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Friday, February 14, 2020

Will Your Property Appraise?

You’ll want to consider these things when choosing an investment property because hard money lenders will require an appraisal to fund your loan.

Hard money lenders have to protect their investments and one of the ways they do that is by performing a property appraisal to determine the value of the home before renovation, compared to after.

There are some steps you can take when choosing your fix and flip property that will help the home appraise and get your proposal accepted by a Arizona hard money lender so you can get that money in your hands to begin the project!

Great Location

If your real estate investment opportunity is a fix and flip, it’s important to have a property that’s in a desirable location to ensure you attract buyers easily. Check what type of businesses are in the vicinity of the property and distance from busy streets. Those both will have an effect on the value of the home and can determine your loan amount from the hard money lender.

Floorplan

This is one of the most important things to consider about your property. If you’re looking for a fix and flip you want to see it from that buyer’s point of view. Could you envision someone or a family living in that home? If you’re looking at a commercial property, is it set up to have cubicles installed if the renter so chooses?

Neighborhood Trends

Every city has trends when it comes to desirable neighborhoods. You’ll want to be on the nose with where the population is moving and how quickly those homes are getting taken off the market. If you’re looking at commercial investment property you want to know where businesses are thriving and sticking around through the ups and downs of the economy.

If you have a real estate investment opportunity and want to work with a Arizona hard money lender to make your dream come true, contact Level 4 Funding today and we can hear your proposal, appraise the property, and fund the loan quickly to get you on the way to earning real estate money!

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

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: 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.
© 2019 Level 4 Funding LLC. All Rights Reserved.

Thursday, February 13, 2020

Private Money vs. Hard Money – What’s the Difference?

Learn the difference between private money and hard money so you can make an informed borrowing decision.

In prior blog posts I’ve discussed the real estate jargon that all investors should be familiar with so you can talk the talk and walk the walk. There are two more terms that though they may seem interchangeable, they aren’t exactly the same.

Private money and hard money are two different ways to borrow money and I’m going to outline the differences below.

Hard Money

When you meet a hard money lender, it’ll be clear that lending is their bread and butter. It’s their business! That means they are ready to see your proposal and make a quick decision based on its merit. There are qualifications you’ll have to meet, but they are far less strict than those imposed by traditional banks. That means you don’t have to have a fantastic credit score.

Hard money loans are funded just as quickly as the decision is made! You can begin your fix and flip venture in some cases in as short as a week. Don’t miss a good deal when it’s in front of you!

Private Money

Private money loans can come from anyone who has the money to lend. It can be a family member, a friend, or a company. It is a relationship-based lending scenario that can take time to develop because they aren’t a tried and true lender, they just have the means to do so if they so choose.

They may also ask for some stake in the real estate venture because they are taking on a personal risk. Private money loans can also take longer to fund, causing you to lose out on deals.

That’s why we recommend using an Arizona hard money lender for your real estate business, whether you’re fixing and flipping or need a short-term loan for your buy and hold property. Contact Level 4 Funding today to discuss your next venture!

Wednesday, February 12, 2020

How Car Sales Can Determine Real Estate Strength

Keep an eye on car sales to help inform your real estate decisions when you borrow from a hard money lender.

Real estate investors are savvy when it comes to the housing market, but when they’re ready to borrow from an Arizona hard money lender they will pay attention to the bigger picture to make important decisions about their portfolio.

There are two large financial indicators of the economy because they are the two biggest purchases most people will make: cars and houses. So how do car sales inform real estate investors of the strength of the real estate market?

When car sales change drastically, it can be a foreshadowing of a bigger economic upturn or downturn. Recently, car sales for the big brands like Toyota and Honda have dropped drastically. If consumers aren’t making large purchases like cars, the real estate trends will tend to follow, and vice versa.

As the economy trends that direction, consumers will become wary of other big purchases like homes and real estate investments. Why is that?

Consumers Hold Their Breath

We all remember the big real estate bubble that burst in 2008 and buyers and sellers are anxiously awaiting another large sway in the market. Though we may see something similar, we won’t see a burst to that extent anytime soon.

That being said, some owners are wanting to sell their homes before that tide does turn. That means we may see an influx of homes on the market after the new year. That’s the time for real estate investors to get their hands-on homes to fix and flip, or to buy and hold.

If you have any questions about how to use a Arizona hard money lender like Level 4 Funding to help you make a purchase for your real estate investment portfolio, reach out to us to find out what we can offer.

