Category Archives: Arizona hard money loan

ARE THERE LENDERS THAT WILL APPROVE A LOAN WITH ONLY 10% DOWN

iStock_000004311792XSmallWhat type of down payment do I need for a hard money loan?  Is a down payment required?

The answer is, no a down payment is not always required. However, there is a difference between needing your own money for a down payment and being prepared to use some of your own money towards your potential property. Certain lenders will require a certain percentage as a down payment— that percentage can be calculated from your credit score and/or your real estate investing experience. Don’t get nervous; Arizona hard money lenders are not as concerned about your credit as they are your hard assets. You DO NOT have to have perfect credit to be approved for a loan. Most Arizona hard money lenders will work with you if you have a FICO score of at least 550. However, depending on the lender, you may have to put a little more of your own money down. Lenders that require a down payment usually will ask for between 10%-20% down with decent credit and around 25%-30% for bad credit—remember this is SOME lenders.

The good news is there ARE lenders who will only require a 10% down payment (and you may find one that doesn’t require one at all—although, that may be prove to be a little more difficult). With only 10% down, you are looking at a lender that will fund your investment at 90%.

All lenders use a different underwriting process. Underwriting uses the criteria they gather from you to assess the lender’s risk. That criteria will determine if there is a down payment; or determine the total down payment. Regardless, of the process they use it will be a much more lenient process than a traditional bank loan.

Can I find an Arizona hard money lender that will fund 90% of my investment?

Absolutely! However, you will have to research for those lenders and find out their requirements. Arizona hard money lenders that ask for a down payment are doing so to lower their risk. Also, borrowers that have something to lose put extra effort into the project.

A lender may fund you 90%, leaving you with only 10% of the cash flow to produce. Keep in mind that many times a borrower may not have to put much money as a down payment, but will have a money gap. If there is a money gap you will need gap funding. Gap funding is the money needed to fund an endeavor that is not currently being provided by debt, cash or equity. Essentially, it’s a second mortgage on a fix-and-flip or rehab loan. You can get gap funding from a Arizona hard money lender, as well. Make sure when you meet with your lender you ask them about money gaps.

You can get into real estate investing with little or no money of your own.

It is possible to get a hard money loan with only 10% down. However, you must fully comprehend your circumstances and what tools will be necessary to make that happen. Find a lender that you feel comfortable with, set up a meeting, bring all your information and, most importantly, ask questions!


Dennis Dahlber Broker Ri CEO Level 4 Funding LLC Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC 
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
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.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Arizona Construction Loans: How to Risk Less by Avoiding Extension Fees

Brandon-Abney-Arizona-Home-Mortgage-FHA-Specialists-150x150If you are in the middle of building a house for yourself or you are in the middle of a renovation project, you need to know that with Arizona construction loans, there is an ugly little thing called extension fees. Learn why you want to avoid extension fees and some strategies to keep your project on track.

With construction projects, loans are distributed through a pay-as-you-go approach. You get a specific amount to pay for each step of the project, but you rarely get the full loan amount up-front. Most loans for residential construction projects last 12 months, but if your project stalls then extension fees come into play.

Extension fees are unfair in principle. You’re basically paying extra money to get access to money that is already yours in the first place. Yes, this practice may seem unjust, but these fees exist nonetheless, and it is in your best interest to learn how to avoid them.

The first way to avoid these fees is to scrutinize the terms of your loan and see if extension fees apply in your case. If they do apply, you need to plan your project carefully.

With Arizona Construction Loan, Extension Fees are a Danger you want to avoid.

Extension fees can eat away at your project’s budget.

If you can’t finish a project on time most often your lender is more than willing to extend the term of your loan. But they will likely charge you X amount of dollars each month until your project is finished. These fees are usually drawn from your remaining loan balance.

Slowly but surely these fees can eat away at your projects remaining budget. Month by month the money you have on hand to actually finish your project slowly withers away. In the worst-case scenario, you might not even have enough money to finish your project. So what are some tips to avoid this nightmare?

With an Arizona Construction Loan plan ahead to avoid the danger of extension fees.

