Tag Archives: Arizona Home Loan – Vacation Time

3 Requirements to Succeed Using Hard Money Loans Arizona

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Understanding these three basic requirements of hard money loans Arizona will help to ensure that you can secure your loan. In addition, these tips will greatly improve your potential of success.

Real estate investors who are not familiar with hard money loans Arizona often have many questions about the process and how to best use a hard money loan to its fullest potential. The first question is always about the collateral required to secure a hard money loan. Borrowers want to know how much they can borrow and how that number is determined. All of this financial information is a huge part of the first requirement of hard money loans Arizona. Having a sufficient down payment is critical to securing a hard money loan. Lenders are only going to offer between 65% and 75% of the purchase price of the property. The borrower is required to provide the remaining 25% to 35% in the form of a down payment. This assures the lender that the property will almost always remain more valuable than the outstanding balance of the loan.

In addition to the cash to purchase the property, the lender is going to want verification that the borrower has the cash reserves necessary to pay the costs associated with owning the property such as the monthly payments, the taxes and insurance. If the property is in need of repairs or renovations, the lender might also want to see that the borrower has the means to make the needed repairs to protect the property value.

Be Prepared with a Detailed Plan

Real estate experience is also an important consideration prior to funding hard money loans Arizona. The lender is going to need to understand the borrower’s previous experience in real estate investing to know that they are a good investment. This experience can be demonstrated through past successful investments as well as a clear and detailed plan for the current project. Items such as a detailed timeline, tasks to be completed, comparable property pricing in the area and a plan for marketing and selling the completed property will all show the lender that this project has a great potential for success due to the experience and professional management of the borrower.

Professionalism=Success

As with any business deal, professionalism is going to be critical to the final success of the project. Not having a clearly defined plan and the money to act on the plan is a sure sign that the project is doomed even before it gets started. But having a plan and a detailed process outlined to achieve the goals will show potential lenders that you are experienced and well prepared to start and successfully finish this project. Not only will this preparation go a long way in helping you secure the hard money loan but it will also help to make the project run more smoothly and remain on budget and on time. The effort you invest before the project begins is equally as critical to its success as any time and effort you invest during the project.

Getting into Fix & Flips? Read This Appraiser’s Advice First

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When people hear about Level 4 Funding and the work we do, they often wonder exactly how people put hard money loans to use and create real value with them. Oftentimes, those we help work in the “fix-and-flip” business, rehabbing houses. Of course, the next flurry of questions usually surrounds who does that and how they make it work. We’ve been lucky enough to get a few professional home rehabbers to open up a bit about their work and are highlighting their stories. Jason Maze of Maze Enterprise and Amazing Appraisals was kind enough to give us some insights.

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Jason Began as an Appraiser

clip_image005Working in real estate appraisals, Jason routinely helps home buyers and sellers, as well as other parties such as lawyers and accountants, determine the value of a home. While this is often done in advance of a sale, appraisals are routinely performed anytime knowing the value of a property is beneficial, such as during a divorce or while handling estate planning. Over the years, he really got to know the numbers and specific areas. When the market crashed in 2008, he noticed an interesting trend. Canadians were heading into the area and buying en masse. “We can do that,” he decided. With his experience in value and his wife Jennifer’s lifelong affinity for design, the two ventured into the fix-and-flip business.

He Offers Some Tips for Those Getting into Home Rehabs

We asked Jason what advice he’d give someone who was considering getting into the business. “Go for it,” he says. “Make sure you have crunched your numbers. Buy low, sell low.” Although Jason may have the upper hand in valuation because he’s been in the field for decades and now does about ten flips per year on top of it, he says anyone can get a better idea of the numbers by hiring an appraiser before they purchase a property or prior to selling one.

There are Highs and Lows in the Fix-and-Flip Business

clip_image007So far, Jason says his and Jennifer’s most rewarding project has been a historic home. With Jennifer’s designs and Jason’s fiscal sense, the outcome was great. However, the icing on the cake was when HGTV contacted the couple and asked about airing it on a show. This particular property, aside from celebrity status, was a bit of a rarity for the duo, as they typically aim for “newer” homes, or those built in the 1970s through now. Jason says they “learned their lesson” about dealing with older homes the hard way by purchasing one sight unseen. When they finally got their hands on it, they realized it was built with mud and straw, then covered in plaster, as opposed to modern building materials. This, he adds, isn’t uncommon for the period. Many homes throughout the southwestern US, particularly in the Phoenix area, were built this way because it’s what the earliest residents had on hand and helped make the desert heat more bearable. Still, it was an unexpected surprise they had to overcome and added a few extra challenges to the rehab.