Tuesday, February 11, 2020

How to Fix and Flip in a Seller’s Market

Hard money loans can help you fix and flip a property. In a seller’s market it can be difficult to find affordable inventory.

So you’ve got your Arizona hard money loan proposal almost complete, you just need the perfect property. That can be hard to find if it’s a seller’s market which means prices are inflated and inventory is low. Here are some ways to keep your fix and flip business going through the highs and lows of real estate.

Look for FSBO Properties

FSBO means for sale by owner. Some sellers won’t use an agent to list their property so it won’t hit the online home sites. You may only find them by driving by and seeing as sign. That makes them more difficult to locate, but it gives you the opportunity to negotiate directly with the seller and you’ll be able to explain your offer face-to-face, getting the most for your hard money loan. This can also save money on your deal because they most likely won’t be paying a commission to sell.

Have a Realtor On Your Side

Realtors also have the opportunity to see properties that may be a good investment for you by seeing what is going into foreclosure soon so you can swoop in and make a cash offer to keep that person from going under on their home and losing it to the bank. This is an opportunity to get the house for what they owe, rather than having it marked up and potentially getting in a bidding war on a home that’s already listed.

Inflated prices due to a seller’s market can make it difficult to keep your profit margins up so it’s important to find other ways to get your hands on a house that will provide a good return on your investment. The tide will turn eventually, as real estate always does, and you’ll have the opportunity to scoop up properties much more easily, but it’s important to be prepared for when inventory is low so that you can keep your business afloat.

When you’ve found that property, whether it be a FSBO or a pre-foreclosure home, bring your investment strategy to a lender like Level 4 Funding to discuss your Arizona hard money loan and how we can help you achieve your fix and flip goals.

Wednesday, January 29, 2020

How to Get Started with Arizona Construction Loans

If you’re building a new home or business, you’ll be looking for Arizona Construction Loans rather than mortgages. Get to know the basics beforehand, so you can move forward without delays.

Contrary to popular belief, getting approved for Arizona Construction Loans isn’t necessarily difficult, but the process is different than going to get a traditional mortgage. People use them all the time when they’re building new structures or doing major renovations, and you don’t need to have perfect credit or be a builder to get one.

Before you attempt to get approved, though, you’ll want to make sure you have three key things in place; the plans, a comprehensive budget, and permits. In other words, if you aren’t a builder or a contractor, you’ll need to have one on your team before you get started. All aspects of the build will need to be outlined with estimates from the contractors or subcontractors who will be handling each task. The plans will also be necessary to get permits, and the permitting process usually takes a few weeks by itself. Having an experienced contractor pays off here because someone who routinely works in your area will know exactly what the review process entails and what inspectors are looking for, so permits are issued promptly. However, the permitting process can stretch out longer if there are questions or if the project is especially complex.

You’ll also want to take some time to get your finances in order beforehand. Depending on how you go about getting financing, you’ll need to address how you’ll make a down payment, check your credit score, prove financial strength, and demonstrate that the build will be a financial success.

Find Out What Form of Lending is Right for You Before You Begin

It’s difficult to get Arizona Construction Loans through banks because they don’t make a whole lot of profit off them, and so they heavily restrict who they’re willing to lend to. You have to be an incredibly low-risk borrower in order to get approved, and even then, the terms might not be great. That doesn’t mean a bank won’t help you, only that it’s worthwhile to explore multiple funding options before your start paying for plans and permits out-of-pocket.

If banks won’t help, you can get your project off the ground with hard money.

One alternative to bank Arizona Construction Loans is hard money. With this method, you’ll still need to have some of your own cash in hand to get started, but you can get up to 90% LTV. Best of all, you can make interest-only payments on the loan during construction, and then either sell the property or approach a bank for a conventional mortgage after the build is complete, when they’re much more likely to help you out. You’ll still need to have plans, a budget, and permits to qualify, but things like your personal credit are less of a concern with hard money, so it’s much easier to qualify and get your project moving forward fast.

Tuesday, January 28, 2020

Top 3 Tips for Getting First-Time Arizona Rental Property Loans

Getting Arizona Rental Property Loans as a first-time investor can be a challenge. With a little outside-the-box thinking, you’ll increase your odds of success.

We’ve come a long way since the market crash. Home values are climbing virtually everywhere and interest rates are low, making it a great time to purchase investment properties. However, if you’ve started looking into Arizona Rental Property Loans, you’ve probably noticed they’re not easy to get, particularly if this will be your first investment property. The good news is, you can still get financing, but you’ll have to be creative to make it work.

