Level 4 Funding Private Hard Money

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

About: 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.

Hard Money Lenders: Finding the Help That’s Right for You

October 21, 2019Uncategorizedbigdaddydennis

If you can seek out direct hard money lenders, do so.

You can seek out hard money lenders that offer you the

ability to write off interest payments on your taxes.

In short, the ideal hard money provider saves you money in the following ways:

• They don’t rip you off with hidden expenses (i.e., charging interest on money they haven’t given to you)

• They’re able to save you money because they can offer you a lower interest rate

• The interest on the loans they provide can be deducted from your taxes every year

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

Bridge Loans: Tactics to Increase Eligibility

October 20, 2019Uncategorizedbigdaddydennis

If you’ve had a difficult time securing financing for your next commercial investment property because the property is half-occupied or it is in decrepit condition, you should consider the benefits offered by bridge loans. Learn why this type of financing might be the help that’s right for you and some approaches to improve your eligibility.

Conventional lenders don’t like deserted or distressed properties. This isn’t the case with bridge lenders. Bridge lenders secure their loans based on a borrower’s experience and the potential of a property.

Bridge financing allows real estate investors to capture the long term and short term income potential of poorly-managed or distressed properties. Using bridge financing, an investor could purchase a half-occupied apartment complex, improve its condition, and increase occupancy. Once most of the units are occupied, the investor can then refinance to a conventional mortgage.

These loans also benefit developers who intend to resell distressed properties. The capital given by a bridge lender allows the investor to improve a property’s condition and then resell it for a tidy profit.

However, when it comes to bridge lenders, you need to do all in your power to prove the potential of your project and your experience as a developer.

Can you meet these basic eligibility standards when it comes to commercial bridge loans?

• Net Operating Income: The annual income of your intended property must be able to cover the cost of the loan on a yearly basis, so you need to have on-hand income and expense statements from the property’s current owner, as well as rent rolls and current lease agreements.

• Experience: Most of these loans exceed a million dollars, so not just anyone can qualify. You need to either have a resume on hand or be able to discuss your track record of previous real estate development projects.

• Savings: Having decent savings on hand is a must. Your lender will want assurance that you can carry your loan should things not go according to plan.

• Net Worth: Along those lines, your net worth should be at least equal to the amount of money you intend to borrow. Even if you aren’t pledging your personal property as collateral, these lenders want assurance that you have assets on hand to carry your loan if things go south.

• Credit: Credit is only a factor if you intend to refinance. If this is the case, generally a minimum credit score of 650 is needed to qualify.

But above all else, bridge lenders are concerned with one thing: your exit strategy.

When it comes to commercial bridge loans, talk up your exit strategy.

Bridge financing is just that: a bridge. It is designed to be paid back either through refinancing or resale, so being able to discuss your exit strategy is crucial. Consider the following talking points to assure your bridge lender about your exit strategy:

• If you plan to refinance: Talk up unrealized income potential. Half-occupied commercial properties suffer due to low cash flow, and this means conventional lenders refuse to finance such deals. Talk up your plan to improve cash flow from the property you want to invest in, and have a clear strategy to increase occupancy either by making specific improvements or through better property management. Having a specific plan along these lines will give your prospective lender confidence that you will be able to refinance before the loan comes due.

• If you plan to resell: In this case, a bridge lender will be interested in your plan to bring the property back to marketable condition. Have a clear budget and timeline specifying the improvements you want to make, and cite comparable sales to give your lender concrete assurance that the final resale value will pay back the outstanding loan.

Talking up your exit strategy with these tips and keeping the basic eligibility standards in mind will ensure that you can take advantage of the unrealized potential of neglected or distressed properties with the help of bridge financing.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

Loans for Flipping Houses: The Dangers of Hidden Costs

October 19, 2019Uncategorizedbigdaddydennis

Hard money lenders are the go-to source for financing when it comes to flipping houses. These lenders overlook the distressed condition of a property while giving loans as a percentage of a property’s potential value, but it is essential to carefully consider the cost structure of any hard money deal.

