texas Hard Money Loans can require a few upfront payments for things like an appraisal but not huge fees for other documentation or processing. Ask each lender to provide you with a written copy of all fees and charges for the loan you are requesting so that you can compare the total cost of the loan from each lender.

Bait And Switch

Another issue to be concerned with is a lender who offers and price quotes on loan product but then begins to explain other options or actually starts to process a different type of loan for you. These ait and switch type moves are often to get more money from borrowers without disclosing the changes in the loan.

Know The Terms

As you speak to more lenders, you will begin to learn the common terms and conditions for Texas Hard Money Loans. The details will explain the fees and interest as well as the repayment schedule and penalties that you could be charged during the life of the loan. All lenders have the ability to create their own loan terms but beware of any very unusual terms or terms that appear to be very confusing. This can be a sign that you are dealing with a less than honest lender or even a complete scam artist. As a new borrower, it is always a good idea to request a complete copy of the loan documents to have reviewed by an attorney. If a lender is not willing to provide that copy of the documents, then it is a good indicator that he or she has something to hide and that you should find a new lender immediately.

Thursday, March 21, 2019

Questions For Hard Money Lenders

(When you are comparing hard money lenders, you will want to ask all of the following important questions. This will help you to make the best selection to meet your needs.)

Hard money is a loan that is provided by a private lender which means that there are no real standards or rates that the lender needs to follow. That is not to say that Texas Hard Money Lenders are not regulated or forced to follow some guidelines, but most do not pertain to the rates and fee structures that they use. So all borrowers should have a list of questions for each potential hard money lender that they speak to. And the list should include all of the following questions.

The cost of the loan is a very big concern as that will have a hand in determining your profit, or loss, at the end of the project. Be certain to as what the interest rate and point for the loan will be. The rates can vary from 10 to 15% for interest and up to about 4% to cover points. Also, ask about any upfront fees to know the total cost of the loan. And the final fee that you should not is the early payment penalty that you would incur if you pay the loan off early.

The next major concern is about the other term of the loan. This can include things like the payment schedule, and the length of the loan itself. You should also ask if you have the option to extend the term of the loan or refinance it if you have not completed your project when the loan comes due.

Down Payments

The next question can vary a great deal because you are working with a private lender and each one has his or her own preference. But you need to know how large a down payment the lender requires. This is a way for the lender to add to his or her security because you have some of your own money tied up in the deal. The more risky the deal looks on paper, the higher the down payment is likely to be. Texas Hard Money Lenders like to know that the borrower has some skin in the game to remain focused and motivated to complete the project and repay the loan.

The Details

Your last questions for Texas Hard Money Lenders will revolve around the final details of the deal. You will want to know how long it would take each lender to be ready to close the deal and also how long until you will have the funding for the loan. In some cases, it is worth paying a little bit more in fees and interest to work with a lender who can close more quickly and have the money in your hands faster. The purpose of asking all of the same questions of all lenders is to have a fair way to compare each offer and to be able to determine which lender will best meet your needs on loan terms as well as the total cost of the loan.

Eight Options for Arizona fix and flip loans

(The fix and flip market has become very popular with novice real estate investors as well as seasoned professionals. But the big question for everyone is where to look for Arizona fix and flip loans.)

As new real estate investors are searching for ways to turn a profit and grow their business, the fix and flip segment of the industry has become a favored investment option. But these new investors are often faced with many challenges as they look for Arizona fix and flip loans. Knowing the best resources for Arizona fix and flip loans can be a huge help in launching your successful career in real estate investing.

Working within your close circle of family and friends is often a great way to secure funding for your first flip purchase. These loans are normally less challenging and stressful but should still be taken very seriously as a debt that must be repaid in a timely fashion. A finance partner is also a good choice. This is much like a silent partner, who will provide the money while you invest the knowledge and labor on the job. Or if you own your home or have substantial equity in your home, a home equity line of credit is a great way to put your equity to work for you in your new business venture. But be aware that you are putting your own home at risk if the project fails.

Another resource that you could have from a previous job is your 401k retirement savings plan. Many of these plans are designed to allow you to loan yourself money for certain investments or expenses. Check with your plan administrator if you are not sure how your plan is structured. The biggest benefit here is that you will be paying the interest on the loan to your own retirement plan.

More Traditional Arizona fix and flip loans

A personal loan is another option if you have good credit and enough income to justify the added payment. The interest rate could be higher than some other types of loans but higher interest is better than no loan. In some cases, you might also get very fortunate and find a seller who is willing to offer you seller financing. This is a great option for both of you as you are likely to be able to pay the loan off in less than a year when the flip is completed and sold.

