The vast world of commercial real estate lenders is in for a few changes in the New Year. For many this may not come as surprise, but as a potential borrower or an investor, you are going to need to know how these pending changes and new trends will affect you.
Working withtraditional commercial real estate lenders has always been a rite of passage for most business people. However, in the coming months that may no longer hold true. The reason you will see more and more people shying away from traditional commercial real estate lenders is due to the uncertainty will recently implemented regulations. Thus,this climate has opened the doors for more non-bank lending or rather non-traditional lending.
Of course, as a potential borrower or investor this is not necessarily bad news. As you may already be aware, most traditional avenues of lending were often stingy with their approvals. But, one potential consequence of this trend is that non-traditional lenders will now up their requirements and criteria either now that they are dealing with a wealth of potential borrowers and investors or they will become so unregulated that another lending crisis occurs. One pending change that definitely adversely affects everyone is the increased rates, which though minimal in percentage still make it that much harder for borrowers to meet the terms of their commercial loans.
Yet, another predicted trend in 2017 is the decrease of foreign investments. For instance, it is has been predicted that China and other foreign countries are making it a point to not invest as much as they have done in previous years. This trend is one more issue to add to an already uncertain climate, thus as most of the country watches and waits for what is to come so too are players in the commercial real estate industry. Unfortunately, with so much uncertainty, you as a borrower or an investor may not know if this year is the right time to make your business venture a reality. Therefore, it is highly recommended that you reach out to local lenders and see what your real options are amidst all of the possible confusion that is to come with this current presidency.
These above-mentioned changes and trends may or may not stand the test of time, thus as a savvy business person you should take stock in your plans. This is why there are brokers, lenders and a whole host of people in your corner. Nevertheless, if you are more of the do-it-yourself kind of business person then it never hurts to do your research and seek advice of counsel before making any major decisions.
On the Verge of a Commercial Real Estate Deal
On a final note, if you are on the verge of getting approved or have submitted a dozen plus loan applications already, then it is important that you stay on top of the current changes and trends. But, remember, if you already started the lending process, then you will likely have nothing to worry about, at least until the next business venture.
Dennis Dahlberg Broker/RI/CEO/MLO Level 4 Funding LLC Private Hard Money Lender Arizona Tel: (623) 582-4444 Texas Tel: (512) 516-1177 Dennis@level4funding.comNMLS 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.
If you are like most, you probably think that all lenders are alike; well, you might want to think again, when it comes to hard money lenders. California is no stranger to these particular kinds of lenders and is the best place to really note the distinction between private money and hard money lenders. Clearly, when dealing withprivate money, you are for the most part dealing with private money lenders and not necessarily hard money lenders. California based lenders, however, make it a point to make a clear distinction between these two kinds of financing. For instance, private money is generally obtained through close personal working relationships and is used for investment properties and ventures. Thus, California lenders who offer private money tend to be more flexible with repayment options and more tailored to a specific group of borrowers.
On the other hand, hard money is almost always obtained via hard money lenders. California lenders of hard money look at the actual property being purchased and essentially determine if there is enough value for them to loan you funds. Moreover, these particular lenders tend to cut through the red tape in comparison to private money lenders and traditional lending institutions. The reasoning being that, again, these particular lenders (hard money) are more focused on the property value and in reality, the approval is just the beginning for these kinds of lenders.
This means that hard money lenders take things a step further and typically manage many of the processes necessary to get your loan closed. For example, it is not shocking to see your lender create your loan package, order the necessary forms such as your title and appraisal report. Hard money lenders will also generally verify payoffs and/or restatements advise you on the best loan program as well as provide all your disclosures. Furthermore, your lender will likely handle underwriting responsibilities, investor matching, decide on a loan servicers for your loan and create/manage pertinent documents (loan docs, loan settlement and/or closing). Of course, this is just a quick overview of everything your hard money lender can do for you. So, let us discuss a more in-depth explanation of one of the main services—the loan package. Beyond Approval
Creating your loan package is no minor tasks. In other words, your lender will spend some time making sure that you have everything you need to secure an investor. It is important to let your lender take the lead on your loan package for several reasons. The main reason being that a tailor-made package that knows the market and is well documented/organized is what will attract quality investors. In your loan package, you will have a credit report, financial statements, statement of information, tax returns, proof of relevant liabilities and assets—just to name a few. A Win- Win Solution
Ultimately, all of the above is what sets hard money lenders apart from the pack. Moreover, an reputable and highly experience lender of hard money will make sure the entire process from start to finish is as seamless as possible, which gets you one step closer to making your real estate dreams a reality.
Dennis Dahlberg Broker/RI/CEO/MLO Level 4 Funding LLC Private Hard Money Lender Arizona Tel: (623) 582-4444 Texas Tel: (512) 516-1177 Dennis@level4funding.com 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.