Jason and Jennifer Have Big Plans

Despite the occasional blip, the fix-and-flip business has been good to the Maze family. The pair does about two homes at a time, continuously adding to their impressive portfolio. This still allows plenty of time for Jason to grow his appraisal business. Jennifer, on the other hand, has been balancing managing the design of their rehab properties with a nursing career, which she may soon leave behind in favor of branching out on her own offering design services to others. Of course, the family is still allowing plenty of time for fun and new adventures together as well.

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Chat with Jason About Appraisals or Get Info on a Fix & Flip Loan

If you’d like to chat with Jason about his appraisal services, go to Amazing-Appraisals.com.

You can also visit Level4Funding.com to learn more about loans for your next fix-and-flip project and even begin the application process right on the site. We’ll be sharing more stories from home rehabbers like Jason too, so pop back in soon for the next installment.

 

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Office:  (623) 582-4444
dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

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How to Benefit From Hard Money Loans

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Though many borrowers are unfamiliar with the concept, hard money loans offer many benefits to certain borrowers. Understanding how these loans work can make them a great financial tool to have at your disposal.)

Hard money loans are simply short term loans which are secured by real estate. The loans are often referred to as non-conventional as they are provided by private lenders rather than traditional lenders or banks. Unlike the more traditional loans offered by banks, there are much less stringent requirements to qualify for these private loans. This is one of the main reasons that many borrowers elect to use a private lender and hard money.

As a rule, private hard money is seen as a faster and less difficult solution for many real estate investors. With less documentation required for the application, not only is this a less stressful process for the borrower but it is also faster for the lender. For these types of loans, the lender is primarily interested in the value of the property which is going to be used as the collateral on the loan and not the borrower’s financial health. So rather than spending days or weeks verifying credit history and credit reports, the lender is only seeking the current market value of that one property. If the loan amount is less than 70% of the property value then the lender is most likely ready to draw up the agreement and fund the loan.

Who Benefits from Hard Money Loans?

There are four main ways that hard money loans can be used to a great benefit for borrowers. The first is in the case of flippers. This is an investor who is buying a house that needs work and will be completing a renovation with the intent of selling the property for a profit and in a very short time. A private loan is much faster and easier for this process. Builders will also use this type of loan to purchase a lot to build on. Once the structure is complete, they sell it and pay off the private lender with the profit from the sale. Investors also favor a private loan when they are in need of funding very quickly. Opportunities can be very time sensitive and making the initial purchase using a private loan is much faster. Then the investor has the option of securing a traditional loan to lower their interest costs once they have ownership of the property.

A Final Benefactor

The last type of situation which can require a private loan of this nature is a person who has bad credit. There are occasions when a person has saved enough for the down payment on a property but is still unable to secure a traditional loan for the purchase. Their credit is too bad or they have no credit history. In this case, they can use the private lender to secure the property and then refinance later when they are able to qualify for a traditional loan. All of these situations are clearly good options to take advantage of an opportunity that would otherwise be lost.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Can you make money by investing in hard money loans?

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Consider using a deed of trust investment. A deed of trust investment allows you to earn steady returns and interest payments on the loans distributed by hard money lenders.

Deeds of trust may be an unfamiliar concept for many first-time real estate investors. A deed of trust is a promissory note in which a borrower promises to pay back the lender (i.e., you the investor). Your investment goes to the borrower in the form of a loan, and the borrower’s property acts as collateral in case of default. You earn both the interest payments and any portion of the principle the borrower manages to pay off throughout the term of the loan. Because a real property secures them, deeds trust are relatively safe and can offer steady returns to novice real estate investors.

Investing in a deed of trust is also a great way to diversify your portfolio. A deed of trust investment allows you to act as a passive owner and earn income from a property without owning it outright. You also save money because you will not need to purchase the entire property upfront and you avoid the hassle of maintaining the property yourself. Deeds of trust can also offer higher returns over an ordinary saving or an investment account.

Use a hard money lender to get the help you need when it comes to investing in deeds of trust

Trust deed investment companies (TDIC’s) connect investors with deeds of trust and usually known as “hard money” lenders. The loans issued by these groups are secured by the value of the “hard” asset which the borrower wants to finance. Often TDIC’s use deed of trust investments as a way to raise capital for the loans they issue to prospective borrowers.

