Lots of people qualify for Arizona Hard Money Loans to buy homes and make repairs, but what if we told you there’s a way to qualify for more funding? You can, and it’s by knowing your after repair value (ARV).
Arizona Hard Money Loans, also called asset-based loans, are loans that are secured by a property. Many lenders will only give you around 65 percent of the total value of the given asset. In other words, a property appraised at $100,000 could secure a loan of $65,000.
However, this is where things can get hairy. An appraisal works if the house is in good condition, but what if your plan is to buy the house to renovate it and resell it? You wouldn’t be able to get the funding you need because the house’s appraisal will show what the house is worth before the rehab.
That’s where your after repair value comes in. If you can show the lender that the after repair value is much higher, you may be able to get more funding. So how do you do this?
Figuring Out Your After Repair Value
There are a few ways to zero in on a more accurate picture of your after repair value. First, gather all the relevant information — the square footage, the exterior condition and the basic specs of the house (bedrooms, bathrooms, special features). Now find 10 properties with similar features and of a similar size that sold in the last six months in the immediate area. It’s important that you find matching properties that are in good condition. Doing so will allow you to show the lender what the property’s potential is.
Of course, you should also use professional appraisers and have them give you an estimate for after the rehab is done on the house. Compare that estimate with your own experience in the business and bring that info to the hard money lender. Remember, you want to sell the lender on the potentiality (the future value) of the property. The more data you have to show this, the better your chances for securing more funding.
Getting a Arizona Hard Money Loan in Arizona with a Solid ARV
Once you’ve got your ARV — and all the convincing data to back it up — you can go to a hard money lender in Arizona to apply for a Arizona Hard Money Loan. If you’re thinking about getting one and have your ducks in a row, give us a call and see how we can turn your dreams into reality.
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.