There is all this talk of private money and hard money lenders, California based lenders—the list goes on. However, if you are like most people you are probably a little unsure about the basics, which is perfectly okay because you came to the right the place.
If you are just starting your investment project or commercial venture, then most likely you are looking for a quick and affordable loan. But, before you become all gung ho and commit to the first lender you find, it helps to know the difference between private and hard money lenders. Californialenders offer a wide range of private and hard money loan options, thus you need not look far for a reputable and accommodating lender. Instead, all you need to do is figure out which kind of financing is right for you.
Hard money, then, is typically the best option for resales and rehab investments. The reason being that hard money is at its cores is financing for asset-based endeavors. In other words, hard money is for commercial, industrial, residential (single-family and multi-family), and land. Private money, on the other hand, in essence, can be used for any purchase or investment project as a private money lender can be an individual or a company. Thus, you should ask yourself, what exactly you are trying to accomplish with this financing, especially when dealing with hard money lenders. California lenders that offer hard money financing are more than willing to lend a helping hand – pun intended. Therefore, it also helps to know what to look for in a hard money lender—if, in fact, you do decide to go with hard money financing.
With that being said, let us go over a few important things you should look for in a hard money lender. For instance, it almost goes without saying that, you should be looking at lenders that have a clear understanding of your particular business plan. This means doing a search for reputable lenders in your area and then doing some investigating to see if they offer niche programs that are applicable to you.
The Right Helping Hand Money Lenders California
Once you have narrowed your list of lenders, who understand your needs, the next step is to make sure your chosen few operate with a high level of transparency. This means that you, your lender and any other involved party should have access to your loan data, etc. Thus, if you come across a lender that is unwilling to be forthcoming with loan data or details—you should cross them off your list. Besides, a high level of transparency, it is also important to make sure your potential lender is licensed.
Things to Consider
Other things to consider include your hard money needs (project, budget, unforeseen expenses, etc.) and each lender’s loan-to-value ratio/guidelines. Remember, not every hard money lender has the same ratio or guidelines. Moreover, it is imperative that you know what terms you are signing up for. Ultimately, once you have tackled all of these things, you will pretty much be on your way to securing that financing.
Dennis Dahlberg Broker/RI/CEO/MLO Level 4 Funding LLC Private Hard Money Lender Arizona Tel: (623) 582-4444 Texas Tel: (512) 516-1177 Dennis@level4funding.comhttp://www.Level4Funding.comNMLS 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.
Residential Hard Money lenders are not always discussed at length, as many investors and borrowers are more interested in all things commercial. However, that does not mean there will never come a time for residential hard money lenders, so let us go over what you should know.)
Unsurprisingly, residential hard money loans are really just financing for traditional real estate. This means properties such as single-family or a duplex would constitute or rather qualify for a residential hard money loan. This seems simple enough, right? Of course, it does. But, nevertheless, you may be wondering what the real difference is between a standard or traditional loan/mortgage and residential hard money financing? Well, there are actually a few subtle differences.
For starters, when it comes to dealing with residential hard money lenders versus the bank, you will quickly see those differences. For example, banks typical require quite a bit of documentation such as proof of income, credit score, appraisal, financial statements and so on. Yet, when dealing with residential lenders and hard money financing you need a lot less. This means if you show up with residential real estate assets in tow (not actually in tow) and have pretty much everything you need to start the approval process.
Moreover, with residential hard money financing, you do not need to meet any minimum FICO scores requirements or pay any upfront fees. Lastly, you will typically receive your hard money loan for a residential property within 10 business days versus your standard 60 days or more with a traditional loan/mortgage. Thus, as you can see, there are many reasons why an investor or a borrower would consider working with a residential lender that offers hard money financing.
Managing Your Expectations with a Residential Hard Money Lender
Nevertheless, it is still important to manage your expectations when dealing with these particular lenders. You may think since there are a variety of California-based lenders that offer residential hard money financing all you need to do is show up and sign. Well, the reality is residential hard money loans have a time and a place. In other words, you need to make sure that your particular investment or project is right for this kind of financing. Of course, any lender will be glad to help you determine if you should proceed with residential hard money. However, if you are like most people you may want to know ahead of time if you should be working with a different lender or a financial institution.
The Real Deal Residential Hard Money Lenders
Consequently, here is something you should definitely keep in mind when determining what kind of lender you should be working with. Above all else, it is important to note that residential hard money financing is appropriate in a variety of scenarios such as impaired credit, liens or judgments, time constraints, pending foreclosures and Foreign Nationals—just to name a few. Thus, if you are still interested in your residential hard money options, it helps to focus your lender search on niche lenders that can meet your needs (whatever they may be) and vice versus.