Some hard money deals are structured in two parts. The first portion of the loan secures the purchase of distressed property and the second portion of the loan covers the cost of renovations. The rehab portion of the loan is often distributed bit by bit as work proceeds, and this has important implications when it comes to the cost of hard money financing. The following examples will show why it is crucial to analyze the terms of any hard money deal.

In the first instance, our prospective house flipper goes to a hard money provider and proposes a two-month rehab project. The cost of closing on the ramshackle home will be $80,000, and the cost of renovations will amount to $30,000. Our first borrower takes out a loan for a total $110,000 with the rehab budget given out in two successive draws totaling $15,000 apiece. The lender offers a standard hard money interest rate of 14 percent. Work proceeds on the house things go smoothly, and our flipper resells his home earning a handsome profit of $55,320.

It seems like things worked out pretty well in this case, or did they?

You can save money by carefully considering the cost structure of hard money loans

Another flipper sees a similar property sale a block away from our first. She must have been spying on the first borrower because her proposed project is the exactly the same. The purchase price of the house is $80,000 and the rehab budget is $30,000. This borrower approaches a different hard money provider. They agree to a loan of $110,000 with a $30,000 rehab budget distributed over two draws at a 14 percent interest rate.

Suspicious glances are exchanged between the two investors as they pass each on the way to their respective work sites. Let us assume they finish work at the same time, and they resell their properties at the same sales price.

But, for some reason, our second flipper earned a profit of $56,020 while the first earned $55,320. Why? Because the second flipper carefully considered the terms of her deal. What was the critical detail in the term sheet the first flipper missed?

The first lender charged full interest on the total loan amount up front through the whole two month period, while the second lender only charged interest on the money as it was given out in draws. This tiny detail saved the second flipper $700.

Don’t make unnecessary interest payments on hard money loans

This hidden cost of hard money is something that is often overlooked, and it could cost you thousands in unnecessary interest payments. In the context of a house flip, $700 might be a small amount of money.

Let’s change the situation. What if our first house flipper’s project went on for 6 months and they had to pay that 14 percent interest rate on the full loan amount? They’d pay roughly five thousand additional dollars in unnecessary interest payments. In the context of a flip, $5,000 is a lot of money.

Don’t make interest payments on money you don’t have. Carefully analyze the cost structure of your hard money deal. If you don’t receive the full loan amount up front, ask your lender if they will charge you interest on the entire loan amount or just on the funds you’ve received from them. Analyze the terms of your hard money deal to avoid making unnecessary interest payments.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

Red Flags On Loans To Flip Houses in Arizona

October 18, 2019Uncategorizedbigdaddydennis

Sometimes it can be challenging to find a good deal on Loans To Flip Houses in Arizona. But if you find a deal that looks too good to be true then it probably is fraudulent.

Getting into the flipping business takes a lot of hard work, research and time as well as a good amount of cash or a reliable lender. When you are seeking a solid lender for Loans To Flip Houses in Arizona, it is important that you understand the terms of the loan and the red flags to avoid so that you don’t end up overpaying for your loan or getting scammed altogether.

Any legitimate lender is going to be will if not actually eager to disclose all of the loan terms upfront. This is simply a way for the lender to know that you are serious and to avoid wasting his or her time on a borrower who can’t afford the terms of the loan or one who is not willing to pay the fees for the loan. If you run across a lender who will not provide you with a complete list of terms and all costs in writing, then you should quickly find a new lending resource. A lender who is not willing to provide this information is likely to have hidden fees and a hidden agenda when it comes to your loan.

For a very similar reason, if your lender is not willing to provide you with a complete copy of your documentation prior to signing the agreement, then there are almost certainly hidden fees or terms included that will work against you. Loans To Flip Houses in Arizona are complex documents and unless you are familiar with the terminology and the legal ramifications of the loan documents, then you need to have a legal professional review the contract before you sign it.

