Not qualifying for a traditional loan from your local bank or credit union may send you to untraditional lenders. But, if you qualify, are they what’s best for you?
It’s a well-known fact that traditional lenders like banks have high expectations of their borrowers. They need to be reliable and have a solid financial history. This includes a great credit score and debt to income ratio. Not only that, but having thorough plans and research supporting your project is going to be of utmost importance. A history of successful fixer uppers is never a bad thing.
Still, the first step in success in the housing market is never easy. You will have to build good credit and, if seeking profits as a home renovator, gaining experience will only help build your portfolio and guide you through more successful fixer uppers. So, when is it time to turn to private lenders for your hard money loans? Is it ever a good time?
When Should You Turn to Hard Money Lenders?
The most common reasons people turn to Arizona Hard Money Lenders is speed and flexibility. Arizona Hard Money Lenders can begin the loan approval process sometimes as soon as the day of. If not, it can take as long as a week. That is short compared to banks and credit unions who can need as long as a month to get things going. In addition to speed, flexibility is another great offer. This refers to a few things, the first being approval. Private lenders who offer Texas Hard Money Loans focus on collateral. This means the project, the property’s potential, the plans and research. Private lenders want to invest in a project they believe in. While your financial history will come into account, it will not be the end all be all. Flexibility also refers to their individualism and transparency. For example, they generally will be direct with you if they do not believe in your project, and they will likely have no issue offering you an extension. Typically Texas Hard Money Loans are paid back within a year, but if your investor believes in your plans and projects, the extension can be made or an additional two to five years. If you turn to a hard money lender, it is because you need speed and flexibility. Cases like this are usually for fixer uppers and foreclosures, where the ability to obtain a property is the making or breaking point.
Should You Turn to Hard Money?
The question of whether or not you should turn to hard money depends solely on your situation. How fast do you need the money? Does your situation lend itself to hard money lenders? There are risks associated with hard money lenders. They require high interest rates, fees, and a short repayment period. Fixer uppers lend themselves to hard money because the goal is to renovate and sell quickly. Achieving this goal would help to ensure the loan is paid back timely. The costs of hard money may outweigh the costs depending on the stakes of your personal situation. If you have any questions about your private hard money lender, you can meet with a real estate attorney to go over the terms of your loan agreement so you feel confident in your decision, should you go forward with private hard money lenders.
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.