Tag Archives: Arizona fix and flip loans

WHERE TO FIND FINANCING FOR AN ARIZONA SPEC HOME

Have you been turned down by banks because you don’t have perfect credit? Do you have collateral? Do you need a loan to invest in property?

Many people are not familiar with the term, “spec loan.” A Spec loan is a term used for a loan on a speculative property; meaning it the end game is unpredictable. A speculative property is one that the developer has not sold. And, because the sale has not been finalized, the loan itself is only speculative. Financing a spec home is a process, and it’s a little different than a conventional home loan.

Traditional banks are not quick to approve financing for an Arizona spec home. It is a risk for a lender because it is essentially a loan for a construction project without a committed buyer; and that flags risk to the banks. You’ll work with a mortgage lender when building an Arizona spec home. However, the builder will need the financing from mortgage lenders to purchase the needed materials and pay the construction crews. To prove to the lenders that your income is sufficient to pay back the construction loan. The borrower is expected to have enough funds to pay for the monthly payments on the loan, holding costs, insurance and taxes.

You will also need to write a marketing plan because this loan is to build something that will make a profit in the future. The point of this plan will describe how high you will price your completed home. Remember, a Arizona spec home is a home that hasn’t been built yet.This marketing plan will show who your target buyers will be and how you will inform potential buyers of this home being on the market. One idea would be to hire a realtor to promote your investment.

Where to find financing for an Arizona spec home?

Traditional lenders usually are not willing to provide a borrower with a loan on an Arizona spec home hard money loan due to unreliable lending practices from the past. Arizona hard money lenders are much more eager to lend on an Arizona spec home than a bank. Arizona hard money lenders can adjust the market conditions and advance their products to match trends in the market. Arizona hard money lenders offer loans that are shorter than bank loans. For example, a loan may be six-months, have 4 points and a 13% interest rate. This is quite different than a traditional bank loan.

Arizona hard money lenders can create a unique loan structure. If you’ve been turned down by a traditional lender because of credit a Arizona hard money lender should be your next step.

Arizona hard money lenders can provide funds for builder’s projects that would be next to impossible to acquire from a bank. In most cases applying for a hard money loan is a simple process. Usually, a borrower only needs to fill out a loan application, have a short conversation with a lender and receive a conditional approval right away. If you have a project and traditional banks are turning you down; Arizona hard money loans may be beneficial to you.

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

WHY YOU SHOULD WORK WITH AN ARIZONA PRIVATE MONEY LENDER

November 8, 2018Arizona private hard money, Arizona private hard money lender, Arizona private money, private money lender arizonaArizona fix and flip loans, arizona hard money construction loans, Hard Money Lenders, Hard Money Lenders Arizona, private money lender, private money lender Arizona, private money lenders, spec home financingbigdaddydennis

What is a private money lender? How can I benefit from one?

The definition of a Arizona private money lender is a non-institutional lender that issues short-term loans for the purchase and renovation of an investment property. These loans are secured by the borrower’s assets. An Arizona private money lender can be anyone from a family member to a private lending institution.

Private money lenders are commonly known as Arizona hard money lenders. These are considered the best types of lenders due to their reliability, costs, fees and loan terms.

The interest on a private money loan is an interest-only monthly payment. What that means is that throughout the repayment period the borrower pays only the interest accrued on the loan as their monthly payment. Then, at the end of the loan it is paid in full. Even though the interest rate will be higher than a conventional bank loan, the monthly payment may easily be less. Because of this many house flippers take out loans from private money lenders. In fact, short-term Fix-and-Flippers that want to buy, renovate and sell within 6 months to a year are great candidates for private money loans. Buy-and-Hold Investors looking to purchase and renovate a rental property, prior to refinancing with a conventional loan, also benefit from these loans. However, private money loans will fund a variety of properties such as apartments, condos, commercial real estate, and single family homes.

How do Arizona private money lenders work?

Traditional bank loan approval is based largely off a borrower’s FICO score, revenue stream and employment. Private money lenders are less concerned with your FICO score and more interested in your hard assets. This gives the lender security knowing if the borrower defaults they will be repaid.