Less Than Helpful Lenders

Any lender who is not responsive or who is difficult to contact during the application process is very likely going to act in the same manner after you sign the loan agreement. If you feel that you are not getting the customer service that you deserve, it is better to end the process and begin to work with a different lender who better meets your needs.

Follow Your Gut

Selecting a lender who will provide you with Loans To Flip Houses in Arizona is a big decision. If at any time during the process, you begin to feel uneasy, pressured or ignored by a potential lender, then you need to sever the relationship. Ideally, you will find a lender and continue to work with him or her for many years to come and on many deals. So be sure that you find one who is reliable, professional and above all, one who is honest and clearly has the integrity that you desire in a business partner. Invest the time in selecting a good lender and you will undoubtedly save yourself money over the course of your real estate investing career.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

Understanding Arizona Hard Money Loans

October 17, 2019Uncategorizedbigdaddydennis

Not all loans are perfect for every borrower’s needs. Understanding what Arizona Hard Money Loans are and how they are best used can offer you some unexpected benefits.

Many consumers are completely unaware of what Arizona Hard Money Loans are and how they can be beneficial. The misconception is that these loans are in some way less than legal is completely false. These are simply loans which are offered and funded by private lenders and not traditional mortgage companies or banks. And these lenders are providing the money not so much based on the borrower’s credit score but more on the value of the property being purchased. This is because the property is going to be the collateral for the loan. Arizona Hard Money Loans are sometimes referred to as asset-based loans as well.

There are a few benefits to Arizona Hard Money Loans being based on the value of the property. The first benefit is that the borrower can have less than perfect credit and still easily get approved for the loan. Most lenders would prefer to see a credit score of about 550 or more but each lender is free to decide who they are willing to lend money to. Also, by eliminating all of the background documentation and inquiry into a person’s financial history, the approval process can move much more quickly than a traditional loan. In addition, hard money lenders are free to tailor the terms of the loan to meet the needs of the borrower rather than forcing all borrowers to live within the same terms as banks often do.

All of these benefits make hard money a faster and simpler process when time is critical such as for the purchase of a fix and flip property. Finding a great deal on a property is not always easy and when an investor does, it is like to become a bidding war if he or she cannot get funded quickly to close the deal. In these cases, a flipper can turn to a hard money lender and have the deal done in as little as a week.

A Price To Pay

All of these great benefits are not free. Any loan will cost you money in the form of interest and other fees, but hard money is going to cost you a little more in interest than a traditional loan. Because most hard money deals represent a higher risk, the lender will ask for a higher interest rate to protect his or her interest in the deal. In addition, there could be fees or other terms of the loan that works to protect the lender’s investment.

Due Diligence

Because hard money lenders are private lenders, they are free to create the terms of their choice for any loans that they fund. For this reason, it is critical that you read the entire loan document and understand all of the terms of the loan prior to signing it. Even though the lender is private and not a bank, the loan agreement is a legally binding document and you will be required to follow any agreement that you sign.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

Types of Loans To Flip Houses in Arizona

October 16, 2019Uncategorizedbigdaddydennis

It is important to know that there are different types of loans available. And some Loans To Flip Houses in Arizona offer more benefits than others.

There are dozens of television shows which have popularized the concept of buying a house, making some repairs and renovations and then quickly reselling the home. The process is known in the real estate industry as flipping. And this process is making a lot of money for a lot of people. But there is more to this business than just buying low and selling high. It is critical that investors understand all of the nuances of using Loans To Flip Houses in Arizona.

There are four common Loans To Flip Houses in Arizona for the average investor. And in this case, average means an investor who is going to need to secure financing and does not have a pile of cash under the mattress. The first method is what almost everyone uses to finance a home, the traditional lenders. These are the mortgage companies and banks that everyone is familiar with. The biggest issue when using a traditional lender is the time involved. Just as the name implies, flipping is a fast process which relies on speed and efficiency to make the process profitable. And anyone who has ever applied for a traditional mortgage knows that the process is anything but fast.