First, you need to plan for the most common reasons any project gets delayed:

  • Permitting problems: Ponderous bureaucrats with clipboards can stall your project for several weeks. Do your best to ensure your property is up to code to avoid this situation.

  • Weather problems: Rain, mud and generally miserable weather can keep any work from getting down on your construction site. There is really no way to avoid this, except for ensuring that work is carried out during a generally favorable season.

  • Contractor issues: grumbling or lazy contractors may not finish the work you asked them to perform on time.  Only work with the most reputable contractors to ensure your project stays on schedule

  • Plan Revisions:  the other issues listed are generally beyond your control. But you can develop a clear plan and stick to it!

No doubt every project will have its delays, so you may want to have little extra money on hand to cover unforeseen costs. But above all, have a clear plan, swear by whatever you hold sacred not to divert from that plan and you can avoid extension fees.


Dennis Dahlber Broker Ri CEO Level 4 Funding LLC Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC 
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
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.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Arizona Hard Money Construction Loans: Is it the Help That’s Right For You?

page2-img2If you’re looking to finance a construction project, you may be wondering where to secure financing. If land in your area is scarce, if your planned development is something others consider a pipe dream or if your credit situation is less than ideal then you should consider the benefits of hard money Arizona construction loans.

Yes, traditional banks offer loans for construction projects. However, they avoid risk by applying a rigid bureaucratic checklist to see who qualifies. If you as a borrower don’t tick a box specific box, don’t expect your deal to close. Plus the terms of any agreement you strike with a conventional lender are likely to be as inflexible as the concrete foundations you intend to pour.

Hard money is different. This type of lender is usually an investor or group investors, who are not beholden to government regulations or typical bank bureaucracy. Hard money providers can look beyond a rigid checklist when it comes to you and your project. As investors, they are more interested in your projects potential instead of your credit score. Of course, this type of loan will cost you more than a conventional bank loan, but it offers many advantages.

Ask Yourself these Questions to determine if a Arizona Hard Money Construction Loan is the right help for your situation:

There are three basic questions to ask yourself to determine the right type of financing for your construction project:

  • When do you need the money?  Expect a traditional bank loan to close no sooner than 30 days, after, you have gone through the tedious rigmarole of completing their application process. In the case of hard money, most deals can close within days. This speed can allow you to secure the purchase of an attractive parcel of land before other developers.

  • How much flexibility do you need?  Banks have very rigid loan terms from which they will not divert. They have a one-size-fits-all approach when it comes to construction projects. If your proposed project is, say speculative, a traditional lender is not going to renegotiate the terms of your loan if you run into difficulties. Hard money offers more leeway to speculative developers who might need a bit of deference. As investors, hard money providers might be willing to tailor the terms of your loan and your repayment schedule to meet the needs of your unique project.

  • Can you qualify?  Once again banks have a one-size-fits-all approach when it comes to the type of borrower who is eligible for financing. If a particular aspect of your financial history doesn’t meet the bank’s criteria, you are out of luck. In the case of hard money, if your project has enough potential your personal financial situation is irrelevant.

Arizona Hard money construction loans benefit borrowers who need speed, flexibility or those who are in unique financial situations.

If you need to secure the purchase of a prime piece of land quickly, don’t wait around for a conventional bank, approach a hard money provider first. If your proposed construction project doesn’t exactly fit the mold, hard money providers can work out a deal which can meet your needs. If you have been turned down for conventional financing in the past, hard money can get your construction project off the drawing board and into reality.


Dennis Dahlber Broker Ri CEO Level 4 Funding LLC Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC 
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
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.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Tactics to Increase Eligibility with Arizona Hard Money Lenders

iStock_000004067318XSmallIf you intend to rehab single-family homes, you may be wondering what type of financing is right for you.  Consider the benefits of Arizona hard money lenders and learn some tips on how to qualify for this type of loan.

The great recession is a far distant memory. Home prices are on the rise, and this presents a significant opportunity for those who are in the flipping business. Zillow estimates that nationwide home prices will appreciate by 6.4 percent by the end of this year.