Dennis Dahlberg Broker/RI/CEO/MLO Level 4 Funding LLC Private Hard Money Lender Arizona Tel: (623) 582-4444 Texas Tel: (512) 516-1177 Dennis@level4funding.comhttp://www.Level4Funding.comNMLS 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.
If you are searching for hard money lenders, California is more than likely the best place to start. The main reason you should start your search in California is that you likely have a particular niche, say for this instance it is fixing and flipping houses, you need a lender that is no strange to that market or any other market.
When looking to flip and fix a house, the reality is the best place to start looking for financing ishard money lenders. California lenders that offer hard money financing for this particular niche have a clear set of criteria before you even walk in the door. This may sound like a bad thing at first, but the truth is that a clear set of guidelines means you know exactly what you need to do get the ball rolling on your financing.
Thus, as you can probably guess, it is important to know the criteria no matter your niche. Nonetheless, for the sake of flipping and fixing houses, let us go over that standard flip and fix criteria for hard money lenders. California lenders who offer hard money financing for flip and fix projects generally look for the following things: a clear understanding of the property’s value, the ability to move quickly to give you a timely response, reasonable terms and rates that you can adhere as well as the ability to build a growing relationship.
This may seem like a tall order, but the good news is that you as borrower or even an investor should want these thing as well. For instance, being able to understand the real value of your property means you and your lender are informed. Moreover, it gives you an opportunity to have a meeting of the minds with you and your lender. Similarly, when everyone is clear on the value and the percent of financing then it allows for the entire process to move along faster.
Speaking of a quick response, again you also, no matter your role in the loan process, want things to move along quickly. Think about it, with a flip and fix everyone’s profitability margin really depends on how quickly everything can be accomplished. Moreover, going over the terms and rates with your lender to ensure that you are able to meet them given your situation, again, not only benefits you, it also helps to foster a good relationship with your lender. Lastly, it is important to build this relationship because your new lender can become an asset for future endeavors and it helps provide a potential helping hand if you do have trouble meeting the terms down the road.
Benefits all around
Ultimately, knowing the basic criteria of your hard money lender helps everyone. Therefore, there is no reason you should not do your research/ preparation beforehand so that the entire process can be as streamlined and beneficial as possible. But do not take our word for it; speak to a few hard money lenders in your area and California too.
Dennis Dahlberg Broker/RI/CEO/MLO Level 4 Funding LLC Private Hard Money Lender Arizona Tel: (623) 582-4444 Texas Tel: (512) 516-1177 Dennis@level4funding.com http://www.Level4Funding.com 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.
Why Choose Level 4 Funding for California Hard Money
For instance, starting out with the benefits, you will find
out early on that these particular loans are approved and funded quickly, which
is often the main reason people choose to use hard
money lenders in Californiain the first place. The
next benefit you will find is that hard money financing options have fewer
requirements. This means that unlike traditional financing options or bank
lending you will not have to deal with an exorbitant amount of red tape.
Consequently, common red flags such as bad credit, a previous foreclosure or
bankruptcies are less likely to harm your chances of getting approved.
Another
major benefit to Hard Money loan California is the
ability to get a project funded that you were unable to get funded or rather
financed anywhere else. One common example is a fix and flip project. Often,
banks are not interested in short-term lending. This is not to say that banks
do not offer short-term options but rather that banks are in the business of
making money and the easiest way to do that is to approve long-term loans more
often. Furthermore, banks look at these kinds of projects such as a fix
and flip as high-risk which only make getting financing harder.
So now that we’ve covered the major benefits of all things
hard money, let’s talk about those pesky pitfalls and disadvantages. The top
disadvantage when dealing with hard money financing is of course that higher
than average interest rate. But, in reality, just as banks need to make a
profit and are concerned about high-risk borrowers, non-bank lenders need to
see some return on their investment hence the higher rates. Disadvantage number
2 is the fact that hard
money financing is only available for short-term use. This means if
you are looking for financing for a project that others have deemed high-risk
for more than 1-5 years you may have to look elsewhere.
Lastly, hard money loans require either a minimum amount of
equity i.e. at least 25% or a significant down payment. In the world of California Commercial Hard Money, that
minimum amount becomes 40% and the down payment is much larger. This increase
is ultimately due to the fact that if there is a default, selling the
commercial property is much harder to do and often requires a discounted sale
price in order to recoup what the non-bank lender lost.
Private California Hard Money Lender Requirements and
Regulations
When
dealing with a California private hard money lenderthere are several things you need to
know to ensure that you are not falling victim to predatory lending. Moreover,
let’s go over a few tips so you are not just borrowing blindly.
