By now, you more than likely know that just about every kind of real estate or property deal can utilize hard money loans. California based lenders that offer hard money financing, moreover, are more than willing to work with borrowers to ensure that whatever the goal is, there is proper financing.

Hard money, in many ways, is looked at as the saving grace of the lending industry. Of course, that is not to say that many people do not harbor some animosity towards hard money loans. California lenders, nevertheless, want borrowers to know that despite the disadvantages hard money financing can still be the helping hand you need.

For instance, if you are looking for commercial property financing or residential financing, you definitely can use utilize hard money loans. California lenders, in fact, offer a variety of niche programs within both categories. Ultimately, these sub-categories will allow all kinds of real estate deals to happen that normally would not if the borrower went with a traditional lending institution. Moreover, you can utilize hard money financing for land deals and new construction, which just goes to show the versatility of hard money financing programs.

Nevertheless, it is important to note that just because hard money financing can be used for a multitude of projects and real estate deals does not mean it is always the best choice. In other words, there are specific scenarios in which hard money is the best possible choice. For example, you more than likely are aware that fixing and flipping houses is a lucrative business that involves the need for quick and short-term financing. Thus, it should be no surprise that one of the best time to use hard money financing is in such situations where financing is needed fast. This is also the reason that hard money financing is great for construction loans or renovation projects.

How to Evaluate your Eligibility

When dealing with hard money financing, your lender is most concerned about the collateral you are providing. Typically, your collateral is the equity in your property. Thus, in order to evaluate your eligibility, you need to understand the value in your soon-to-be-purchased property or land. If you are looking for additional funds to upgrade a property then you need to know the projected added-value of the property upon completion. It is also important to keep in that your eligibility can be affected by your intended purpose for the property, as most lenders understand that your ability to pay back your loan is often based on what you plan to do with said property. Lastly, it helps to work with the right lender for your particular venture or project; by doing so, you will be to ensure that your vision is understood and thus more likely to be given the greenlight.

Quick Note on the Pitfalls

As briefly mentioned, there are disadvantages to hard money financing such as the higher interest rates and the shorter loan terms. But, if you choose your venture or next home wisely, these pitfalls should not deter you from utilizing this particular kind of financing.

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
 

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.









          

Securing financing can be difficult, especially if you are in the market for owner occupied hard money loans. California lenders, much like other lenders, are not necessarily quick to offer owner- occupied financing but that does not mean you don’t have any options.


If you have been in the real estate investment business for some time, you are probably well aware that it is not easy to secure owner-occupied hard money loans. California lenders who offer hard money financing often shy away from the additional regulations or red tape that is placed on owner- occupied properties. However, the good news is not all California lenders fear the challenge.

The reality is that some lenders have the impression that due to the additional regulations it is almost illegal to offer these particular types of hard money loans. California being almost the mecca of lenders it seems that there would be more clarity on the subject here. But, the truth is that many lenders are still in the dark about owner occupied property regulations and hard money. So, at this point, you are probably wondering what the deal is? Can you secure hard money financing for owner-occupied properties or not?

Well, unsurprisingly, the answer is a little complex. Nevertheless, it is important to highlight the fact that owner occupied properties secured via hard money is perfectly legal. The difficulty here lies in the overwhelming misconceptions about owner-occupied lending laws. Moreover, for most lenders, it boils downs to the limitations placed on them in terms of fees and so on. Thus, lenders shy away. But, what does that mean for you? It means that you need to do your due diligence and find a lender that understand your vision, the lending laws and is willing to do the work with the regulations. This may seem like a tall order, but no one ever said getting what you want would be easy.

Additional Regulations
In addition to having a limit to the fee amount that can be charged, owner occupied loans also come with a few more requirements. For instance, a borrow income has to be verified via a third party source. Moreover, if the loan falls under the high-cost loan category then hazard insurance along with property taxes needs to be collected via an impound account for the first year. Along those same lines, a high-cost loan can also mean prepayment penalties are an issue for the lender. In fact, lenders must offer loan option that does not have prepayment penalties in this event. There are also similar disclosure regulations and requirements that one would typically see with bank or traditional lending institution loans.

The real deal
Ultimately, these are the main regulations that cause many lenders to not offer owner-occupied hard money financing. But, as you can see, these regulations and requirements are not necessarily the end of the world. Therefore, if you are in the market for this particular kind of financing, do not be deterred by lenders who are unwilling to abide by these requirements.