However ordinary banks are inconvenient, and the bank application process is certainly not going to keep pace with the overheated housing market.

To be sure conventional banks are lending again but only to the strongest of borrowers. At the very least, anyone who seeks financing from a brick-and-mortar bank should expect to have a credit score of 600. Furthermore, to get the best deal from a conventional lender you need to have a credit score within the range of 700+. So if your credit isn’ t in that range, going to conventional lender is essentially a waste of time.

If you aim to flip homes, even if you have stellar credit, the condition of the property you want to invest in will bar any chance that your loan application will be approved.

So where do you go for financing? Hard money providers.

Why are Arizona Hard Money Lenders the best lenders for House flips?

With hard money, there are no “boxes to check,” when it comes to the condition of the property being financed. In the case of hard money its the potential of the opportunity that counts. The application process typically comes down to an appraisal of the property in which you aim to invest. But above all your eligibility and the terms of your loan will come down to your ability to demonstrate the upside of your flipping project.

With hard money, to get the best deal, you need to do whatever is in your power to demonstrate the potential of your project.

You can increase your eligibility with Arizona hard money lenders with the following tactics
  • Have a sense of the numbers: Before approaching any hard money provider, you should have a clear financial plan when it comes to your specific project. These lenders give loans as a fixed percentage of the property’s value after repairs. Know the purchase price of your property, and have a clear budget for the particular renovations you want to make. These numbers will show you how much financing you need and how much profit your project will earn after resale. These numbers give your hard money provider concrete assurance that there is a real opportunity in your flipping project.

  • Cite relevant statistics:  Be able to talk about the specifics of your deal by pointing to relevant data concerning the local market.  Refer to similar investment properties, and know how much they re-sold for; use this knowledge and demonstrate your wherewithal to a potential lender and increase your chances of qualifying.

Using these strategies will help you prove the potential of your project to your prospective lender.

To truly take advantage of the overheated housing market, you need to avoid conventional banks. If you are in the flipping business, even if your credit score in the stratosphere, a conventional lender is unlikely to give your project a fair hearing because of the properties condition. Avoid all this hassle and see a hard money provider first.


Dennis Dahlber Broker Ri CEO Level 4 Funding LLC Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC 
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
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.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Spec Home Financing: Tactics to Increase Eligibility

p1_img2The continued recovery of the real-estate market may have you pondering the construction of a spec home. When it comes spec home financing learn some of the basics of how these deals are structured,  what a lender will expect from you and how you can increase your eligibility.

Spec home loans are used to construct homes before an actual buyer has been secured. You get a short-term loan to cover the cost of construction. After you finish construction, you either sell the house or refinance to pay the balance of the initial short-term loan. Naturally, when it comes to spec homes, there are a lot of risks involved.

First the lender has nothing to repossess if you default, expect a hole in the ground. Second you don’t even have a buyer in place. Your finished home might sit there for months on end, crumbling to dust and filling with cob-webs, all the while your loan goes unpaid and your lender is at a loss.

Considering all this risk what do you need to do to increase your eligibility?

Eligibility in the Case of Spec Home Financing Comes Down to how likely is it that the property will sell? How much equity does the borrower have in the deal?

In the first place, your lender will want to know the land you aim to purchase has access to roads and utilities. Obviously, your chance of qualifying will be made far more difficult if you intend to build a multiplex condo development in the middle of the woods.

A similar standard comes into play when it comes to your proposed project. A neoclassical surrealist home complete with faux-fur finishes is not going to qualify for financing. Your proposed home should appeal to the average buyer, which assures your lender that after construction is complete, someone will actually purchase your new home.

Also expect to make substantial down payment. The risk implied in these types of deals means few spec lenders are willing to offer more than 85% of projects projected value after completion, so you as a borrower should have the funds on hand to make up the difference.

Some lenders will also want to look into your savings in case your project runs into any unexpected difficulties. They may scrutinize your credit score, tax returns or other pertinent financial documents.

But above all, you need to prove your worth as a borrower when it comes to financing a spec home.