As you are probably already aware, hard
money lenders, in essence, are still private money lenders. This means that
your potential California
private hard money lenderis a non-bank lender. Historically, non-bank
lenders have been able to lend money with limited regulations. Originally, this
flexibility with California private hard
money lender requirements made sense as the government shouldn’t be able to
tell your father that he cannot lend you some cash for your start-up.
But, now financial reforms which were
absolutely necessary after the real estate collapse means that there are some
requirements when it comes to non-bank lending. For instance, the issue of
mortgage licensing was not applicable to non-banker lenders i.e. individuals,
companies and so on. Moreover, due to the almost overwhelming number of
non-bank lenders in California, these new requirements have a lot of weight.
So what exactly do new regulations and
requirements for potential borrowers and you? Well, for starters, there is now
a fixed interest rate (the Usury law ensure that you will not be charge
excessively high rates) that applies to these particular types of loans. In
California, that “usury rate” is a maximum of ten percent per year. In addition
to making sure that you aren’t financially drowning due to a commercial
purchase or business purpose loan, etc., as previously mentioned, the issue of
mortgage licensing now affects what type of property you can use hard money
financing for. You also now need more documentation in order to properly secure
your hard money loan than you once did.
The Benefits of Hard
Money Loans California
Considering
a hard
money loan in Californialoan
for your next commercial project or business plan? If that’s where your
financing search is headed then it’s important to know the pros and cons.)
By know you know Hard
Money Lenders California are some of the most readily available hard
money financing options, which is great for shopping around for the best rates
and terms. But, in general, you may be wondering what exactly the benefits or
rather advantages of hard money Lenders
in California loans are? Moreover, you may also want to know exactly what
the disadvantages are of these particular kinds of loans. Well, the good news
is the benefits outweigh the disadvantages by far.
For instance, starting out with the
benefits, you will find out early on that these particular loans are approved
and funded quickly, which is often the main reason people choose to use hard
money in the first place. The next benefit you will find is that hard money
financing options have fewer requirements. This means that unlike traditional
financing options or bank lending you will not have to deal with an exorbitant
amount of red tape. Consequently, common red flags such as bad credit, a
previous foreclosure or bankruptcies are less likely to harm your chances of
getting approved.
Another major benefit to hard money is
the ability to get a project funded that you were unable to get funded or
rather financed anywhere else. One
common example is a fix and flip project. Often, banks are not interested in
short-term lending. This is not to say that banks do not offer short-term
options but rather that banks are in the business of making money and the
easiest way to do that is to approve long-term loans more often. Furthermore,
banks look at these kinds of projects such as a fix and flip as high-risk which
only make getting financing harder.
How to find a California Private Hard Money Lender
(When
it comes to finding a California
private hard money lender, you probably don’t even know where to begin
or rather how to start a viable search and that is okay. In California, there
are so many lender options that you will more than likely need a helping hand.)
Generally, when you are trying to a
reputable California
private hard money lender the first place you should start is by
checking the nationwide lender directory online. This particular directory
allows you or anyone to search by loan type, loan size, location or keyword
such as construction loan, etc. Moreover, this directory will provide you with
direct access to your potential lenders in general or specific private non-bank
lenders. In addition to searching for a private
hard money lenderCaliforniavia
the nationwide lender directory, you can also ask for references from your
business associates.
Regardless, of which search method you
choose to take advantage of, finding a few good names doesn’t mean you are
done. Clearly, you need to contact at least your top 10 lenders and present
each of them or the majority of them your loan scenario. Remember, it is
important to find a lender that is likely to approve your loan request, but it
is also important to work with someone that you feel comfortable working with.
Once you have set your sights on your
future lender, the next step is clearly the application process. Nevertheless,
it is still important to highlight that you make sure your future lender offers
the commercial real estate loan type that is right for your business venture or
project. By taking the time to make sure you have chosen your best option as
well as the most compatible private lender you will ultimately save yourself a
lot of time and money.
Consequently, here is something you should definitely keep in mind when determining what kind of lender you should be working with. Above all else, it is important to note that residential hard money financing is appropriate in a variety of scenarios such as impaired credit, liens or judgments, time constraints, pending foreclosures and Foreign Nationals—just to name a few. Thus, if you are still interested in your residential hard money options, it helps to focus your lender search on niche lenders that can meet your needs (whatever they may be) and vice versus.
Dennis Dahlberg Broker/RI/CEO/MLO Level 4 Funding LLC Private Hard Money Lender Arizona Tel: (623) 582-4444 Texas Tel: (512) 516-1177 Dennis@level4funding.comhttp://www.Level4Funding.comNMLS 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.
Commercial Bridge Loan, Commercial Lenders, Hard Money Lenders
Dreaming of an Investment Property? Well, find out if a commercial
bridge loan is your dream come true or a nightmare.
