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Wednesday, March 27, 2019

Owner Occupied Arizona Hard Money Loans: do the advantages overrule the requirements for a borrower?

(Thinking of financing your latest project by using your current home as the collateral? Do some research into the area of owner occupied Arizona Hard Money Loans and learn the pros and cons of this route to funding your venture.)

While you are wracking your brain in order to find collateral that will satisfy the bank or whatever conventional lender you may have chosen, you may not realize that that you are literally sitting on what might be the best thing for you.

An owner occupied Arizona Hard Money Loan could be exactly what you need, but these loans have strict specifications set up through the Truth in Lending Act –indeed a lot of people think they are illegal. This is not true, but they are in a class by themselves being stricter than other hard-money related loans.

What kind of requirements do these loans have?

In California, the majority of this type funding must be earmarked for a business investment ranging from increasing your business itself to setting up an office for you to work from in your house. They cannot be for household, personal or family usage. Laws, however, vary from state to state.

Another requirement is that the borrower’s income must be verified through a third-party source.

If the loan ends up being defined as a ‘high-cost loan’, both hazard insurance and property taxes have to be paid in on the first year of the loan. This is termed an ‘impound’ and can only be cancelled by the borrower.

The borrower has to be given a full disclosure statement regarding all of the terms of the loan he/she is taking out. This process is the same as if the customer were dealing with a stand loan through a bank.

Requirements can be strict, but closing can be completed in less than two weeks. Poor credit, a recent foreclosure and/or a loan modification will not automatically keep you from receiving funding. Being self-employed is not the stumbling block it often is with bankers and other traditional lenders either.

These are not the only requirements that owner-occupied Arizona Hard Money Loans have attached to them, but are a short list of the basics and provide an outline of the structure of this type of funding.

Point: the strict requirements may put some people off, but a point worth noticing is loans that have closed through this process have been approved for customers whose credit score was lower than 600. Another positive area is that proof of income can be shown through methods other than the normal ones demanded. On the average, there are no prepayment fees when a customer pays off the loan before the required time period runs out.

Let your current home work for you in ways you never imagined. Investigate an owner-occupied Arizona Hard Money Loan option today!

Remember the Devil really is in the details. Do your homework, read the fine print and find out where you stand in regards to the requirements.

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.

Dude, are you have trouble Financing you investment property?

Having trouble financing that real estate project you just know is a winner? Read Peter Allen’s story of how a Arizona Hard Money Loan gave him a helping hand when he needed one.

Maybe my bright idea isn’t so bright after all, Peter Allen thought as he read through the third letter from a bank rejecting his application for a real estate development loan. The mortgage companies were not any better, wanting absolutely perfect credit, proof of income that was the 9-5 weekly type and no holes like a loan modification. His credit was decent, but he was self-employed and awhile back, it was request a loan modification or not pay off what he owed. That had been a rough year, but he was back on his feet now with money coming in from small freelance projects and most of his debts paid. Still he wasn’t getting anywhere with conventional lenders.

It felt like a sunny day after a thunderstorm when he had noticed that vacant lot near where he once worked. The sewer lines were in good shape, new water lines less than a year old, power lines strung and it was located near a busy industrial area. It was just waiting for a good building that could be a restaurant, a club, something that would benefit local workers who didn’t want to drive long distances for lunch or settle for fast food joints. Someone was going to make good on that land—why shouldn’t it be him?

Tossing the letter, Peter picked up the phone book to call his brother’s office and an ad caught his eye that said: ‘Having trouble borrowing money for that great idea you have? Get in touch with Landon Funding—we offer deals that the banks can’t.’ He had heard of private financing, but never investigated it. What the heck, he thought and called for an appointment.

“Well, I see your problem, Mr. Allen,” Ken Landon said after hearing about Peter’s background and plans. “Banks and mortgage companies have a lot of rules and they have to follow them all. And if everything was perfect, it would still take six to eight months. That’s just the way they work. Arizona Hard Money Loans can be there when you need them. Do you own your home--is it paid off? Can you pay every month and once the project’s completed, pay off the remainder in one payment? Can you provide me with tax returns that will show an average of what you make every year?”