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
  






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.









          

If you are like many first time buyers, you are probably looking for that dream home with not so great credit, which can definitely be a stumbling block. Of course, if you are a savvy first-time buyer you may be wondering about the world of hard money loans, California especially.


When setting out to buy a new home or rather your first you may feel lost when it comes to the lending process, specifically when researching hard money loans. California lenders of hard money often work with a standard borrower base, which can also be misleading. For instance, if you choose to fix and flip a house, start a business, have a construction project or are looking own a multi-family property then hard money is often the solution.

But, you are a first-time home buyer looking for a place to live and settle down in, thus, you may be thinking that you can’t benefit from hard money loans. California lender, however, will tell you otherwise. The truth is you can, as a first-time home buyer, benefit from hard money financing. You do, however, need to know how hard money works in your particular situation.

For instance, hard money financing is great for short time financing and you can typically expect about somewhere around 65% of the value of the home you are trying to purchase. So what does that mean for you? Well, if you have turned to hard money financing because of not-so-stellar credit then hard money is an opportunity for you to improve your credit and still get your dream home. Think about it this way, hard money financing generally needs to be paid back within six months to a year, therefore, you have six months to a year to raise your credit score and find long-term financing.

Your Win-Win Solution
Sure, you may be wondering how hard money financing under these limitations is truly a win-win solution. Well, the reality is hard money financing is most borrowers last resort for a variety of pertinent reasons—some good and some bad. Thus, if you absolutely need that home right now and have a solid plan of how to improve your credit score while finding long-term financing then what is stopping you. Remember, real estate professionals use hard money financing as a stepping stone all the time so you can too.

Small Piece of Advice
Nevertheless, before you go looking for lenders that offer hard money financing, it is important to remember that nothing comes easy or in this case cheap. Your hard money financing is short-term financing for a reason—there are fees, interest rates and more that making finding long-term financing an absolute must. In other words, you may have literally got your foot in the door, but you need to make sure that you move quickly in order to keep your cost down. Lastly, you will need to have that remaining 35% for purchasing your home. Therefore, you need to think long and hard about how quickly you need to move on purchasing that dream home.

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
  






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.









          

Doing your research on obtaining financing is a slow moving process, especially when researching hard money loans. California based lenders, however, are not afraid of you doing your due diligence thus they have clearly laid out the pros and cons of securing hard money financing.


If you are not new to the world of hard money financing, you more than likely feel like you are well versed in hard money loans. California lenders of hard money, however, are not your everyday lenders. In other words, each lender who offers hard money financing offers something a little bit different than the next lender. Consequently, you may not know everything there is to know about hard money loans. California base lenders, moreover, tend to focus on certain niches; therefore, you may only have knowledge of one particular niche.

With that being said, you may want to become clear on at least the top three pros and cons of using hard money. It is important to know the top three advantages and disadvantages of hard money because, as briefly suggested, your niche may be different then the next borrower’s or your lender may have slightly different requirements or conditions than your previous lender. The point here is that you will always have to do your research when approaching your next business venture or attempting to secure financing.

Therefore, you need to understand or rather be well-versed on the basics of what hard money financing can do and what it cannot do. Of course, the best way to go about being well-versed in hard money is to be clear on why borrowers, investors, and builders find a real benefit in using this particular kind of financing as well as why others are wary of using hard money for their venture.

Understanding those Universal Benefits
The top three advantages then include the ability to fund your project or commercial venture quickly with little to no waiting period for approval. If you are lucky enough to have all your ducks in a row, approval can happen same day once your lender looks at the basic of the potential property, available equity or down payment, your experience in the real estate market, your end game or exit strategy and of course what cash reserve you have available. Besides these basics, top reason number two is the fact that there aren’t really too many other requirements or at least there are not as many requirements as you would typically see with standard financing. Lastly, the third reason is the ability to fund that “unfundable project”.

Risk less by Staying Informed
More than likely you are aware of the top three disadvantages, but nevertheless, they include higher interest rate, short term use, as well as equity or a sizable down payment. The reality is that if you know exactly what you will use your hard money financing for and how long you will need it for, it is very feasible to risk less with hard money financing. Thus, no matter your niche and no matter your lender, you can stay on top of things and turn a profit if you do your research beforehand and stay informed during the entire 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
  






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.