In any industry things
can move quickly, commercial real estate or investment properties are no
different. Sometimes, it is your best interest to move quickly with a purchase.
For instance, say you are interested in a foreclosed property time is usually
of the essence i.e. you need to move quickly in order to purchase said property
before someone else does. This particular scenario is when most commercial
buyers consider applying for a commercial
bridge loans. Other instances
where many companies looking into bridge financing is when their current
mortgage is due and they have yet to find or rather secure a replacement
mortgage or if a company needs to cover shortfalls in regards to general
capital say for an upcoming balloon payment.
Before you consider a commercial mortgage, it is
important to know what you need to qualify for one. Lender requirements are
often just the beginning.
Commercial
Lending i.e. commercial
real estate loans. are nothing to sneeze at. In other words, you’d be
surprised how much of an impact commercial
bridge loans have on the overall financial future of companies.
Consequently, when it comes time to enter the vast world of non-residential
mortgages, it is extremely important to your eligibility. Of course, you may be
asking yourself, aren’t non-residential mortgages loans similar to most mortgage
loans? Well, obviously the answer to that question is no.
There are a multitude of commercial
real estate lenders. Are you sure you found the right loan for your
business venture?)
If you haven’t done
your research yet, it may behoove you to know that there are several different
types of commercial
real estate lenders. However, our focus will be on joint venture loans,
participating mortgages and your standard real estate purchase loans. These
particular commercial loans tend to be the most common choice when it comes to
business ventures. Thus, with that being said, let’s go over what each of these
loans can do for you and your next business venture.
For starters, a joint
venture loan is what you want when all parties (generally two partners) are
willing to share equally in the losses and profits of the property. Moreover,
this particular commercial loan is extremely beneficial to those parties that
cannot or may not be able to qualify for financing separately. A real estate
purchase loan, on the other hand, requires one party or rather one borrower
with excellent to near perfect credit along with the saving to back it up.
Additionally, when it comes to collateral, in general, lenders tend to expect
more with these purchase loans.
Lastly,
participating mortgages, in essence, are when your joint partner is actually
your lender. In other words, the lender receives the standard monthly payment
plus interest, but because the lender is also a partner they ultimately share
in the commercial property’s proceeds or income. This third option is
definitely something to look into if you have potential tenants with financial
stability and long-term goals.
Who are Commercial Hard Money Lenders and What do They Offer
You may be new to the commercial investment property business or
you may be a seasoned vet. Regardless of which category you fall under it never
hurt to consider all your lending options and be clear on what they all have to
offer.
Commercial
hard money lenders are generally
non-banking institutions i.e. private individuals or small groups that solely
provide fast financing for such individuals as house flippers, developers and
so on. Typically, most people that venture into the world of commercial real
estate and investment properties are familiar with the term hard money. But,
more than likely do not know exactly what a hard money loan is. This may sound
strange, but the fact is unless you are in the business of flipping houses or a
developer, hard money is a hard concept to follow.
In other words, you are
not alone when asking the question just who exactly needs hard money? Moreover,
how does hard money differ from standard financing? Well, the obvious answers are
listed above. But, the in-depth answers are that hard money is for individuals
who for a variety of reason cannot qualify or obtain conventional or rather
standard loans/ financing and hard money differs from standard financing
because there is simply less red tape.
All in all, this may
sound like these particular individuals have bad credit or are just from a bank
standpoint a bad investment, but the truth is this isn’t always the case. Nine
times out of ten, the people that need hard money are those that need to move
quickly on a property and often times need to borrow the full purchase price.
Consequently, these people are often far from a “bad investment” as most commercial
hard money lenderrequire their borrowers to back up hard money with
real assets i.e. the collateral and credit are often more than there. In
reality, it is often the banks that simply cannot move at the required speed
necessary to allow the borrower to make a profit
Private Money Lenders vs. Commercial Hard Money Lenders
We know that commercial
hard money lendersaren’t banks or other traditional institutions that
are in the business of loans, but are they private money lenders? Moreover, if
hard money lenders are not private money lenders, then you may just be asking
yourself, well who are they?)
There are often so many
interchangeable terms when it comes to the world of commercial lending that it
is easy to forget that not all interchangeable terms always mean the same
thing. For instance, it is not uncommon to hear the phrase private money
lenders and naturally think non-bank lenders. Moreover, when people think of commercial
hard money lender, they are also inclined to think non-bank lenders.
Are you confused yet? Well, it is okay if you are because you are definitely
not alone.
The reality is both
private money lenders and commercial
hard money lenders are traditionally not banks. But, that doesn’t mean
that both of these non-bank lenders are the same nor do they offer the same
loan options. So, now that that’s a little clearer, let’s go over just how
these two particular commercial money lenders are different.
