Month: September 2019

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

About: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Who Uses Hard Money Lenders and Why

Unless you are familiar with the benefits of hard money, you might not understand who uses hard money lenders in Arizona and why the relationship is beneficial to both the borrower and the lender.

Unfortunately, a great percentage of the population is unaware of what hard money is, who Arizona hard money lenders are and how they provide a very beneficial service to many borrowers. And a great deal of the confusion can likely be traced back to the term hard money. It seems to have a negative feel, that most people just can’t get past until they discover that it just means a loan that is not from a bank or other traditional lender. The term non-traditional loan would better represent the service that these lenders are providing to borrowers across the country.

While banks and mortgage companies come in small and large sizes but are pretty much the same in the mountains of rules, regulations and red tape, Arizona hard money lenders come in all shapes and sizes. A single person can provide hard money or it can be a group of individuals who work as a team to offer private loans. But the best part of borrowing from Arizona hard money lenders is that they are not bound up in all of the red tape that traditional lenders generate. They are free to set most of their own loan terms and practices as well as the process for loan applications and funding.

Banks and mortgage companies are forced to follow very strict federal regulations that detail pretty much everything that they can and cannot do. But each Arizona hard money lender is only governed by the state in which he or she operates. It is the Arizona Department of Finance who oversees the lenders and for that reason, someone in the firm or the actual hard money lender must hold a Real Estate Brokers License for each state that they do business in.

Who Uses Hard Money

Hard money loans are a great option for anyone in the real estate investment business who needs a loan quickly or needs to carry several loans on multiple properties. Because the property is the collateral for each loan, lenders are not against funding several hard money loans to an investor at one time, unlike a bank who will only issue based on what a credit score claims you can manage. Real estate flippers, investors, and even contractors use hard money loans all the time in their business and are very happy to pay the rate and fees that the private lender requires.

You Get What You Pay For

Borrowers understand that while a hard money loan might cost a little bit more than a bank loan, the benefits far outweigh those of a bank loan and are worth paying for. The lack of red tape, the simplicity in requesting and qualifying for the loan, and the flexibility of the loan terms make hard money very popular with investors and with consumers who have experienced credit issues in the past and do not yet qualify for a traditional bank loan.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

When To Use Commercial Hard Money Lenders

If you are having trouble securing a traditional loan, then you might think that you will never be able to become a real estate investor. But in most cases, you can work with Arizona Commercial hard money lenders and find the loan that you need.

Most borrowers turn to a bank, credit union, or mortgage company when they are in the market for a loan to purchase a commercial property. But the challenge there is that borrowers need to have a credit score of over 700, a ton of documentation regarding their personal and business financials, upfront fees for inspections and appraisals, and about three months to wait for the loan to get processed and the money to be in hand for the closing. But when all of those things are not falling into place, there is a solution.

Arizona Commercial hard money lenders are private lenders who offer legitimate commercial loans but with a few different criteria and qualifications than a traditional lender. These loans do not require a really great credit score, there are no upfront fees, the documentation required is minimal, and the loan can be approved and funded in less than two weeks! All of this is possible because the loan is secured by the property that you are purchasing. This makes asset-based loans far more flexible and accessible to many borrowers.

But there is a slight drawback to working with Arizona commercial hard money lenders, and that is the cost of the loan. Because the lender is assuming a greater risk by lending to someone with a lower credit score, he or she is going to want to earn more for that increased risk. In some cases, the loan fees and increased interest rate will make the loan 20-30% more costly than a traditional loan, but it is still far better than not getting any loan.

Benefits Of Commercial Hard Money Lenders

One of the most important features of hard money lenders is that the deal can be completed quickly. This is critical when you are working in the real estate investment business and need to grab a hot property quickly. The short term of hard money is also perfect for the fast fix and flip deals in real estate investing. And if you are carrying a lot of debt or just have really bad credit, then hard money lenders are going to be your best friends.