“Yes, my house is paid off. I have proof of past payments made on time even when I wasn’t working.” He smiled then. “I believe in records. My tax returns date back five years since I am self –employed. It helps when dealing with the IRS.”

“Great, get that stuff to me as fast as you can,” the man across him said. “Give me a couple of weeks. With your business plan, I believe we can make your dreams a reality.”

Peter drove home with a smile on his face, planning to call his brother over for dinner. He could hardly wait to give Frank good news for a change.

A Arizona Hard Money Loan was Peter’s answer. A month later, the loan had closed, papers were signed and money was in the bank. An ad in the local paper had already brought in a couple of construction bids and the Philly Homestyle restaurant group had called to see what he could offer, stating they were interested in the area. Check it out for yourself—they may be exactly what you need.

What is a Arizona Speculative Home Loan and how can it help you?

Simply put, this kind of loan is what industry defines as a loan or financing on a speculative property that has not been sold yet. These type loans are only a small percentage of the construction loan market. You may wonder how can I qualify for this type of loan, being mainly familiar with more conventional ones in the market.

Your project needs to have a strong potential to come through—this type financing requires a good bit of ‘walking around’ on the part of the borrower. Do the following things in order to give yourself a better chance of receiving the funding you need.

--Find a lot which is defined as ‘improved’, meaning it already has sewers installed, curbs poured and set, water lines in place and available power lines hanging. This will raise your chances of getting a buyer, and possibly reduce the amount of money actually needed for the project. Raw property will not have all of these advantages and sometimes not any of them.

--Location: property that is near urban population centers increases your chances of finding a buyer for the project you have in mind. For example, a popular restaurant setting up near a large business district has a much better chance of being bought since it would draw clients who don’t want to drive long distance to shop and eat and work if they don’t have to.

What else can you to increase your chances of getting a spec loan?

Since you are may be new to this, it is advisable to stay with projects that can be completed quickly in order to minimize the lender’s risk factor. These loans are generally short-term setups with low payments; once the project is completed however, the remaining principle comes due immediately. Occasionally a mortgage will need to be taken out on the property to finish off the remainder of the balance at the end of term.

Using possible equity in land is another option that can help you out. Some lenders will even require a borrower to do this before lending any money on a property. By using the property as a down payment, it sets the loan up as secured, again reducing the lender’s chances of losing money and increasing your chances of getting the funding.

Partners can be brought in on an arrangement like this, particularly if they have a better credit history, lower debt-to-income ratio and can aid with the down payment. The downside is that this cuts into your profits.

It is always good to look into all your options for a loan, including the conventional brokers and large banks that can carry these loans. Non-traditional lenders are often the answer since they emphasize collateral and your ability to pay more than high credit scores, straight line income and a glitch-free past.

Is a Arizona Speculative Home Loan your best bet? Investigate these type loans thoroughly before going ahead, then make an appointment with lenders. Arm yourself with documentation that shows your financial history, all the information about the property that you can collect and a budget with draw schedules to show.

Tuesday, March 26, 2019

Avoid Scams: Use a Reputable Arizona Hard Money Lender

Vet your Arizona Hard Money Lender to ensure you’re not being taken for a ride.

We live in a time where scams run rampant. We receive calls asking for personal information from illegitimate sources. We get emails phishing for our data. We have to live in a diligent manner in order to avoid the pitfalls of scammers.

Unfortunately, Arizona Hard Money Lenders fall into this category. While it’s not the norm, one bad apple can spoil the bunch. That’s why we’re here to tell you that places like Level 4 Funding are dedicated to providing clear and concise loan information so that you can feel comfortable funding your project with one of our loans.

Here are some ways to detect an illegitimate Arizona Hard Money Lender:

Too Good to Be True

We learn this from a young age and see it time and time again. There’s always fine print so you want to review any and all paperwork and contracts for the fine print that could get you into hot water. Things like large prepayment penalties may be hiding in the fine print, waiting to sneak up if you’re not prepared.

