Trust deed investing takes money just like all the other real estate ventures that you may undertake. You have a plethora of options that you could take when you are trying to fund your first trust deed investment. In this brief you will learn about all the institutions that are willing to give you a loan.
So you are looking to dive into the deep end of the trust deed investing pool, but you are having trouble finding lenders. You have found the perfect location, the perfect building and the deed of trust are available, as well. Now all you need is the loan. The process of getting a loan is complicated and nerve-racking even if you are not in the commercial real estate field. It could take weeks or months for certain loans to be approved; even then you are not guaranteed a loan at the end.
What happens if the place you are looking at has more than one party interested in it? You have to be able to quickly get those funds before someone else undercuts you. Luckily for you, if you are familiar with the commercial real estate business many of the lenders that you already know are able to provide you with the loans that you are seeking.
For example, let’s say you have a low credit score, and your local bank is not willing to lend you the money you need. In this case, a hard money lender would most likely yield the best outcome. If you decide to apply through a hard money lender, you can expect basically the same process with a regular investment. As usual, they will charge you higher rates than the bank normally would, but you would most likely receive the loan quicker. There is also an origination fee that is paid to the lender when you receive the loan. It is represented by posts that correspond to 1% of the loan amount.
Bridge loans can be used when trust deed investing as well.
Without a doubt, yes, you are able to use bridge loans for trust deed investing. In fact, more often than not hard money loans and bridge loans can be mistaken for the same thing. There are subtle differences, however, with a bridge loan you would typically want to have more reliable credit. Most of the time banks would lend a borrower a bridge loan.
There is one big advantage that bridge loans have over hard money loans; the property does not need to be in great condition. That being said, you do not want to purchase something that will not help with your monthly payments.
Make sure you do your research when trust deed investing.
So you know where you could go to receive help, but now how do you go about getting it. One of the best ways is by relying on your connections. Use people that have experience with trust deed investing. Look at their reviews online; email some people if you have to, as well. Just make sure you feel comfortable with your decision in the end.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.