Not All Borrowers Have Bad Credit

In addition to the borrowers who can’t secure a traditional loan due to credit issues, there are many other ties that hard money is very useful. When you are purchasing a unique property or there are very unusual terms, most banks are not interested in funding the loan. These loans are also a great way to use the equity in a property to make renovations or even to purchase another property. And if you are not a citizen but need a loan for a property purchase, hard money is certainly the way to go. While the cost of the loan is a little bit higher than a bank loan, hard money opens up many opportunities that banks are not willing to fund.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

What Are Arizona private money lenders?

Hard money lenders are defined as private people or small groups who lend money. But does that mean that Arizona private money lenders are the same as hard money lenders?

For the most part, everyone knows hard money lenders as private lenders who provide loans based on the value of an asset being used as collateral rather than the borrower’s credit score. In most cases, it is the property that is being purchased with the loan, and the lender will only provide a specific percentage of the purchase price. This creates instant equity and security for the lender. But this also sounds like it could be just another name for Arizona private money lenders, which is not the case.

The term Arizona private money lenders is most often referring to a lender with whom you have a more personal relationship. The first group of people that you might approach if you are looking for a loan or investor is often friends and family members. This can also include neighbors, coworkers, and other people that you know and have a causal relationship within your life. But the key is that you already know them. This is a group of potential lenders with whom you feel very comfortable and can easily speak to about a loan, as opposed to a hard money lender whom you have never met before.

When your pool of family, friends, and personal acquaintances does not turn up a lender, most borrowers will extend the pool of potential lenders to friends of friends, friends of family members, and others who are in some way connected to you via another person. This is a way to broaden your search but to still be working with a known person or entity so to speak. You are not really using commercial means to find a lender as you would when working with a hard money lender.

The Next Step Is Referrals

If you are fortunate, you will have found at least a few potential Arizona private money lenders within your close friends and family. And if those do not work, then a friend of the family or of an acquaintance will offer to work with you. But if you have exhausted all of the people that you know, then you might circle back to all of them and ask for recommendations of an actual hard money lender that they have experience or knowledge of. This provides at least some sense of security in knowing who you could be borrowing from.

Close But Not The Same

While hard money lenders are also private lenders in the sense that they are not a bank or other traditional lender, they are not really the same as what you would consider a private lender or person that you know. In this case, the term private is describing a person that you already have some type of relationship with before you approach them to borrow money. The benefit of going the private route is that the fees are likely to be lower, but there is always added stress when you are borrowing money from someone that you know.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

Understanding The Benefits Of Arizona Hard Money Loans

Most consumers believe that the cheapest loan is the best. But there are many benefits to Arizona Hard Money Loans that can overshadow the higher cost of these loans.

When you are shopping for something, the most appealing option is often the cheapest one. But in the case of Arizona Hard Money Loans, the price is not what makes these loans appealing. The fact that the loan is not based on the borrower’s credit score is one of the greatest benefits. This means that hard money is an option for those borrowers who are unable to finance a traditional loan through a bank or mortgage company. But there are many other situations that make these asset-based loans beneficial to many borrowers.

The fix and flip sector in real estate is booming right now. And many of the people who are making a good living buying homes in disrepair, fixing them, and then selling them do not want to take the time to secure a traditional mortgage. In most cases, these great deals sell quickly, and no one can get a bank loan fast enough to buy these underprices properties. In addition, it can be challenging to secure multiple mortgages through a bank, even when they are investment properties. But hard money is the perfect solution for real estate investors interested in fast flips.

Builders and contractors are also very fond of using hard money to fund their projects. Even a business can find it very challenging to get multiple loans on properties or for the construction of multiple buildings. Banks require a great deal of income for these types of loans, and they want to see a lot of money in the bank as proof that the loan payments can be maintained throughout the project. But a hard money lender is more interested in the value of the property. This makes Arizona Hard Money Loans an easy choice for construction companies and contractors even though the interest rates and fees are higher than a bank.

