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Thursday, March 28, 2019

Arizona Hard Money Lenders: could these less-than-traditional lenders be the answer to your funding problems?

(All the ads—internet, paper and the current pain, robo calls—say they can solve your funding problems, no matter your past financial history, etc. Take the time and effort to find out if one of these could actually help you locate the money in order to make your current project into reality instead of words and drawings on paper.

Arizona Hard Money Lenders have come quite a distance from the time when they were termed as someone you did business only if you couldn’t get a deal from anyone else. It was said they were a dark shadow on the industry. Today it is very different—Arizona Hard Money Lenders rank alongside conventional mortgage lender sand banks, conducting business from a different angle with methods that make it somewhat easier for some individuals’ money needs.

Working from independent businesses or private investors, these lenders lay out a plan where the borrower gets their loan with security through real property value, that being something the customer already has possession of or is going to acquire in the near future. The borrower is required to provide a detailed business plan for the property they wish to buy as well as how they intend to repay the money they are asking for. The lender generally has the customer paying interest and a fraction of principle monthly with the remaining amount due at the end of payment period. Terms can be as short as one year or as long as five years.

What will you gain by working with a these type of lenders?

These lenders are set up to help out people who have or have had problems that keep their applications from being acceptable to traditional funding agencies whose requirements are more numerous and much stricter. Individuals who don’t have a company supplied income with a straight-line 9 to 5 job often find it hard to obtain a loan from a bank or mortgage company. If they have a foreclosure or loan modification in their financial history, this slows down the already long application process and sometimes makes it impossible for funding to be dispersed.

Any one of these things could knock your application out of the running, losing you all the time and effort put in already. Starting over will mean the same thing at other companies. This is when a hard money lender could be exactly what you need since they tend to emphasize whatever collateral you have and your ability to repay rather than a perfect credit report or your past income history. Occasionally a loan can be applied for, accepted and closed within as short a period as two weeks.

Research deeply and thoroughly to find out everything about these type lenders; compare both the positives and negatives—funds obtained via this route have a higher interest rate attached than conventional monies. Talk with both these lenders as well as the more well known ones and once you have all the needed information, make your appointments and go after what you have been dreaming of.

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.

Private Money Lenders: you may need a detective to find them, but they pay off in the end.

(A Private Money Lender In Arizona could possibly solve your current funding difficulties .This is especially true if conventional funding is unavailable. Check into these loans to discover if they are what you need.)

Someone has suggested real estate as a good area to invest in and you agree with them. However, when you were younger, you bought a piece of property in the hopes of selling it at a profit, but the deal didn’t work out and a personal matter ate up the savings which would have kept you solvent with payments. The bank who had loaned you the entire amount for buying foreclosed. As a self-employed contractor who is paid by the job, your income is described as not steady even with all your debts being paid off now and money coming at a relatively good rate. Traditional lenders, as you have discovered, will look at these things and either deny your application altogether or hold it so long that the property you had in mind will be sold to another buyer who has funding available.

Your tennis partner suggested that you look into hard funding, pointing out that Private Money Lenders have another focus for lending money and better still, numerous types of loans, ranging from bridge and rehab loans to commercial and business only funding. First on the list—research private lenders and investigate the ones who are experienced in the kind of loan you need.

Why is this sort of lender a positive choice for funding?

Private Money Lenders In Arizona set up their lending via a secured loan, mainly concerning property that will be purchased, renovated and sold as soon as possible, sometimes commonly termed a ‘fix and flip loan’. The security or collateral reduces the lender’s losing their money in case the borrower becomes ill or cannot pay back the money for whatever reason. This also is a benefit to both lender and borrower’s taxes when everything is properly structured. Fees, normally negotiable, are generally charged to the customer by the financier.

The common term for these lenders is ‘relationship-based investor’ due to the fact you may borrow from a close friend or a work colleague, as well as going through corporations that are designed for the business of short-term investment funding.

You must look carefully into the aspects of private funding since each loan is designed individually and conditions stretch from the kind of loan and time for repayment to what the down payment percentage will be and what interest rate will be charged. A down payment usually has the borrower making only interest payments over the length of the repayment period and then making a single large payoff (termed a balloon payment sometimes) at the end of the term. Normally the time is around twelve months.

Be a detailed hunter—note every broken branch and side trail and find out what Arizona Private Money Lenders have to offer, how much you have to gain and what position you hold. Go after that better life you have been wanting!

Rental Property Loans: Could I use this kind of property for loan collateral?

(When conventional investment people cannot or will not help you float a loan using rental property--land, buildings, or otherwise--you might try looking into a Arizona Rental Property Loan via the hard money route in order to clear one of the biggest obstacles—financing—out of your path.

You know the old saying: you have to have money to make money. Buying property demands that you generally have a large amount of funding. Bank and mortgage companies lend money, yes, but it is a long arduous process in which your credit history is checked piece by piece. A lot of mailing, calling and in-person trips are involved to secure the documents needed. Once this process has consumed a great deal of time, if there is a bump here and there in your history, the entire process may come to a grinding halt and in a lot of instances, cause your application to be rejected.

For example, let’s say you own a storage complex on the edge of town, buildings in decent shape, but in need of some work i.e paint, new flooring and definitely new security system. You’ve had a robbery and an attempted robbery even with good locks and cameras. The police don’t have a habit of patrolling the area with any regularity either. All of the banks and financing companies you have talked with thus far have defined your property as a risk they don’t want to take. “Well, we don’t lend money on property that isn’t in good shape and the fact that you have been robbed also increases the chances we will lose money.”

Despite the widespread opinion that most people hold about traditional funding being the way to go when borrowing against any type of rental property, occasionally it is wise to seek other options and Arizona Rental Property Loans may be exactly what you need

How would this type of loan help me?

Let’s look at three ways you could benefit from this type of financing:

1. When approved you will receive your money faster, a definite advantage since you need to have funding on hand as quickly as possible.

2. A larger amount of money may be available, allowing you to cover more costs on the project you have in mind in a shorter period of time.

3. You will be able to add more to your real estate portfolio. Everyone needs something to show that their faith in themselves and their work is justified. Down the road this deal could aid you in your next project and a good relationship with the lender would be another ace in your hand.

Finally, these loans don’t require a down payment as most banks do, a very positive factor in their favor since most upfront payments charged by a conventional lender begins at 20 percent of property value.

You will, however, pay higher fees and interest rates for this form of funding. A Arizona Rental Property Loan through hard money is not necessarily for everyone, but it is certainly worth investigation. Take a deep breath, turn your computer on and look at the possibilities of letting your rental property pay off in ways you never imagined before.

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.

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.