You Vet Them, They Vet You

Would you loan a stranger a large sum of money without knowing their background? Neither will a legitimate Arizona Hard Money Lender. They are handing over thousands of dollars and need to know that it’s going to someone who can handle the responsibility and plan their investment properly.

Extra Up Front Fees

While Arizona Hard Money Lenders may require a loan origination fee or a smaller sum of money as a sort of earnest deposit, if you’re being asked to hand over what seems like an unreasonably large amount of money before your loan is funded, beware!

Word of mouth is a great way to make sure you’re going to work with a tried and true lender. Speak to former clients and look up reviews. There are forums that you can find where investors talk about their experiences with certain Arizona Hard Money Lenders. If you’re seeing a lot of negative experiences, it might not be the lender for you.

Contact Level 4 Funding today to learn about our funding with no hidden fees or terms.

No Credit? No Problem for Arizona Hard Money Lenders

Whether you have bad credit or no credit, Arizona Hard Money Lenders can look beyond that to see the potential for a great investment.

There’s a lot of talk about bad credit these days. When people fall on hard times it can be the only way to get by, but it comes back to haunt you if you are unable to pay it off in a timely manner.

But what about those who don’t have credit? There’s an especially satisfying feeling being able to make large purchases without putting it on your credit. People work and save to be able to do just that. However, not having credit can sometimes be a roadblock just like bad credit can be when it comes to home loans.

Here’s why traditional lenders don’t follow in the footsteps of Arizona Hard Money Lenders when it comes to credit requirements.

Why Credit Matters

Credit shows your ability to budget your money and pay off large purchases. Banks use this as a gauge for how you will treat their loan should they fund it. Having bad credit shows that you haven’t been responsible with money in the past and taints your ability to secure funding.

No credit means there’s no record of your money management at all. Unfortunately that’s the best way to prove to lenders that you can fulfill financial responsibilities. A clean slate, in this case, isn’t good.

While Arizona Hard Money Lenders can look beyond not having credit, it’s beneficial to have some sort of credit history because it is an important part of many life events like applying for a job or student loans. You can get a secure credit card to begin building your credit history and display your ability to manage your money wisely.

Bypass the Credit Requirements

If you’re looking to fund an investment and don’t have the savings to do so, speak with a Arizona Hard Money Lender to see what your options are. Level 4 Funding, for example, has a proven track record of funding loans for investors with no credit or bad credit, enabling them to make their investment dreams come true!

Use a Hard Money Loan to Ensure Funding for Your Flip

A Arizona Hard Money Loan is a quick and easy way to fund your fix and flip investment, ensuring you don’t run out of money to finish the job.

One of the worst mistakes and fix and flip investor can make is not having the funds to purchase and rehab the home up front. It’s risky to rely on a previous flip to sell for enough to fund your next flip that’s already in progress.

Using a hard money loan can give you peace of mind that you’re not going to run out of money before the job is completed. You most definitely don’t want to be half way through the rehab and realize you can’t afford the rest. That’s the easiest way to stall a flip and lose money, lots of money.

Budget, Budget, Budget!

When you’re planning your flip you want to budget for things to go wrong. You may want to just replace an out-dated sink, but when the plumber begins the installation they may find mold or other plumbing issues that will need to be fixed. It’s rare to rehab a home and not have unexpected expenses. It’s the nature of the beast!

Your Arizona Hard Money Loan should allow for those unforeseen circumstances. The last thing you want to have to do is take out a secondary loan because you can’t cover the rehab with your first round of funding.

If you have proper inspections done you should be able to have a good idea of what you’re in for beyond the typical aesthetic upgrades. It’s an up front cost that will most definitely pay off in the long run.

Don’t Put Yourself at Risk!

Having to sell a partially completed home is worst case scenario. You’re fighting a losing battle trying to find someone willing to take on a partially completed project and that takes out a huge chunk of buyers who will only purchase move in ready homes.

As stated above, trying to secure a secondary loan can be difficult, and sometime impossible. Lenders don’t want to be second in line as that puts their funding at risk.

Speak with a lender about a Arizona Hard Money Loan and discuss having your project funded, with a little wiggle room so you can complete a successful rehab project and grow your investment portfolio!