Some may consider merely acting as private lenders on their own behalf. If you have the money and you want to earn interest, you could always lend the money yourself.

Working with a TDIC allows you to benefit from their knowledge and experience when it comes to the real estate market and the rules and regulations related to lending. The lender can underwrite the loan, take care of legal obstacles, perform the necessary due diligence and in some cases service the mortgage directly.

Level 4 Funding is an Arizona based hard money lender and can guide you through the process of investing in deeds of trust

Level 4 funding will perform the necessary due diligence on any deed of trust investment, ensuring any mortgage you invest in is of the highest quality. Level 4 funding differs from other TDIC’s. Because Level 4 has already issued any mortgage you invest in whereas competitors may need your investment to fully finance their loans. With Level 4 Funding you have added the safety of knowing that any loan invest in already has a steady payment history.

To qualify you will need to make a minimum investment of 50,000 dollars, and your investment cannot exceed 10 percent of your total net worth or annual income. For more information about a deed of trust investment at Level 4 funding click here.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Why There are Mixed Signals for Commercial Loans in 2018

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Many are optimistic for 2018 to be a great year when it comes to commercial loans, but others are also preparing for some bad financial scenarios to hit this year.

The multifamily market on the west coast could be a cause for some concern. Rental rates have increased, causing the market to be unsustainable. Also, there is stiff competition among lenders, which leads to many dealing with commercial loans to expect an intense 2018 among lenders.

Because of this tough competition, lenders are starting to take more risks by approving higher-risk commercial loans. And if the market takes a turn for the worse, this could put many lenders in a bind. Even though signs do point to a stable 2018, lenders should be prepared in case of a sharp turn.

But the majority in the industry think that momentum from 2017 will carry over into 2018. They also this that not only will there be stability, but that the commercial industry could even see a 5 percent increase.

Many are optimistic for 2018, but some of the issues could be the start of a downfall in the market.

The issues with stiff lender completion and increase in rental rates could be the start of the marketing taking a turn for the worse. It might take a couple of years, but the impact could start in 2018. Especially if the issues continue or if new issues come up.

Some bad signs are also hitting office properties and retail stores.

More people are starting to work from home, which is becoming a bad sign for office properties. With people using their home as their office, there is no need for office spaces, which is leading to a higher vacancy. Retail stores are also starting to lay off more employees, which is another bad sign. That means that they could be on their way to going out of business, leading to the vacancy of even more spaces.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Why Asking the Right Questions is Important While Finding the Right Hard Money Lender

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Working with the right hard money lenders is important on so many levels. Many things need to be considered like the location, property type and intended use for the loan. That is why choosing a lender that specializes in hard money is a good idea. Just make sure to ask the right questions to know you are choosing the right one.

A reputable lender will have no issues openly answering any questions that you have. Some questions that are commonly asked include, who decides approval of the loan? Is there any way I can speak directly with that person? Which law firm do you work with to document the information? Don’t be afraid to ask any questions that you may have.

Asking about providing references is also common and it is totally fine to ask for them or to even ask for examples of similar transactions that have financed or approved. Hard money lenders that shows signs of being reluctant to answering these questions or shows any hesitation, could be a red flag and should cause you to dig deeper to find out more information about the lender.

Feel free to ask about how they can work with you if you are unable to qualify for any conventional loans because of things like poor credit. Establishing a trusting relationship with your hard money lenders is going to help you in the long run. You always want to be upfront with your lender and feel comfortable talking about your finances and needs with them. In return, they should always be upfront with you as well.

Always discuss your plans for the future and what you are using the extra funds for.

The first thing to do is decide how you will use the funds and how you want to restructure repayments. Always be thorough with your research. Once you are able to find the right property you want to use your extra funds for, discuss all of these things and what you plan for the future with your lender. They should be involved in the process to help you make the best financial decisions for your plan.

Trusting your hard money lenders is one of the most important factors.

When working closely with anyone on your finances, you want to make sure you trust them completely. Finding a reliable lender will make you feel comfortable asking any questions that you may have and feel comfortable discussing all of your finances. Your lender should be open to answering any questions and should be as helpful as they can throughout the process.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
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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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial loans,commercial lending,commercial mortgage