For starters, you will
learn very quickly that hard money loans meet a very specific need. For
example, let’s say you are a house flipper or a commercial developer and you
need quick, short-term financing without a lot of red tape. These two instances
are generally when you want a hard money loan. In fact, these instances really
make up the bulk of hard money loans. Moreover, it is because of this fact that
hard money lenders appeal to a certain niche market. Private money lenders, on
the other hand, are more relationship-based and offer loans for real estate
transactions—plain and simple. In other words, there really are not any
specific scenarios where you absolutely need to contact a private money lender
to provide financing rather private money lenders are basically just another
non-bank financing outlet.
Pitfalls to Avoid with a Commercial Bridge Loan
In the fast pace world of commercial real estate and investment
properties, a commercial
bridge loan can be just the type of funding you need to keep your
investment plan running smoothly and many loan scammers are aware of that fact.
So, in order to avoid being scammed let’s go over a few red flags.)
If this is your first
time applying for a commercial
bridge loans, you may be surprised to know that you are actually not
alone. Up until recently, many people simply did not use bridge loans due to
the fact credit was once upon a time much easier to get. But, unfortunately, we
no longer live in a world where that is the case i.e. it is much harder to
obtain financing and even harder to maintain good credit.
Since bridge loans were
somewhat of a foreign concept until recently, many people simply do not
understand how they work, which means many do not know when they are actually
getting scammed. Clearly, this is one of the main reasons to do your homework
when it comes to applying for a commercial bridge loan. If you are like most
businesses, much of your financial future depends on not being a party to a
loan scam.
Typically, with a commercial
bridge loan, the most common pitfalls and scams are the bait-and-switch
loan scam, the upfront fee loan scam and of course the old-fashion identify
theft loan scam. Out of all three of these particular loan scams, the one you
time and time again is actually the upfront fee scam since actual lenders
generally charge an upfront fee. So, you may be asking yourself, if actual
lenders charge upfront fees how will you know if you are being scammed or not?
Well, the answer, of course, lies in the details—the actual details i.e. pay
attention to email addresses being spelled correctly and lender addresses.
Commercial Hard Money Lenders—Who are they for?
You hear it all the time—commercial
hard money lenders are here to help when traditional funding lenders
can’t. In many ways they do help, but generally, it’s the seasoned real estate
investors that benefit most.)
Commercial
hard money lenderare a great option when
looking for short-term financing and when you do not have the picture perfect
requirements (stellar business credit scores, excellent financial conditions
and so on) for traditional lending institutions such as banks or credit unions.
But, what nobody tells you is that commercial
hard money lenders are not for the timid or for the unseasoned real
estate investors that are new to the commercial investment game. Of course,
this fact doesn’t mean hard money itself is any more complicated than private
money or traditional funding (soft money); rather it just means that those who
have been in the business for a minute know the tricks that commercial lenders
like to play.
For instance,
commercial lenders are still in the business of making the most on their
investment. Thus, with hard money, these particular lenders aren’t afraid to
charge a higher interest rate. For those individuals that know hard money is
for moving quickly on a lucrative investment, these higher rates are not really
an issue. In other words, they see a great investment, they find a reputable
commercial investor and in less than a few business days the deal is done. With unseasoned real estate investors, you
need time to get your feet wet as well as time to weigh all the pros and
cons—this is, of course, perfectly okay and generally just the nature of the
beast. But, nevertheless, if you need extra time to make your move that’s still
extra time you are essentially sitting on a lucrative investment, which in the
long run generally means more costs and higher fees.
Similarly, if this is
your first or second time utilizing a commercial lender for a hard money loan,
you need to make sure that you have enough capital to pay back the loan and
that you are working with a reputable lender i.e. check their credentials.
These are generally things that a seasoned real estate investor can do
seamlessly. So, remember if you are new to the game, that’s okay, just make
sure you find the right lender, the best rate and move quickly on your
investment.
Why A Commercial Hard Money Lender May Be Right
For You
Ready to move on with business, but your
traditional bank loan officer may not be? A Commercial
Lenders may just be the right solution for you. Find out why this is the
real deal.
So, you’re
ready to move on with business, but in need of a timely loan? Let’s go as far
as to say that you’re ready to make your move and acquire that piece of
commercial real estate, and are hard-up for funding? The good news is that you
don’t have to be hard-up for hard money. A Commercial
Lender is a very viable, attainable option for you and here is why.
1) Commercial Lenders are able to provide
commercial hard money loans in a timely and efficient manner. They have the
depth of understanding that the time to act on your piece of potential real
estate is now, while others like yourself are competing with dueling bids. You
simply may not have time for the traditional bank loan application approval
process and funding that can sometimes take up to several weeks.