A Hard Money Option

Texas Hard Money Loans are also known as asset-based loans because they are secured by the property that you are purchasing. You make a large down payment of up to 30%, and then the property is used as the collateral for your loan. If you default on the loan, then the hard money lender takes possession of the property as payment for the loan. These loans are normally short-term which works perfectly for a fix and flip project and allows new investors to have a great resource for loans as they begin their new career.

The Best Options for Fix and Flip Loans

(Home flips are a very popular way to get into the real estate investment business. But the first challenge for most flippers is learning about Arizona fix and flip loans.)

There are a multitude of television shows that depict fix and flip projects as fun and simple. But the truth is that it is a very serious business that requires a good knowledge base of finance to be sure to get the best loan to meet your needs. Understanding your options for the best Arizona fix and flip loans is the first step in a successful flip.

Hard money Arizona fix and flip loans are a great option because they are a short term loan that is secured y the value of the property that you are buying. Real estate investors normally purchase a property, renovate and resell within the term of a hard money loan which is around a year at the most. But if you are only doing minor repairs, you can request that the loan term be even shorter if that is what works out best for you. The private lenders are much easier to work with and can even create a custom payment schedule in some cases.

Cash out Arizona fix and flip loans require you to own another property. In this case, you are refinancing or taking out a loan on a property that you own outright to use that equity to invest in a property to flip. This could be refinancing your current home to use that equity or you could refinance another investment property that you have to make the purchase. But the concern is that you need to complete your flip to at least break even and not risk losing both properties.

HELOC Loans

Home equity line of credit loans also require that you own a property or have a great deal of equity in a property. For this loan, you secure a line of credit against the equity in your home or another property that you own. Again, you are risking that property if you fail to sell the flip and cannot pay the HELOC payment. But with a line of credit, the line of credit is somewhat revolving. So each payment that you make provides you with more options for reusing the line of credit to make purchases for materials for the renovations or other projects.

Know Your Options

There are many options for funding a fix and flip. But only after you have researched all of your options can you determine which loan will best meet your current needs. Some short term loans will require a large balloon payment at the end of the term while others can be refinanced to extend the term if you are unable to repay the full loan amount. It is also important that borrowers understand that using the equity in one property to purchase another property represents a far greater risk than using the property being purchased as the collateral for a hard money loan. Making a solid choice for your fix and flip loan will get you off to a great start on your real estate investment project.

Wednesday, March 20, 2019

Qualifications for Arizona Hard Money Loans

(If you have never used a hard money lender, then you will not understand the qualifications that are required. But following these tips can help you to secure Arizona Hard Money Loans.)

As compares to traditional loans, Arizona Hard Money Loans are very easy to qualify for. But there are certain things that a lender will look for when deciding if he or she will fund a loan and also the interest rate that will be charged for the loan. The primary concern is the value of the collateral property, but there is also some concern with regards to the experience of the borrower and knowledge of the real estate industry.

It might seem odd, but money is a major concern even when you are asking to borrow money. The lender will need to be sure that the borrower has the money to make the down payment which could be as much as 25% to 35% of the cost of the property. In the case of a commercial property purchase, the down payment could even be 40% of the cost of the property. In addition, the lender will want to know that the borrower has a cash reserve to fall back on in the event of an unforeseen issue.

Submitting the borrower's track record of successful projects is a great way to offer the lender some security in the borrower's experience and knowledge. It is important that past deals have been completed on time and on budget. This will help to keep the interest rates down as there is less possibility of a default on the loan. Being new to real estate investing will not preclude a borrower from securing a loan, but it should be expected that the lender will charge a higher interest rate and could require more documentation to demonstrate a well-conceived plan for the project.

Exit Strategy

Finally, the lender will want to see an exit strategy for the project. This is a detailed plan showing the borrowers plan for repaying the hard money loan. The short term of Arizona Hard Money Loans can make it very challenging to repay them on time. Borrowers need to have a solid plan to finish the project to make the final payment, or balloon payment, that is normally the close of a hard money loan. The exit strategy will also include contingency plans in the event of time overrun or budget overrun. Normally, it is the borrower’s cash reserve that is tapped to correct these issues.

Final Approval

Hard money loans are not as complex as they might initially appear. The lender simply wants to access the risk involved in the loan and to know that the property will have enough value to cover any outstanding balance on the loan should the borrower default. The information about work experience and past project experience is used more for determining the interest rate for the loan and the fees that will be involved in writing the loan. It is also important to understand that after completing several loans with a lender, the process can become even more streamlined and fast as you have developed a strong working relationship with the lender.