Those With Past Credit Issues

If you had credit issues in your past, you still might be paying the price even if you are in a great spot now. Things like a foreclosure will follow you long after you have sorted out your challenges and gotten your financial life back on track. You could have a great job, very little debt and now late payments for 24 months, but you are still going to face challenges getting a loan if you have a foreclosure in your credit history. But hard money lenders will not deny you a loan because of a past issue if you can make the down payment and the monthly payments on a loan.

Cost Is Not Everything

There are some cases where the cheapest option is the smartest choice, but Arizona Hard Money Loans can be a good solution for many borrower’s needs. Sure, traditional loans are cheaper, but they involve much more paperwork, a longer time frame to secure the loan and a much higher credit score. Builders, contractors, real estate investors, and consumers with low credit scores all know that hard money can be a great option when traditional lenders don’t meet your needs.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

Is It Legal To Work With Arizona private money lenders?

When the terms of a loan sound too good to be true, it is wise to make sure that the loan is legitimate. But in most cases, working with Arizona private money lenders is perfectly legal.

To understand why working with Arizona private money lenders is legal, you must first know that the term private money simply means that it is from a private person or group and not a bank. Banks, mortgage companies, and credit unions are called traditional lenders, while other lenders are called private or nontraditional. This does not mean that they are loan sharks or are operating a lending business outside the law.

In the case of a hard money lender, there are regulations that must be followed. But the red tape for hard money is far less than that of a traditional bank loan. And when you begin to dip into the realm of Arizona private money lenders, there are even fewer restrictions and guidelines. But these are for the lenders who are actually lending money as a business. When you get into borrowing from a family member or friend, there is really nothing that governs those transactions.

One of the biggest benefits for Arizona private money lenders that keeps them in the business is that they are free to set the interest rate as they choose and also to determine the terms of the loan such as length, fees and even what is considered to be a default on the loan. So borrowers need to be very careful about reading the entire loan document to be certain that they are in agreement with all of the terms. But most borrowers who can’t qualify for a traditional loan understand that their loan will be more expensive.

When It All Become Legal

Private lenders and hard money lenders are going to require that the property being purchased is used as the collateral for the loan. This means that you provide them with the deed in their name until you repay the loan. This is all reasonable and completely legal. But remember, if you are borrowing from a favorite uncle who is giving you a great interest rate, he can also ask for the same privilege and security of having the deed in his name. So, if you don’t repay the loan, even though Uncle Bob is not in the lender business, he can take possession of the property.

It’s All Legit

Most borrowers are very sheltered and never look any further than their bank when they need a loan. But there are people who make a living borrowing money to make money. And oftentimes they borrow that money from people who are in the business of loaning money to make money. Hard money lenders, private lenders and even a loan from Grandma are all legal. And all of them have different levels of oversight and regulations that they must follow. Knowing the terms of your loan and the expectations of the lender are important on any loan but especially one from a private lender.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

How To Use Arizona Hard Money Loans To Make Money Flipping Houses

Each lender and all Arizona Hard Money Loans are different, which actually works in favor of most house flippers. Customizing the terms of the deal can help simplify every flip.

Simply put, Arizona Hard Money Loans are just short term loans that are funded by private lenders rather than traditional banks or mortgage companies. The security for the lender comes from the collateral used on the loan, which in most cases is the property being purchased. To create instant equity, the lender will often only provide around 70% of the property value in the form of a loan, and the borrower is responsible for providing the rest in a down payment. This also motivates the borrower to make the project successful as he or she has personal money on the line in addition to the hard money.

In the interest of full disclosure, Arizona Hard Money Loans do cost more than a traditional bank loan, but there are many benefits that come along with the larger price tag. Because you are applying to a private lender, the processes and requirements are not as stringent as those of a bank or mortgage company. In fact, many hard money lenders are willing to work with borrowers to customize the terms of each loan. All of these relaxed rules mean that your application process is shorter and far less stressful, and in most cases, you get the loan funded in a fraction of the time it would take a traditional lender to fund.