2) If you’re concerned about being denied a traditional bank loan or have
currently been denied one, Commercial Lenders
are likely more willing to work with you than other banking institutions. While
there are many reasons why you may have been denied a bank loan, a Commercial
Lender will often let your history of denial be just that, history.
They deal with you in the “here and now”–meaning, equity invested and will the
loan be repaid.
What Are Other Things To Consider When Contemplating Using A Commercial Lending?
You
understand that the commercial real estate opportunity of a lifetime could be
passing you by as you wait and wait for a potential bank loan approval and
related funding. In addition, you should know that Commercial
Lending aren’t what they used to be. They are on the up-and-up, helping
folks like you on a daily basis. Long gone are the days of risky loan practices
and extraordinary interest rates. Today’s Commercial
Lending wants to work with you and see that you succeed! Your success
is their success!
For A Successful Loan
And Funding Process,
Commercial Lending Is Something For You To
Research And Consider
At the end of the day, your goal to secure a potential commercial real
estate property is a loan. Because Commercial
Lenders are willing to work with you, focusing on the value of the
property and not on your history and credentials, researching and considering
this type of lender may be just right for you. You will stand a much better
chance of reaching your goal, so get started now!
Consequently, here is something you should definitely keep in mind when determining what kind of lender you should be working with. Above all else, it is important to note that residential hard money financing is appropriate in a variety of scenarios such as impaired credit, liens or judgments, time constraints, pending foreclosures and Foreign Nationals—just to name a few. Thus, if you are still interested in your residential hard money options, it helps to focus your lender search on niche lenders that can meet your needs (whatever they may be) and vice versus.
Dennis Dahlberg Broker/RI/CEO/MLO Level 4 Funding LLC Private Hard Money Lender Arizona Tel: (623) 582-4444 Texas Tel: (512) 516-1177 Dennis@level4funding.comhttp://www.Level4Funding.comNMLS 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.
By now, you know that if you are searching for a few reputable Residential Hard Money lendersthen you needed look any further than California. But, of course, if finding your next lender were as easy as picking the right state, there would not be much left to discuss—so let’s get down to your lender search basics.
When looking for residential hard money lender, especially in such key states as California, you will begin to see you have more than several options to choose from. Thus, it is at that moment, you need to be able to limit your options or rather narrow your focus. Sure, this may not be revolutionary advice, but there are still a few tips and pointers to go over for your search.
For instance, during your search for the best residential hard money lenders, you may feel like a pro when you pull up your Scotsman’s Hard Money Search Engine, but do you have your search criteria lined up and ready to go? In other words, it helps to truly think about what you are trying to accomplish with your hard money financing. In doing so, you will be able to definitively click on those advance search options. Moreover, in order to do so, you need to look at your borrowing situations. This means are you an owner-occupied borrower, a builder, an investor or a legal entity—just to name a few. You also need to be clear on your potential property type—not only does this matter in general; it will also help you find the right lender for your needs.
Furthermore, you need to clear on your loan characteristic, ideal loan terms, and potential LTV percentage. Your loan characteristic matter, here, because as you know hard money can be used for a few things such as bridge loans, standard purchases, refinancing, blanket loans and for business purposes. Therefore, in order to maximize your chances of finding the right lender and eventually securing that financing, it definitely helps to hammer all these things out before you start your cursory lender search.
How to Evaluate Potential Residential Hard Money Lenders
Now that you have mastered the necessary search criteria and compiled a list of your possible lenders, it is time to evaluate your top five. The good news is that hard money lenders of any kind still need to meet your own personal criteria. This means you should be comfortable with your potential lender’s expertise, their level of transparency and the speed at which they work. It also helps to double-check licenses (especially if you choose to find your top five lenders via Google) and look for niche lenders.
Your Eligibility
Ultimately, once you have decided firmly on your future hard money lender that offers residential financing, your focus needs to shift. In other words, it may be tempting to keep looking or have one foot out your lenders door, but you are only doing yourself a disservice. Remember, finding a lender is only half of the battle—the next step is working on your eligibility.
Dennis Dahlberg Broker/RI/CEO/MLO Level 4 Funding LLC Private Hard Money Lender Arizona Tel: (623) 582-4444 Texas Tel: (512) 516-1177 Dennis@level4funding.com http://www.Level4Funding.com 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.
There is all this talk of private money and hard money lenders, California based lenders—the list goes on. However, if you are like most people you are probably a little unsure about the basics, which is perfectly okay because you came to the right the place.
If you are just starting your investment project or commercial venture, then most likely you are looking for a quick and affordable loan. But, before you become all gung ho and commit to the first lender you find, it helps to know the difference between private and hard money lenders. Californialenders offer a wide range of private and hard money loan options, thus you need not look far for a reputable and accommodating lender. Instead, all you need to do is figure out which kind of financing is right for you.
