There are a plethora of benefits, for an investor, from a Arizona hard money loan. However, if you find yourself making mistakes during the submission process you can miss out on great properties by delaying your funds.
The most popular feature of hard money loans is the swift funding—you can get your money right away. Real estate investors use hard money loans to be competitive in the market. Unfortunately, many borrowers make common mistakes and lose great opportunities. It is imperative that you are aware of these mistakes to prevent a disaster from happening to you.
First and foremost make sure you are working with a reputable lender. Many mistakes can be avoided by working with an honest lender with a good reputation. Unfortunately, there are a lot of scam artists out there. Choosing the wrong lender can spell ultimate disaster for you. Make sure you research your lender. How long have they been in business? How many deals have they done in the last year? Are there good reviews for them on sites like Yelp? What are the payment plans that are available? Can they send you a proof of funds letter?
Once you find a lender you are comfortable with make sure you know how much to borrow. Hard money loans work differently than conventional loans from banks. With a bank loan you make a payment each month that counts towards both the money you owe and the accrued interest. With an Arizona hard money loan your monthly payments are interest only and the balloon payment is due at the end of the loan. So, make sure you don’t borrow more than you need because that money will be tacking on interest, as well. At the same time, you want to make sure you borrow enough. Not borrowing enough can slow down your project. Get estimates from your contractors and discuss loan amounts with your lender.
Make sure, once your contract is drawn, that you read the fine print. This is a financial document and needs to be taken with the utmost seriousness. You don’t want to be held accountable for things you weren’t aware of. For example, some lenders charge an outrageous late fee for the balloon payment—others charge a prepayment penalty. Make sure you understand everything before signing on the dotted line. A reputable lender will review the document with you and answer all questions you have. Be wary of lenders that rush you through the paperwork—that usually means they are hiding something in the fine print.
An in-depth research of lenders will only benefit your financial life. Finding an honest, reputable lender—that you can continue to work with—will not only make your project run smoothly, it will benefit you in future endeavors.
Unfortunately, there are some unethical lenders out there in the financial industry. Choosing the wrong lender can not only hurt your career, but leave you in a financial disaster. The right lender is the most important part of the real estate investing puzzle.
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.