The second method is to use personal credit such as the equity in your own home through a refinance or a home equity line of credit. The personal refi has the same issue as the traditional loan in that the time required does not fit the fast process of a flip. The home equity line is a better fit because you have instant and constant access to the fund. But you are essentially placing your own home at risk by using a HELCO.

Arizona Hard Money Loans To Flip Houses in Arizona

Hard money is a loan that is funded from a private lender rather than a bank or mortgage company. These loans are fast and relatively easy to secure as compared to a traditional loan. This makes Arizona Hard Money Loans the best choice for most real estate flip deals. The drawback on hard money is that the cost is higher than a traditional loan. But when time is critical, hard money is the way to go. Hard money is an asset-based loan so the application process is not as time-consuming or stressful as a traditional credit-based loan approval.

Evaluate Your Options

Even though Arizona Hard Money Loans are more costly than traditional loans, the fast turnaround time is often worth paying for. You could find a property, make an offer, get hard money and complete the refi and flip before a mortgage company would even get you an answer on your application. And the fact that Arizona Hard Money Loans are short term is also a benefit as you are not financing out for a number of years and paying interest for the entire time. There is also the option to use the equity in your home or a line of credit but beware of risking your home on the flip of another property.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

Tips for Getting Rental Property Loans in Arizona

October 15, 2019Uncategorizedbigdaddydennis

Rental properties are a great way to grow your wealth. But it can be difficult to secure Rental Property Loans in Arizona.

Home values are climbing which is great for anyone who wants to get into owning rental properties to increase their wealth. Many people are not looking to rent because they can no longer afford to purchase. So the rental market is strong and getting even better. But the housing collapse did have an adverse impact on the fast loans that many investors where using to buy rental properties. Now the best way to secure Rental Property Loans in Arizona is to know a few tips that the pros use.

Getting any loan is always easier if you are prepared to make a sizable down payment. In the past, putting 20% down was a big deal for most investors. But now with the tighter lending restrictions and qualification, 25% down or more is your best bet. Not only does this help to keep your payment lower, but it also will get you a better rate in most cases. So cash on hand can save you a lot in the long run.

Another important factor in getting approved for Rental Property Loans in Arizona is having great credit. Being a strong borrower will always get you the best rates and some other benefits as well. You might find that the processing of your loan request is not only faster but the process is less stressful as your credit does a lot of the talking for you. Lenders want to know that they are working with a serious professional who has a strong financial history and professional history.

Work With A Little Guy

Big banks are not going to be as impressed with high credit scores as a smaller bank or lender. Big banks are looking for big deals, so a rental property is not going to really get them excited. So unless you are buying an entire complex, check out smaller lenders who are willing to work for your business. They will often be more flexible simply because that is what they have to do to get customers. Big lenders make their money from corporations and huge businesses while smaller lenders, tiny local banks and savings and loans survive by doing business with local companies and individuals.

Be Creative

If you are finding it challenging to secure Rental Property Loans in Arizona, then get creative with your financing. The easiest way to finance a new rental property is to ask for seller financing. This is not always an option, but if you can find the right seller, then the financing could be fast and easy. Also, look at other personal sources that you might have. Using a personal home equity line of credit or even a personal loan could be a great way to make a fast purchase. Then you have the option to take some time and shop for a great rate to refinance. Using these tips can help you to secure your first few loans to begin a career as a rental property owner.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

Securing Your First Loans To Flip Houses in Arizona

October 14, 2019Uncategorizedbigdaddydennis

Becoming a real estate investor by flipping houses is a great way to start a new career. But you will need to understand some of your options to get your first Loans To Flip Houses in Arizona.