1. Have a sizable down payment. If you’re attempting to get bank financing, 20% is still the norm for owner-occupied homes. Once you get into investing, banks start to look for at least 25% before they start offering favorable terms. Owner-occupied borrowers can also sometimes get a second mortgage to help them cover the 20%, but it’s very difficult to get one for investment properties.

2. Demonstrate strength. Lenders look for financial strength in three key areas. Having a good credit score is one. For traditional lending options, you’ll likely need to top 740 to get good terms. Lenders will also consider your reserves. They’ll want to be sure you can afford to make good on the payments even if your property is vacant for a period of time. The loan-to-value (LTV) matters as well. This is the amount of the loan compared to the value of the property. For example, if you’re taking out a $60k loan on a $100k property, your LTV is 60%. The lower the LTV, the more likely you’ll be to get financing and good terms.

3. Skip the big banks. The reality is, most people looking into investment properties aren’t going to be able to bring a big down payment or demonstrate strength in the ways big banks want. Chances are, you’ll have more luck with a neighborhood bank or by going with some form of alternative lending.

Hard Money Can Make Your Investment Dreams Come True

One form of alternative lending is hard money, and it works well for Arizona Rental Property Loans, even if you’re a first timer. Hard money can be used to purchase properties for short-term renters, such as those listed on Airbnb or HomeAway, on traditional homes, and on multi-unit properties too. While LTV still comes into play, things like your credit score matter less, so it’s easier to qualify.

Once you’re successful, you can move onto a conventional loan with greater ease.

Hard money Arizona Rental Property Loans aren’t a permanent solution, but they’re a great way to get your foot in the door and start generating income. Many people use them to purchase fixer-uppers, make repairs, and get tenants in before going for a conventional loan. By approaching it this way, you can build up your cushion for the 20-25% down, increase your reserves, and increase the value, so you’re a strong buyer with cash ready. If you’re ready to get started generating a steady stream of income, consult with a broker who works with hard money.

Monday, January 27, 2020

Harvard Study Shows You’re Approaching Private Money Lenders in Arizona Wrong

You want to put your best foot forward when approaching Private Money Lenders in Arizona for funding, but research out of Harvard Business School suggests most people are approaching business situations totally wrong. Catering to people and bragging will not help you get ahead, but authenticity just might.

Prepare to be mind-blown. A collaborative study including researchers both Harvard and Wharton suggests you’re approaching business deals wrong, but then again, most of us are. The study looked at two distinct areas; how people view humblebragging and how they view catering. Both techniques are routinely used in business as a form of self-presentation. People use them as tools to make a good impression, and most people believe they’re effective at getting others to like them.

To test the impact of humblebragging, researchers had more than 100 students answer a fake job question regarding their biggest weakness. Over three-fourths responded with a humblebrag. These are the well-rehearsed lines we’ve all been trained to give in interviews. For example, “I’m a perfectionist and it can be irritating,” or “I’m so driven that I sometimes forget to take breaks,” or “I graduated Ivy League, so my peers can sometimes be intimidated by me.” You probably have your own humblebrags as well; for social media, business meets, interviews, and so on. Unfortunately, these kinds of phrases actually sends the message that the speaker is not self-aware and puts the individual in a less favorable light. In follow-up studies, the researchers discovered that people prefer outright braggers and even complainers over humblebraggers.

The group also tested how catering to someone impacts likability. The situation here, however, was just like what people do every day with Arizona private money lenders. They tested how entrepreneurs were received when they approached investors and asked for funding. In some cases, the entrepreneurs catered to the investors by demonstrating that their interests were aligned or by trying to behave in a manner they felt the investors expected. Although most people believe that catering will make them more likable or trustworthy, the inverse is actually true, according to the study. Those who catered were evaluated more poorly than those who did not.

You’ll Be More Successful if You’re Authentic

Regardless of whether you’re approaching private money lenders, an interviewer, or even your friends on Facebook, people prefer that you’re authentic. Being authentic, in spite of any flaws or shortcomings, may actually be the thing that lands you your next job or gets your next deal funded. That’s because people can see through your attempts to present yourself a certain way and it brings everything else into question.

Temper your bragging with self-awareness for the best results.

There are times it’s ok to brag. For example, if you’re approaching Private Money Lenders in Arizona and you have a great track record with fix-and-flips, show off your successes. Don’t hesitate to demonstrate your skills. However, if you’re asked about shortcomings or challenges you’ve faced, you’ll likely do better to give an honest assessment of yourself, minus the humblebrag.