After-rehab-value (ARV) and loan-to-value (LTV) are terms borrowers should familiarize themselves with. ARV is what the property will be worth once the renovations are complete. LTV describes the size of the loan you take out compared to the value of the property that is securing the loan. Private lenders will usually loan out an amount that is equal to a percent of a property’s LTV or ARV. Most commonly they will lend 90% of a property’s LTV and 80% of a property’s ARV. That being said, it is pretty common for private lenders to give loans based on ARV for a property in poor condition and a loan based on LTV in fair to good condition.

What to look for in an Arizona private lender.

Interest rates and fees— Private money loan interest rates will vary. Typically, interest rates are somewhere around 8%-15%; lending fees around 1.5%-11%. Make sure you research and find the rates and fees that will work best in your situation.

Experience— Lenders are proud of the years they have been in business and the amount of loans they have approved. Often this type of information is found on their websites. The more deals they have done equals more experience. Having experience on your side will make this process run more smoothly.

3.   Specialization: Private lenders frequently have a specific area of real estate

     they specialize in; this can be residential or commercial. You want to work

     with a lender that has experience in the property type you are financing.

Do your homework; find a lender that will work for you. It can be a scary step. But, once you familiarize yourself with the process it can make your dreams come true!

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

THE DIFFERENCES IN ARIZONA FIX AND FLIP LOANS

November 8, 2018Arizona fix and flip loans, fix and flipArizona fix and flip loans, arizona hard money construction loans, Hard Money Lenders, Hard Money Lenders Arizona, private money lender, private money lender Arizona, private money lenders, spec home financingbigdaddydennis

An Arizona fix and flip loan is a loan that investors use to purchase and renovate a property. A fix and flip is a distressed house that needs to be “fixed” and then after is quickly “flipped” making the investor a profit. Usually, the loans used for these projects are of relatively short-duration.

There are numerous types of loans available for fix and flips. Finding the loan that will work best for you depends on your experience and financial situation. Arizona hard money loans are the most popular.

How to determine which Arizona fix and flip loan is best for you?

Arizona hard money loans are best for an investor who has been successful in fix and flips. Arizona hard money loans are also known as rehab loans— due to the rehabilitation of the distressed house. These loans have lower qualifications for approval. Loan terms are short— usually between 6 months to 2 years. Approval usually takes less than 2 days. A borrower will only have to wait 10-15 days for funding. However, interest rates will be higher— typically between 9%-15%. Although, a borrowers credit does not have to be impeccable they will still need at least a 550.

Another way to finance a fix and flip is through a Home Equity Line of Credit (HELOC). A HELOC works like a credit card versus a traditional loan. Investors are granted a line of credit, from their bank, based on the value of their current property. With a line of credit, interest rates are only charged on the amount borrowed. A HELOC term is typically 25-30 years and approval time can take upwards of a month and a half. Interest rates are lower than a hard money loan—around 5%.

A bridge loan is a loan that is used temporarily during the time between real estate transactions. It gives the investor funds to purchase a fix and flip without a contingency to sell their other property first. Investors use these types of loans to purchase property before flipping the property to pay the loan off. These loans are extremely short term — typically between 3 weeks and one year. Interest rates on bridge loans are usually between 6% and 9%. A lender will look more at financial ability than credit and financial history.

Which Arizona fix and flip loan is best?

There are many factors that must be addressed to determine which Arizona fix and flip loan is right for you.

Hard Money Loan: If you are a novice, but willing to work with a contractor or you are an experienced investor that has a good track record of flipping homes a hard money loan could work for you. You will be approved and receive funds quickly. There are high interest rates and shorter loan terms.

HELOC: A HELOC may be a good choice if you are an investor with an owner-occupied residence and a large amount in existing home equity. The repayment is only interest for the first 5-10 years; interest and principal for the remaining years.

Bridge Loan: This loan works if you know you will close quickly. You will need to be able to pay two mortgages simultaneously. The loan terms are a couple of weeks to a year.

Whichever loan you choose be sure to do your homework. Speak to a lender; they will gladly help you through the process.

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

October 29, 2018Arizona hard money lender, Arizona hard money lender, Arizona hard money loanArizona fix and flip loans, fix and flip loans, hard money lender, Hard Money Lenders, hard money loan, hard money loans, Phoenix fix and flip loansbigdaddydennis

You 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 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

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

The Benefits of Fix and Flip Loans

October 28, 2018Arizona hard money lenders, Arizona hard money loan, Arizona house flipping loans, hard money lender arizonaArizona fix and flip loans, fix and flip loans, hard money lender, Hard Money Lenders, hard money loans, house flippingbigdaddydennis

Flipping houses quickly can be a very lucrative business. But the key to being successful is having fast access to fix and flip loans.