Hard money, then, is typically the best option for resales and rehab investments. The reason being that hard money is at its cores is financing for asset-based endeavors. In other words, hard money is for commercial, industrial, residential (single-family and multi-family), and land. Private money, on the other hand, in essence, can be used for any purchase or investment project as a private money lender can be an individual or a company. Thus, you should ask yourself, what exactly you are trying to accomplish with this financing, especially when dealing with hard money lenders. California lenders that offer hard money financing are more than willing to lend a helping hand – pun intended. Therefore, it also helps to know what to look for in a hard money lender—if, in fact, you do decide to go with hard money financing.
With that being said, let us go over a few important things you should look for in a hard money lender. For instance, it almost goes without saying that, you should be looking at lenders that have a clear understanding of your particular business plan. This means doing a search for reputable lenders in your area and then doing some investigating to see if they offer niche programs that are applicable to you.
The Right Helping Hand Money Lenders California
Once you have narrowed your list of lenders, who understand your needs, the next step is to make sure your chosen few operate with a high level of transparency. This means that you, your lender and any other involved party should have access to your loan data, etc. Thus, if you come across a lender that is unwilling to be forthcoming with loan data or details—you should cross them off your list. Besides, a high level of transparency, it is also important to make sure your potential lender is licensed. Things to Consider
Other things to consider include your hard money needs (project, budget, unforeseen expenses, etc.) and each lender’s loan-to-value ratio/guidelines. Remember, not every hard money lender has the same ratio or guidelines. Moreover, it is imperative that you know what terms you are signing up for. Ultimately, once you have tackled all of these things, you will pretty much be on your way to securing that financing.
Dennis Dahlberg Broker/RI/CEO/MLO Level 4 Funding LLC Private Hard Money Lender Arizona Tel: (623) 582-4444 Texas Tel: (512) 516-1177 Dennis@level4funding.comhttp://www.Level4Funding.comNMLS 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.
Residential Hard Money lenders are often the helping hand that first time home buyers or first time developers need. Yet, many first time borrowers seem to be a little uneasy about what happens after they receive their hard money financing when they should not be; therefore, let us go over what happens after your lender approves you.
Despite, what most people think most residential hard money lenders want their borrowers to get approved and succeed. Thus, many residential hard money lender are often shocked when potential borrowers approach the situation in an adversarial manner. Your lender, in fact, is actually someone to keep in touch with throughout the entire approval process—so do not be shy.
After receiving your financing, you really do not have any time to waste wondering what your lender is or is not up to—you need to act quickly and move forward with your investment. Remember, you more than likely spent weeks doing your due diligence and research before deciding on a lender. Moreover, you took the time to go over everything in your loan agreement and spoke with an attorney, so now it is time to make your purchase. Of course, your purchase will include covering any closing costs or additional fees, but once again, you were clear on all of this because you choose a reputable lender who operates with a high level of transparency.
Therefore, you are on to the next step, which is insuring your property. Property insurance is often a must-have for hard money lenders, so if you do not know where to get the best deal then ask your lender for some assistance. If you do know where to get a decent deal on property insurance then secure your insurance. In other words, you do not have to wait for approval from your hard money lender on this—but they are here to help should you need it. After you are insured, really all that is left to do is follow your business plan and/or construction timeline.
So now that you know, your lender is truly here to help, let us go over how to manage your hard money loan. Unsurprisingly, any lender of hard money financing has an expectation of repayment. Moreover, lenders will expect you pay off your loan sooner rather than later (they also expect you make a lump sum payment with interest if you are flipping the property). This means having projections on when your residential property will become profitable so you and your lender have a better understanding of repayment timeframe. Clearly, with higher interest rates, you should also expect to pay off your loan quickly. This is why it is so important to review your loan terms and repayment options.
A True Helping Hand
Ultimately, residential hard money financing is always a viable option if you are prepared and are willing to work with your lender not against them. Thus, to recap, there is no need to look at your lender as the enemy if you have done your due diligence in selecting them. Lastly, the more prepared you for the lending process, the more streamlined the repayment process will be.
Dennis Dahlberg Broker/RI/CEO/MLO Level 4 Funding LLC Private Hard Money Lender Arizona Tel: (623) 582-4444 Texas Tel: (512) 516-1177 Dennis@level4funding.com http://www.Level4Funding.com 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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
The vast world of commercial real estate lenders is in for a few changes in the New Year. For many this may not come as surprise, but as a potential borrower or an investor, you are going to need to know how these pending changes and new trends will affect you. 
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Dennis Dahlberg Broker/RI/CEO/MLO 
Dennis Dahlberg