Now it is time to apply all of this information to a house flipping business. First, as a flipper, you know that a great deal only comes around once in a while. And when it does, there are many potential buyers clamoring to get the property. And no one who is forced to wait on a bank loan is going to have a chance at the sweetest deals. But hard money can be in your hand in just days to close a deal that holds great potential. In addition, these loans are short term, which is exactly what you want out of each flip. A quick purchase, reno, and sale are how you make your money, so your loan should be just as short and easy.

What About A Larger Scale Project?

So now you are worried about getting into a hard money agreement, only to discover that your flip is going to drag on longer than the term of your loan. And while that is not the perfect situation, it is workable. You will know very quickly when a fast flip turns into a major overhaul. And when that happens, you have the ability to begin to search for refinancing options with a traditional lender or possibly with your hard money lender, but for a longer time frame. For this reason, it is always wise to negotiate a no penalty for early repayment clause in all of your Arizona Hard Money Loans.

Know Your Terms And Your Needs

As mentioned, one of the greatest benefits of hard money is that you are working with a private lender who can offer some very flexible terms if you are willing to pay for them. So make sure you know exactly what you are looking for from each loan. Work with the lender to tailor all of the terms including the length of the loan, the interest rate and fees, and even the clauses for early repayment and the option to extend the loan term in the event of some unforeseen issue with the flip.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

How To Use Hard Money For Arizona Business Loans

Most borrowers think of hard money as a resource for purchasing real estate. But hard money can also be used for creative Arizona Business Loans.

There are many times when a growing business, or even a struggling business, could greatly benefit from some extra cash. But these are often the times when a company has the most trouble securing Arizona Business Loans. The business, just like an individual, needs to displace stability and creditworthiness to qualify for the loan. When a traditional loan is not possible, turning to hard money can be a game-changer.

Hard money loans are defined as asset-based loans, which means that there needs to be physical property used as collateral on the loan. This collateral can be a piece of property, a building, inventory, or other items which are owned outright and have significant value. The value of the collateral determines the amount of the loan and also if the lender is willing to provide the loan. The borrower’s credit score or credit history is not really a factor, as it would be in a traditional lending agreement.

What might be a shock to many business owners is that these nontraditional Arizona Business Loans carry some much higher interest rates than bank loans. The rates can start at around 12%, and some go as high as a full 30% interest. Also, most lenders are going to charge 5-10 points to carry the paper. But when you can’t secure a traditional business loan, this is a great option to keep your business functioning.

What Business Owners Need To Look For

Because these Arizona Business Loans are funded by private lenders, the terms of the loans can fluctuate greatly. Hard money lenders are not required to follow all of the same restrictions and guidelines that traditional lenders must obey. This means that the lender sets all of the terms to his or her own liking. The term of the loan, the payment schedule, and even the definition of a default on the loan are set by the lender. Borrowers need to carefully read all of the loan documents to be certain that they understand their responsibilities so that they do not end up defaulting or paying large penalties or fees.

Use The Flexibility To Your Advantage

Knowing that private lenders have much more freedom when writing loan documents and terms, a wise borrower will use this to his or her own advantage as well. Asking for terms that suit your specific needs is not unusual or off-putting to more private lenders. This is one of the features that make hard money appealing and also one that justifies the higher interest rate and points that the borrower is willing to pay. So, give some thought to the length of the loan, the payment schedule, the fee schedule, and even clauses like an early repayment penalty or option to extend the loan term. All of these could be beneficial when you are working to pay back the loan and the larger interest amount that you have agreed to. While private loans can be more expensive, they meet a need for borrowers and pay private lenders the rate that they feel they need to take a greater risk than a bank would.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

How To Understand And Benefit From Arizona Hard Money Loans

Most consumers don’t even know what Arizona Hard Money Loans are, or how to use them. But with a basic understanding, they discover that hard money is a legitimate loan for some people.

When you mention to someone that you are looking into Arizona Hard Money Loans, they often look at you in a sympathetic manner and ask if they can help you out in any way. That is because they think that you have just admitted to being in some kind of money jam and that you are considering using a less than legal solution, kind of like a loan shark. Hard money just sounds bad, like you are going to have to do something really hard to get the loan. But the truth is that getting hard money is really very safe and easy.