Entering the real estate industry is a great way to grow your personal wealth, be your own boss and have the opportunity for almost unlimited income if you are willing to work hard enough. But what stops many people is the challenge of securing the first few Loans To Flip Houses in Arizona. The old saying that you need money to make money could not be more true than in the flipping business. Getting the first few projects completed at a profit is what allows you to continue to make more purchases and more profit.

One method used by many homeowners who are interested in flipping is called cash-out refinancing. This process basically allows homeowners to use the equity in their personal home to finance their first flip. You will be refinancing your current home for a new mortgage which is greater than the amount that you currently owe on the home. Then you have the excess cash to uses to make the down payment on your flip property as well as any repairs or renovations that you are going to make.

Cash-out refinance Loans To Flip Houses in Arizona will require that you have a minimum credit score of around 650 and that your debt to income ratio is below 45%. It is also recommended that you have 30% to 40% equity in your home. If you meet these qualifications then you are certain to be able to get a much better interest rate on your refinance than you would be paying if you were to use a credit card or some type of personal loan to finance your first flip.

Added Costs

Because these Loans To Flip Houses in Arizona are a mortgage refinance, you will be paying some additional fees that you would not be facing if you were to use a personal loan or credit card. In most cases, you will be required to pay closing costs of anywhere from 3% to 6%. In addition, you could end up with a higher interest rate on the refinance than you had on your original mortgage so that could cost you more over the life of the loan.

Compare Total Cost

In the end, you are looking for the most affordable financing that you can find to begin your flipping business. So most new flippers will explore all of their options and compare the total cost of each lender and type of loan. Options such as Arizona Hard Money Loans and home equity loans or a home equity line of credit might be a better option for you, but you will only know once you have completed an exhaustive search of all of your options and then compared the total cost of each option. Getting the lowest cost on your first few loans could be the difference between making no profit and leaving the business or making a solid profit on each flip and growing your business.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

Requirements For Arizona Hard Money Loans

October 13, 2019Uncategorizedbigdaddydennis

Arizona Hard Money Loans are not the same as traditional bank loans. And because of that, the requirements for these loans are also quite different.

Arizona Hard Money Loans differ from traditional bank and mortgage company loans in many ways, so it only makes sense that the requirements for these loans would also focus on different criteria. But for many borrowers, it is the different qualifications that make hard money so appealing.

Borrowers who have no credit will have a very difficult time getting a loan from a traditional bank because the approval process is based on the applicant’s credit score. The bank feels that without a credit history and a strong credit score, the borrower represents too much of a risk and the bank will decline the loan application. But Arizona Hard Money Loans are asset-based, meaning that they are based on the value of the property being purchased more so than the borrower’s personal credit history. So a person with no credit history can still qualify for hard money.

Likewise, a person who has bad credit is also going to be denied by a bank or a mortgage company with applying for a loan. In some ways, having bad credit is worse than having no credit at all. But a hard money lender is normally willing to lend to a person who as a 550 credit score or better. What the hard money lender is looking for is proof that you have an income so that you can repay the loan that you are requesting.

Fix and Flips

If the borrower is going to use the hard money for a fix and flip project, the lender could also be interested in the experience level of the borrower. Fix and flip projects can be tricky and therefore represent a higher risk to the lender. Each lender is free to set his or her own requirements but most will want to see the records of a few successful projects before they are willing to loan hard money for fix and flip projects. There is an added risk with any property undergoing renovations as until the project is completed, the property value could actually drop and no longer be worth as much as the balance on the loan.

Down Payments

Because the loans are based on the value of the property being used as collateral, the lender wants to be assured that the property will always be worth more than the balance of the loan. This ensures that if the borrower defaults on the loan, then the lender can take possession of the property and sell it to recover his or her investment. For this to work in the lender’s favor, the borrower must often make a large down payment on the property. In some cases, the lender will require as much as 25% down to be certain that the property holds instant equity. Understanding the requirements of Arizona Hard Money Loans also helps to explain some of the benefits and drawbacks and how the loans can be best used.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177