Try these tactics to increase your eligibility for Arizona spec home financing.

There’s obviously a lot of risk in these sorts of deals, and a lender will need a lot more assurance than just a credit score to approve your loan. Good credit or bad, there is no substitute for a compelling business plan. 

Have a very detailed plan with nearly every aspect of your project worked out ahead of time including blueprints, budgets, and precise timetables. Having a clear timeline of how your project will proceed is of vital importance. Your lender will want to know when your spec home will actually be finished, and when they can expect repayment.

Above all, you should be able to tell your lender the “story of your project.”  This story should not be make-believe and based purely on your own conjecture. Have a clear plan which should include projections of the profit that can be earned based on statistical evidence. Look at similar projects in the immediate area and know how much they sold for, this information can lend credence to your projected valuation.

In short, be sure that your proposed project is in line with the realities of the market. But above all have a clear plan. Use evidence to back up your projections. Employing these strategies will increase your eligibility for financing and help you get your spec home project off of the ground.

Dennis Dahlber Broker Ri CEO Level 4 Funding LLC Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC 
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
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.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Try These 5 Tips to Find the Perfect Private Money Lenders in Arizona

2page_img3-bigPrivate investors can begin to help you achieve your financial goals and get started with real estate investments. Know how to find the perfect lender for your situation with the assistance of this helpful guide.

Get started in the real estate world with the help of money lenders that can help you achieve your financial goals. A private investment opportunity can be perfect if you do not have La good credit score. How do you find the right lender for your situation? What is the best way to choose a lender in your area? These 5 strategies may help.

1. Pick loans from people you know already. When starting out, it probably may be challenging to find anybody willing to give you the funds you need to get started investing in the real estate market. Because of this, people who know you already may be your only choice. Network with people you already know to get started with real estate investing and flipping houses.

2. Build the network with more investors. Try to start getting involved with your local real estate investing community so that you can build worthwhile connections that may lead to other investments. As this continues, you can meet new people and start to lead to new investment opportunities. Networking will allow more people to get the chance to know you.

3. Have the chance to begin to work your way towards more hard money lenders that can open more doors for you. This means that you will have to the opportunity to be able to begin borrowing from lenders of hard money. Typically, these lenders are experts in the types of loans that are necessary for flipping housing and other investments, and they operate much differently than traditional banks.

4. Choose someone that is able to act quickly and be fast closing. Pick a private lender and establish a good relationship with them so that you can receive your funds quickly.

5. Check their history. Choose a lending opportunity that has proof of positive results in the past so that you can get a better idea of what you are getting yourself into.

Take the Risk and Network with Private Money Lenders in Arizona Now

Acquiring loans from private lenders can take many of the problems out of real estate investment. The main drawback of these types of loans is their cost, but the goal of these loans is use them strategically. Private loans in Arizona can appear from anywhere, so it is important to find the right lender for your situation.

Arizona Private lenders can help you avoid the red tape and dotted lines that come with choosing brokers from a traditional bank setting so that you can invest regardless of your credit history or financial status.

Are you trying to get started flipping with no money? Until you have at least gotten few successful projects under your belt, most lenders are going to want some equity. This investment is well worth it in the long run.


Dennis Dahlber Broker Ri CEO Level 4 Funding LLC Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC 
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
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.

© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Phoenix Fix and Flip Loans: How to use Crowdfunding to Invest and Make Money

4page_img5-bigYou don’t need to be an active house flipper to make money from flipping projects.  You can avoid all the hassle of these projects and still earn a profit by financing fix and flip loans through online crowdfunding platforms. Learn some of the basics about what you should look for in these deals and some basic strategies to find the best way to invest in these types of loans.

Crowdfunding remains the most accessible way for individual investors to earn money from house flips without actually carrying out the renovations themselves. Crowdfunding usually takes place on an online platform and relies on you (the individual investor), to finance the loans listed on the site. These loans are then given out to active house flippers.

However, there some fundamental things you should look into before investing in these loans.