Most people are familiar with the traditional mortgage loans offered by banks and mortgage companies. But everyone also knows that securing a mortgage from a bank can take a great deal of time and effort. When time is critical, such as it is when flipping a house for a profit, Arizona Fix and Flip Loans offer all of the benefits that you need including a fast approval and funding time. A standard bank loan can take far over a month just for approval but the private lender will be able to process your documents and have an answer for you in just a few days.

Another benefit to Arizona Fix and Flip Loans is that these loans can be used on any type of property purchase. A traditional lender is not going to be willing to look at bank owned, foreclosure, short sale or a run-down property and make a fair decision. But a private lender is only really interested in the current value of the property. Banks do not like to lend on riskier investments but a private lender is willing to assume a greater risk as long as the borrower is willing to pay a higher interest rate.

Another drawback to a traditional lender is that fact that they are counting on a full interest payment. This means that if you pay the loan off early, the lender is making less money in the form of interest. So to avoid that, the lender will charge an early repayment penalty. Basically, no matter when you pay off the loan, it still costs you the same amount. But a private lender is not going to charge you any early repayment fees in most cases. But it is critical that you read the entire loan document prior to signing it as the lender is free to impose any terms that he or she sees fit. It is your job to catch any issues with the terms before you sign the loan documents.

Costs of Repairs

When you are flipping a property, you understand that a large part of the cost involved is going to be for the materials and labor for repairs. A traditional lender is not interested in this issue and will not always work with you on a loan for repairs. But lenders who specialize in Arizona Fix and Flip Loans normally will set up a loan reserve which helps to cover some of the repair costs for the property in additional interest.

Pick The Right Lender

As you begin to learn more about the process of fixing and flipping houses, you will also learn more about the financial side of the business. But when you first start out, it is important that you select a lender who is familiar with the process and knowledgeable about the real estate market. This will ensure that you have a good resource and a solid partner to guide you through your first loan experiences.

Securing Arizona Fix and Flip Loans With Bad Credit

October 27, 2018Arizona fix and flip loans, fix and flipArizona fix and flip loans, arizona hard money lenders, Hard Money Lenders, hard money loansbigdaddydennis

For consumers with bad credit, flipping houses is a good way to earn a good profit and rebuild your credit. But first, you need to understand how to get fix and flip loans.

Having bad credit makes it nearly impossible to go to a traditional lender to get a loan for anything, let alone a business venture such as fixing and flipping homes. But if you are really ready to repair your credit, earn some good money and create a business to ensure your financial future, then Arizona Fix and Flip Loans could be the answer to all of your issues.

There is a nontraditional type of loan which is called hard money or sometimes asset-based lending. These are loans which are granted not based on the borrower’s credit score, credit history or even current debt level. These loans are granted based on the value of the property that you are going to purchase, which makes the name asset-based lending more meaningful. The secret is that the loan is secured by the property that you are purchasing. This offers the lender protection in case you default on the loan.

These hard money lenders are not just out to loan money to feel good about a selfless act though, they are interested in making money as well. And if you are using hard money due to bad credit, then you represent a higher risk. So the hard money lenders will expect you to pay a higher interest rate for the money that you borrow. In some cases, the rate can be as high as 15%. In addition, you will pay other fees such as closing and lender fees. But you are getting the loan even though you have bad credit.

Loan to Value

Hard money or Arizona Fix and Flip Loans are based on the value of the property. In most cases, the lender will offer anywhere from 70% to the property value to 80% depending on his or her personal preference. This is an added protection for the lender in the event that you default on the loan. If you default, the lender will seize the collateral for the loan, the property, and sell it to recover the investment in your loan. And the lender wants to be certain that the property is always worth more than the balance of the loan. So with a loan of 70-80% of the property value, there is always built in equity.

Understand the Terms of Fix and Flip Loans

Asset-based loans are a great option for someone who has bad credit but wants to get into the fix and flip business. But it is critical that you understand the full cost of the loan and use that number to create the budget for the project so that you will make a profit and be able to use that money to improve your personal credit and to also make your next purchase to continue your flipping business.