You have located the property that seems undervalued. Now, how do you get a hard money loan approval to make your first project a reality?

Hard money loans are loans that are generally available from investors as opposed to banks. They are often used to finance real estate transactions, though businesses and those looking for bridge loans also turn to these types of lenders. If your credit score is not strong enough for you to get a loan from a bank, then this is the option for you. These can be used as “bridge” loans between construction and long-term loans. Others turn to hard money loans that they use for rehabbing projects before turning to long-term lenders that want a completed project or a fully leased project.

Some of the questions you should consider are:

1) Does the company you are considering doing business with have a legitimate web site as compared to the web sites that are designed to just gather names and pass it along to a third party.

2) Are there any lawsuits? Any forclosed properties? Are they in good standing with investors?

3) When considering a lender, what is their area of focus? What kind of project have they financed previously?

4) Is there a physical presence for the company, do they have someone you can talk to?

Hard money loans are designed for one to five years. At this time, you will need to refinance the loan or pay it off. Some lenders have the option to extend the loans for a period of time. Interest rates are higher than loans through banks, generally 10% to 20%. Hard money loans fund quickly, usually in as little as one week. This is much shorter when compared to conventional loans which can take up to 30 to 60 days for an approval.


The hard money loan is valued at the collateral value of the property not your credit score. Hard money loans are sometimes given to first time home buyers or to home owners that need a bridge loan so that they can buy the house of their dreams without having to wait for their first home to sell. Some hard money lenders fund 60%-70% of the after-repair-value(ARV). This leaves the remaining 30%-40% that you will need to fund. This generally refers to individual properties and not large commercial projects.

The lenders may ask for additional documents such as W-2s and bank statements. Protect yourself legally.

Most hard money lenders are not subject to government regulations. Have an attorney review all documents before you proceed and have an accountant review your projected cash flows. You should have all your documentation in a row such as the schedules and fees for the contractors and when and what they will be doing. Ultimately, you will need to repay the loan which usually occurs in 1 to 5 years. Have an exit strategy and know your lender. Many will consider extending a loan if you are having difficulty coming up with the final balloon payment. At Level 4 Funding, we’ve been in the business of hard money lending for decades and have a solid reputation behind us. Call us if you have any questions or concerns regarding this lending option.

Dennis Dahlberg
Level 4 Funding LLC  Private Hard Money Lender
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.

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