Expectations before investing in Arizona Fix-n-Flip Loans

Before investing in any loan, consider the platform, or the website on which you aim to make your investment. Be wary of crowdfunding sites that claim to charge absolutely no fees. In almost every case this is too good to be true. In general, these websites will charge you a percentage of the income you earn either on an annual or a regular basis. Obviously, you want to make your investment on the crowdfunding website that charges the lowest possible fees.

Consider the type of flip you are investing in, is the project a residential or commercial flip?  Residential flips offer a smaller return over a shorter period, while commercial flips provide a potentially larger return over a longer period. So consider how quickly, and how much, of a return, you want from your investment.

Consider the borrowers details, ideally you want to someone with prior experience and a proven track record of successful projects.  Also, do your best to understand the conditions of the surrounding market to get a sense of the project’s potential. Developing an understanding of an individual borrower and their project might put your mind at ease.

Ideally,  you also want to invest in loans in which the borrower has signed a personal guarantee, as this will indicate they have some personal stake in their project.

After you find the right loan, there are two ways to actually invest.

When it comes to investing in Arizona fix-n-flip loans, you risk less as a debt partner, but you can make more money by acting as an equity partner

When it comes to investing in these types of loans, you can choose to act as a “debt” or “equity” partner.  Acting as a debt partner allows you get regular interest payments throughout the term of the loan. Most crowdfunded fix and flip loans, have terms of 36 months and charge interest rates of 8 to 14%. You earn these interest payments on a regular monthly basis, and once the term of the loan expires, you receive the remaining interest and principal.

Acting as an equity partner gives you a share of ownership in the property.  In this case, once the flipped property is sold you earn a specific percentage of the profits earned by the borrower. The potential returns from an equity partnership can be far greater; however, there is more risk in this case. It’s uncertain how much profit a flip will earn until the renovations are finished and the property is actually resold.

In short, crowdfunding presents the opportunity to earn money from house flipping without actually flipping homes yourself. Consider the platform, type of project and borrower you want to invest in and whether or not you want to act as a debt or equity partner.

Dennis DahlbeDennis Dahlber Broker Ri CEO Level 4 Funding LLCrg
Broker/RI/CEO/MLO
Level 4 Funding LLC 
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
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.© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

Private vs. Hard money lenders: The Differences

page3-img2You may wish to finance your next investment property, but find yourself a bit confused about the differences between private and Phoenix hard money lenders. This article will attempt to clear up some of this confusion and some common misconceptions, so you can get a clear perspective and find the help thats right for you.

Some consider private money and hard money lenders essentially the same thing.  But there are a few fundamental differences you of which you should be aware. It all comes down to the criteria these lenders use to evaluate borrowers, and these considerations can impact the type of deal you can secure.

The main difference between these two types of lenders is how they evaluate individual borrowers. Private lenders might consider all three C’s of lending (credit, capacity, and collateral).  Hard money providers generally only consider the value of the collateral on offer.

Therefore, private lenders may put scrutiny on aspects of your financial history such as your credit score. A private lender may also want to get a sense of your capacity or your ability to repay your loan. They might look into your financial history to ensure your income is sufficient to carry your current debts, usually  this measurement is expressed as a debt to income ratio (DTI). If your credit score or DTI doesn’t meet the private lender’s criteria, you may not qualify.

In contrast, hard money providers mainly look at the value of the collateral on offer, i.e., the value or potential value of the property you aim to finance. However because collateral is the primary consideration in the case of hard money there are some misconceptions when it comes to this type of lending.

The main complaint about Phoenix hard money lenders is that they are less willing to work with borrowers

Because hard money providers mainly look at the collateral offered by the borrower, they assume a higher risk. Because of this assumed risk hard money is often more expensive than private money. 

However, some assume that hard money providers are less flexible than their private counterparts. Because this type of lender only looks at collateral, they might have less confidence in a borrowers ability to repay. Therefore, if a  borrower meets turbulent fiscal headwinds, many assume it’s in a hard money providers best interest to foreclose on the property and resell it at a profit.

But this is a flawed assumption; because any reputable lender wants their borrower to succeed.

