As you most likely have figured out by now, if you’ve been in the real estate investment business for any length of time, Arizona Hard Money Loans are not a fit for all scenarios. However, for a variety of transaction types, real estate deals, loan scenarios, and investment strategies, a private hard money lender is considered the lender of choice.
One of these lending scenarios is the fix-and-flip investment model. You’ll find that banks tend to stand clear of fix-and-flip projects from simple single-family renovations to complex commercial property and apartment building rehabs. Banks generally prefer to fund non-speculative real estate investments, cash flow positive, and up to date properties. These projects have fewer variables, are less risky, and fall within the guide lines of the highly restrictive rules for bankers since the recession of 2008. For projects of 1 to 4 units, FHA insured loans are available. If the property needs major renovations, it is almost impossible to secure a conventional loan in order to have the funds to rehab the property.
Due to the major restrictive nature of the conventional mortgage industry, one of the most popular types of loans for the fix and flips are Arizona Hard Money Loans. Since these loans are more speculative and riskier, they turn out to be one of the most profitable loans for the real estate investor. This type of loan is often the only option for a fix and flip project.
On the other hand, traditional banks will usually be able to fund your rental properties. From 2 to 4 units to 5-plus units and commercial properties, all can be funded through conventional banks. If your project needs major repairs or renovations and if your project is well under market value, damaged or neglected, you will find it very hard to find funding from a conventional bank. If you’re looking to fund the fix up costs of a property that is “as is,” a hard money lender is definitely your best chance at success. Other properties that banks tend to shy away from are multi-unit rental properties that have been mismanaged and neglected. Many Colorado Hard Money Lenders will fund the acquisition as well as renovation of the assets.
If Your Deal Needs to Close Fast
Arizona Hard Money Loans have the reputation of the ability to close fast. On the other hand, banks are associated with red tape and a long list of required documents. There are even some Colorado Hard Money Lenders that offer no doc and low doc loan options. Texas Hard Money Lenders, 9 out of 10 times, will have the ability to close fast, in some cases as little as seven days.
Other reasons to us a Hard Money Lender are, Cash Out Refinancing, Bridge Loans or Provisional Financing, No Doc or Low Doc Loans, Maxed out Conventual Mortgages, Higher Leverage Investment Strategies, and Partnership Buyout or Takeover.
As in all cases, when obtaining a Arizona Hard Money Loan, conduct due diligence, find out the transactional costs, find out the lending limit and if the lender will be able to fund your project in the town that the project is located. Lastly, once you have gotten your loan, keep a good relationship with the hard money lender so you can use them for future projects at lower costs.
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.