Arizona Hard Money Loans are just another name for asset-based lending. And all that means is that you are using something as collateral for the loan, other than your outstanding or possibly shaky credit score. But as you might have guessed, this is not a form of lending that goes through a stuffy bank or mortgage company. These loans are funded by private lenders, and that is why they are called non-traditional loans. The money is not hard, nor is the process to get it, and when you do get the money, it looks just like what you would get from a traditional loan.

As mentioned earlier, these Arizona Hard Money Loans are far easier to obtain than a traditional bank loan, and that is because the lender is only really interested in the value of the collateral that you are offering. In most cases, the collateral is the property that you are purchasing with the loan money. And because your financial history and credit score are not under tremendous scrutiny, the process is far less stressful and drawn out. The lender has the property appraised and then asks you for a small amount of information.

What You Need To Prepare For An Arizona Hard Money Lender

Even if the property has great value, the lender is going to want to know a little bit about you, the borrower. He or she might want to know your credit score, but don’t worry that a low score will cause your request to be denied. The lender is just getting an idea of your income and debt load to be sure that you can make the loan payments. In addition, the lender is going to want to see your plan for the property. If it is a fix and flip, a long-term rental or a full renovation the lender will want to be sure that you are prepared financially and in terms of skill to complete the project and not destroy the value of the property. With a good business plan, some experience, and cash for the project, you will be almost assured of getting a loan.

It Sounds Too Good To Be True!

This is the real world, and any business deal that sounds too good to be true usually is a scam. But hard money is a legitimate lending business. The reason private lenders are in this business is that they can charge a higher interest rate and earn more money on each loan. But the simple truth is that these short term loans make it possible for many real estate investors to begin very successful careers. It is a situation that works to benefit both the borrower and the lender.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177

111 Congress Ave | Austin | Texas | 78701

How To Select Quality Hard Money Lenders

When you can’t go to a bank for a traditional loan, hard money lenders in Arizona are a great option. But only if you know what to look for in a reliable lender.

When you decide to use hard money rather than a traditional loan from a bank or mortgage company, you quickly discover that it can be more challenging to locate reputable Arizona hard money lenders. It is not nearly as easy as going to a bank that is well known and offers a very long and public history of funding loans. But there are a few important tips that will guide you through the process of selecting professional and reputable lenders.

As you know, hard money loans are not based on your credit history in the same manner as a traditional bank loan. But serious Arizona hard money lenders are likely to check your credit just to know a bit more about you and your financial position. This does not mean that they are going to deny you a loan because of a low credit score, but it is a good indication that they are operating a legitimate business and what to learn more about you as a potential client.

When you begin to research your options for hard money lending, each lenders history will be important. You are not necessarily looking for how long they have been in the business as much as you are looking for the number of loans that they are funding. The more volume, the more active the lender is and in most cases the more reliable and legitimate as well. Lots of satisfied customers mean that you are likely to have few issues as the lender has created a smooth and issue free system for processing requests and for funding.

Don’t Be Afraid To Ask Questions

You would never work with a bank that could not or would not provide references upon request. And you should take that same approach with Arizona hard money lenders. Asking for references only shows that you are working on your due diligence to make a smart selection. Potential lenders will respect that fact. But don’t stop at just asking for the list, make some calls to see what previous borrowers have to say about your potential lenders. That will tell you a lot about the level of customer service that you can expect and how well the past borrowers liked the entire lending process and experience.

Make The Choice That Is Best For You

Not all Private Hard Money Lenders are the same, and not all of them will offer the same benefits or even processes. Learning about this information up front is very helpful when it comes time to select the lender that best meets your needs. In the end, it is not always about the cost of the loan as much as finding a lender that you are comfortable working with and that you trust. Investing the time to find that lender who is a perfect fit for you can eliminate a great deal of stress throughout the life of your loan.

Dennis Dahlberg

Broker/RI/CEO/MLO

Level 4 Funding LLC

Arizona Tel: (623) 582-4444

Texas Tel: (512) 516-1177