Foreclosure is a hassle, and no one wants to deal with it. So don’t assume your hard money provider won’t work with you if you run into financial difficulties.

Arizona Private Money Lenders may offer a better deal, but fewer borrowers may be eligible.

Going the private money route can result in a better deal.  Because most private money providers look into your credit and your capacity to repay,  and therefore they have more confidence in you as a borrower.

This confidence on the part of the private lender could give you the leverage to negotiate a better deal.

While private money may potentially be cheaper,  it may also be less convenient. You may not qualify according to the standards of an individual lender. In addition, underwriting your loan could take a long time, and this application process could cause you to miss out on your investment opportunity.

But there are no hard and fast rules in the case of either private money or hard money, as every individual lender is different.

Just know that the primary difference is that private lenders may consider( may being the operative word here), all three C’s of lending before approving an application, while hard money providers only consider the collateral on offer.

Private lenders might be able to offer cheaper loans, but the application process might also be less convenient when compared with their hard money counterparts. It is a catch 22. Private money might be less expensive but also less convenient. Hard money might be more convenient but it also might be more expensive. 

However, don’t make assumptions, every private or hard money lender is different. Ask any lender you approach about how they evaluate individual borrowers to see what type of deal you might be able to negotiate.

Dennis DahlbeDennis Dahlber Broker Ri CEO Level 4 Funding LLCrg
Broker/RI/CEO/MLO
Level 4 Funding LLC 
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
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.© 2016 Level 4 Funding LLC. All Rights Reserved.
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Phoenix Fix and Flip Loans: How to Make Money in Apartments

iStock_000002512608_ExtraSmall copy point calyx 9When it comes to fix and flip loans and apartments you need to have a strategy to pay off the loan as soon as possible. The following article will tell you where to find the best deals, how to value apartments and how you can use simple income boosting strategies, to maximize the value of your apartment property, quickly earn a profit and pay off the balance of your loan.

Before you take out a loan to flip an apartment, you need to find the right property.

Finding apartment properties to flip is a bit tricky, as most apartment buildings are sold off-market. Landlords don’t want to alert tenants to possible changes in ownership, and so they avoid listing their properties outright. So to find apartment properties with the most potential you need to get in touch with local real estate brokers, who can give you a sense of which properties are available.

After finding a potential property to flip, consider the following:

• Is the property is in an exceptionally dilapidated condition: Is there an immediate need for physical improvements, If you can, then make these improvements, and you can quickly boost the properties value and resell it at a profit.

• Consider outside factors that could increase the property’s value in the near-term:  Are new public amenities like hospitals and schools about to be constructed nearby? If the answer is yes, then you may not need to spend any money to see the properties value appreciate.

With Phoenix fix and flip loans and apartments evaluate each deal based on the income potential of the property

The main difference between flipping apartments versus single-family homes is a matter of valuation.  Residential properties are valued based on comparable sales, which limits the potential returns from residential flips. With commercial properties, I.e., apartments, the income generated by the property determines its value. Therefore the potential returns from an apartment renovation can be enormous, depending on how much you can raise the amount of income generated by the property.

When it comes to valuing apartment buildings, the value is usually set based on the market cap rate (annual income/ fair market price) divided by the overall annual revenue generated by the property.

So if your apartment earns 120,000 dollars in income annually and the prevailing cap rate is 5 percent= 120,000/.05= 2.4 million dollars.

This nuances of this valuation process are beyond the scope of this article.

However before taking out any loan you need to have a strategy in place to pay it off quickly. You also want to earn a profit by causing the value of the property to appreciate as quickly as possible. So when it comes to apartments, what’s the fastest way to raise a properties value? Raise rents.

With fix and flip loans and apartments your best bet is raising rents which present a low cost way to boost value and pay back your loan quickly.

With any flipping project, you need a short-term strategy to boost a properties value,  to pay off your loan and earn a profit as quickly as possible. When it comes to apartment flips the best way to boost value is to raise rents. 

Obviously can be amoral or unethical about this, the improvements you make should justify any rent increases. However, in some cases you can still raise rents without paying for any improvements at all. If a property is charging rents that are exceptionally low, you can raise rents to a reasonable standard and quickly earn a profit.

