Hard Money Lenders in Arizona are growing in popularity having sloughed off their old reputation of the “last-choice” lenders. There are specific properties and investment strategies that are ripe for hard money lending and opportunities when seasoned investors make these types of loans their first choice.
Previously, when someone heard the words, “Hard Money Loan in Arizona’s,” their first thoughts ran to some guy in a rain coat in a dark alley who was charging extremely high interest rates. If you didn’t repay the loan, you might just be met with broken knee caps, or worse. In years past, some borrowers, “bad apples,” used Hard Money Lenders in Arizona to offer loans on properties with the inevitable intent to foreclose. Luckily, in today’s market, these types of lenders do not exist. Still, a stigma is present even today.
Let’s unravel the myths in search of the truth. Hard Money Loan in Arizona’s are funded by private investors or a group of private investors forming a fund and secured by real estate. They are usually short term in nature. The Hard Money Loan in Arizona requires monthly payments of interest only or some principal and interest with a balloon payment at the end of the loan. The term of these loans are mostly 12 months with the possibility of extending the loan to 2 to 5 years.
A borrower may wish to borrow against property that he already owns or a property that the borrower wishes to acquire. Hard Money Lenders in Arizona base the loan on the value of the property to be pledged as collateral, whether one which the borrower owns or wishes to acquire. Multi-family residential, single-family residential, industrial and commercial lands are all types of properties that these types of lenders will loan on. Just like most industries, there are lenders that will specialize in one type of property. When starting to locate a hard money lender, ask them upfront what area of real estate they specialize in.
When is a Hard Money Loan in Arizona the Best Option?
There are several key factors that can help you determine if a Hard Money Loan in Arizona is right for you. If you have good credit, are prepared for a lengthy approval process, have a good income history, and have no history of foreclosure or short sale, then conventional financing though a bank may be the best avenue for you to take. If you are in a situation where you need to purchase a property in a short period of time and banks are not an option, then Hard Money Loan in Arizona are appropriate.
Some ideal situations for Hard Money Loan in Arizona are:
· Fix and Flips
· When you need to act quickly
· Loans to acquire land
· Construction loans in Arizona
· If the borrower has credit issues
From region to region and lender to lender, the interest rates charged will vary widely. In an area that has several Hard Money Lenders in Arizona than the chances are that your interest rates will be lower due to competition.
Conventional lenders take less risk than Hard Money Lenders in Arizona. While banks focus on credit scores, these lenders are more apt to look at your business plan and model. The range for interest rates varies from 10% to 15% depending on the risk and the lender. Expect to be charged points ranging from 2% – 4% of the total amount of the loan. At Level 4 Funding, interest rates start as low as 7.99% and are some of the lowest in the industry. Call us for a no-obligation quote.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
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 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.