Even a small increase in rent can dramatically boost the value of an apartment building.  Consider the first example where the property was valued at 2.4 million dollars

• 120,000 (annual income) /.05 (cap-rate)= 2.4 million dollars.

This property is a 20 unit building, and each unit brings in 500 dollars in rent per month. If you were to raise rents by 50 dollars the property will earn 1,000 dollars of additional income per month, or 12,000 in extra annual revenue.

While this might not seem like a lot, this small increase in rent, based on a 5 percent cap rate, equates to a new valuation of:

• 120+12=132,000 (annual income)/.05 (cap-rate)= 2.64 million dollars.

So in this case that extra 12,000 dollars in income resulted in a 240,000 dollar increase in the properties value. As you can see, the sky is the limit when it comes to apartment flips. But of course there is math and then there is reality. So things wont always work out according to plan.

Nevertheless, before taking out a loan on an apartment property, find a reputable real estate broker and look for properties with:

• Easy low cost fixes that could raise value,

• Properties where new public amenities are being constructed which will increase the value of the property without any cost to you, and above all,

• Look for properties that are charging below market rents.

Raising exceptionally low rents to a reasonable standard is the fastest, and cheapest way to quickly raise the value of an apartment, allowing you to pay back your loan and earn a profit in the shortest possible amount of time.

Dennis DahlbeDennis Dahlber Broker Ri CEO Level 4 Funding LLCrg
Broker/RI/CEO/MLO
Level 4 Funding LLC 
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
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.© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions

House Flipping Loans: Is Local Private Money the Right Help For You?

635967198When it comes to house flipping loans and private money you need to first understand what private money actually is and where it can be found. Learn some basic strategies to find the help that’s right for you

Private money is a vague term, but it refers to any private group or individual with enough capital to lend. So where you should you look for this type of lender?

You might begin your search online, where you will likely find many “private lenders,” but most of these are really hard money providers. Its difficult to pin down what exactly private money is, especially when compared to “hard money.”  In truth, the differences are insubstantial, financing is financing after all.

The only real difference between private hard money that you should be aware of is that hard money often entails higher interest payments when compared with private. Hard money providers usually charge between 12 to 15%, while private lenders typically charge between 8 and 12%.

However truly private lenders are usually individuals that can offer far more flexible loan terms in comparison with other types of financing providers.

If you look online you likely wont find a truly “private lender,” that offers this type of flexibility, so then where should you begin your search?

When it comes to Arizona Private Money Lenders, the best way to find the right help for you and your deal is to ask around.

The best way to come in contact with private money providers is to attend real estate networking events.  At such events talk to other house flippers to get a sense of their experience with various local private lenders.  You should ask questions like how quickly were their loans funded? What were the specific terms of their deal? And how willing was the lender to negotiate these terms with them?

Above all, you want to find a lender that is willing to negotiate. Because when it comes to private money you want to take advantage of flexibility this type of financing offers.

When it comes to truly Arizona Private Money Lenders, if you can do your best to secure an equity partnership which can help you avoid the expense of carrying a loan.

You might not even have to make any payments on your loan if your private lender chooses to act as an equity partner in your project. In this case, the proceeds of your resale will pay off the remaining loan balance, while your lender receives a share of the profits you earn.

To negotiate this type of deal, you’ll probably need to find a truly private lender. Hard money is a great financing option in the case of flipping projects, but these are lenders, not investors, and they will give you a loan which you will have to pay back with interest.

If you want to find a true private investor for your next project you should avoid beginning your search online. Perform your due diligence by asking your fellow real estate developers about their experience with local private lenders. Once you find a lender that has a good reputation, see how much room there is to negotiate. If you can try to arrange an equity partnership with them which will help you avoid the expense of carrying a loan.

Dennis DahlbeDennis Dahlber Broker Ri CEO Level 4 Funding LLCrg
Broker/RI/CEO/MLO
Level 4 Funding LLC 
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
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.© 2016 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions