5 Things You Need to Know about Arizona owner occupied Hard Money Loans

If you have poor credit or a blemish on your financial history, a traditional bank loan might not be an option for you. Don’t worry — Arizona owner occupied hard money loans might still be an option to get you in a home.

If you’ve been turned down for a loan by the bank, you might be interested in alternative funding options. Let’s look at some pros and cons so you can decide if it’s for you.

1. What are they? Hard money loans are loans that are secured with collateral. Rather than look intently at a borrower’s credit score and financial history, hard money lenders use the borrower’s property to cover the risk of lending the money. This makes them easier to qualify for and faster to get than traditional bank loans.

2. Can they be used to buy a family home? Most people think of hard money loans when they think of fix and flips or rental properties. However, these types of loans can also be used by people who intend to buy a home and live in it.

3. How do Arizona owner occupied hard money loan differ from regular hard money loans? In a hard money loan for a fix and flip or investment property, the borrower traditionally sells the property for a profit and repays the loan. If the borrower doesn’t intend to sell the house, the requirements may be a little different.

4. What are the rates? Because of the risk for the lender, the rates for these types of loans are typically a little higher. Most range between 6-12%.

5. What are the extra requirements? Since there’s not an investment property put up as collateral, borrowers may be asked to provide W2s, tax returns, pay stubs and proof of any debts.

Many Hard Money Lenders Don’t Do Arizona owner occupied Loans

Since the financial crisis and the Dodd Frank Act, which tightened lending regulations, many hard money lenders stopped doing these loans. The ones who still do them often ask for more documentation and may have stricter requirements for giving them out.

Finding an Arizona owner occupied Loan in Arizona

While we do less Arizona owner occupied hard money loans than before, we still have them available. Depending on the circumstances, we can accept co signers, do 100% financing and offer interest rates as low as 9.5%. If you’re interested in using alternative funding to get into your own home, give us a call today to see what we can do for 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
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.

What Good Is An Arizona Construction Loan?

If you are exploring your options on the real estate market, you may be wondering what an Arizona Construction Loan is and what the benefits are compared to other loan options, like fix and flip loans. Read more below to find out how an Arizona Construction Loan can make all your dreams come true!

An Arizona Construction Loan can save you tons of time when searching for homes on the real estate market.

When you are buying a home, you don’t want to settle. After all, you will be living in it—if you don’t enjoy it or it doesn’t meet all of your needs, you won’t be happy and you won’t be able to live out your preferred lifestyle fully. Investing in a construction loan allows you to take your wants into your hands and build your dream home from scratch.

Sometimes the perfect home exists, but it’s not in a good neighborhood or the distance is too far from work. Sometimes a home meets all of your needs but details, like a small yard, end up being deal breakers. If you choose to build a home on a vacant lot, you will be able to design something that meets all of your needs. Perhaps you want two in-home offices, or you want an in-home gym or untraditionally sized bedrooms—you can get all of this by designing the home yourself.

Tips on Choosing a Vacant Lot

Before just choosing any lot to build your dream home on, you will need to consider a few things. First of course there is location—do you want to be near school or entertainment districts? Do you want to live in a large social neighborhood or a quiet, isolated one? Additionally, you will have other locative aspects to consider, like if there are any curbs, sidewalks, power lines, and water lines nearby. All of these things are prime to consider when building and can be a deal maker or breaker in the building process.

Of course, before accepting the terms to an Arizona Construction Loan, you will need to consider more technical aspects of the property, like if there are any HOA requirements or limitations the city requires you to follow. All of these things are as important, if not more, as how many bedrooms you want in your home.

Why Private Money Lenders

If you are seeking out construction loans in Arizona, you may be considering options from both public and Private Money lenders. Public money lenders are traditional options. They include banks and credit unions and have generalized standards when it comes to qualifying for loans. Unfortunately, they will not be able to work one on one with you in the way that a Private Money lender would be able to.

Private Money lenders have flexibility and speed when it comes to loan requirements. Because they consist of private lenders and companies, they are much more likely to be able to work one on one with you—which is something you may want when doing something as specific, personal, and unique as building your dream home.

If you are seeking a Private Money lender, give the mortgage brokers at Level 4 Funding a call. We offer Arizona Construction loansand the ability to work individually with you. Give us a call today and see how we can help 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
Dennis Dahlberg Broker/RI/CEO

Pros and Cons of Arizona Construction Loans

As with any financial tool, it is vital to know the pros and cons of Arizona Construction Loans before entering into a legally binding contract. This is the only smart way to choose the best loan for your project.

There are many different options when it comes to funding a construction project. You might explore using a home equity line of credit, a personal loan, or even an advance from credit cards. The other option is to secure a construction loan to cover the cost of the build. But before committing to the path of Arizona Construction Loans, it is critical to understand these Loans, their benefits, and their drawbacks. Only with all this information, can you make a well-informed choice about which loan will best meet your needs.

Arizona Construction Loans offer a massive benefit to borrowers during the construction phase because they are interest-only during that time. So, you have all that time to save before you are required to start paying down the principal on the loan. That reduced payment is beneficial if you are building your next home and need to cover your current living costs while still paying the construction note. But as soon as the construction is completed, be prepared for the monthly payments to increase substantially.

While you might not think of a traditional lender as flexible when it comes to loan terms that is not always true with a construction loan. In these cases, the lender is willing to work with you more on terms that will meet your needs because construction projects vary greatly. This could include a longer-term because of the region and weather of the build, or for a more intricate construction process. But this flexibility can be beneficial in finding the perfect loan to need the needs of your specific project.

The Downside of Arizona Construction Loans

Because a construction loan is funding a structure that does not exist yet, there is really nothing to be used as collateral. That fact drives lenders to impose more stringent criteria to those who are trying to qualify for the Loans. A credit score of 680 or more is a must, and the down payment is likely to exceed 20% of the loan value. And because of the increased risk associated with these Loans, you are looking at a higher interest rate. Rather than paying just prime, you might pay prime plus 2 – 3%.

More Risk but Also More Reward

Getting a loan for a construction project is certainly more challenging and expensive than securing a traditional mortgage. But when you are looking for a custom structure, you need to be willing to pay more for the perfect fit once the project is completed. The risk involved in a custom-built project is more significant than a traditional mortgage. More issues and costs could arise, which could result in a higher rate of borrowers who default on the loan. And the lender will face more challenges in finishing and selling the property if there is a default. But the big win for you is getting precisely what you want when the build is completed. So, do your homework, learn about the Loans, and select the one that works the best for 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
Dennis Dahlberg Broker/RI/CEO

How to Fix and Flip in a Seller’s Market

Hard money loans can help you fix and flip a property. In a seller’s market it can be difficult to find affordable inventory.

So you’ve got your Arizona hard money loan proposal almost complete, you just need the perfect property. That can be hard to find if it’s a seller’s market which means prices are inflated and inventory is low. Here are some ways to keep your fix and flip business going through the highs and lows of real estate.

Look for FSBO Properties

FSBO means for sale by owner. Some sellers won’t use an agent to list their property so it won’t hit the online home sites. You may only find them by driving by and seeing as sign. That makes them more difficult to locate, but it gives you the opportunity to negotiate directly with the seller and you’ll be able to explain your offer face-to-face, getting the most for your hard money loan. This can also save money on your deal because they most likely won’t be paying a commission to sell.

Have a Realtor On Your Side

Realtors also have the opportunity to see properties that may be a good investment for you by seeing what is going into foreclosure soon so you can swoop in and make a cash offer to keep that person from going under on their home and losing it to the bank. This is an opportunity to get the house for what they owe, rather than having it marked up and potentially getting in a bidding war on a home that’s already listed.

Inflated prices due to a seller’s market can make it difficult to keep your profit margins up so it’s important to find other ways to get your hands on a house that will provide a good return on your investment. The tide will turn eventually, as real estate always does, and you’ll have the opportunity to scoop up properties much more easily, but it’s important to be prepared for when inventory is low so that you can keep your business afloat.

When you’ve found that property, whether it be a FSBO or a pre-foreclosure home, bring your investment strategy to a lender like Level 4 Funding to discuss your Arizona hard money loan and how we can help you achieve your fix and flip goals.

The Pros and Cons of Using Hard Money

Chances are you are familiar with hard money loans from private lenders. In this article, we will look at some of the pros and cons of using hard money.

There are 3 main benefits of using hard money:

Fast Approval: Whether you are looking to invest in a fix and flip property, a piece of land or a need a construction loan, you want your funds available as fast as possible. Anyone that is remotely familiar with real estate knows the painstaking agony of waiting on a conventional mortgage. Because the borrower wants fast cash, bank loans and their piles of documentation along with all the red tape won’t be the way to go. With hard money loans, you can expect to be approved with a few short days and can receive financing within a week or two.

Collateral Options: Hard money lenders are investing in the value of the property instead of your creditworthiness.

Because of this, they will generally accept various types of collateral as long as it can secure the loan. Individuals with poor credit have a strong chance of a hard money loanapproval.

Flexibility: Unlike traditional lending institutions, hard money lenders don’t use a complicated underwriting system. They look at each deal individually and will work with borrowers to try and make the loan fit their needs.

Hard Money Loans Don’t Work for Every Situation

Before you consider using hard money, you need to see the entire picture. There are some cons of hard money, as well:

Short-term: Because these loans are typically used for renovating and flipping property, most hard money loans are strictly available as a short-term solution. Generally, these loans have terms from 6 months to 3 years. When loan terms are so short, a higher interest has to be mandated in order for the lender to make a profit. However, a pro (in this con) is hard money loans are interest-only until the last payment, which is a balloon payment. Hard money lenders also, rarely enforce an early payment penalty.

Higher Interest: Piggybacking upon the previous con, these interest rates can be incredibly high. They usually range from 8%-18%. However, if you are a seasoned real estate investor, with a proven track record, chances are lenders will be incredibly flexible with your terms and repayment plan. However, as a novice more-than-likely you will pay quite high interest rates.

In real estate investing, hard money loans are the main choice of investors.

Hard money is not typically meant for a residential property. It is meant for a situation in which the property will be turned around quickly and a profit is made. In simple terms, hard money should be used for investments. However, borrowers that don’t qualify for traditional lending have another financing option, while they work on their financial situation.

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
Dennis Dahlberg Broker/RI/CEO

Top 5 Reasons to Get an Arizona Bridge Loan

Just like the structure they’re named after; Arizona Bridge Loans can get you from one place to another safely and securely. Here are some of the top reasons people use this type of loan.

Arizona Bridge Loans are short-term loans that get people and businesses from one asset to the next. They usually come with terms between 3 and twelve months and are helpful in a wide range of circumstances:

● Buying a new home before selling the old one. There are many reasons people might need to move to a new home, perhaps because of a job relocation, a growing family or sometimes a divorce. They may need to move before they can sell the old home, either because of some emergency or because the market just isn’t right to sell the previous residence. A bridging loan can provide the funds to purchase a new home while the old one is for sale.

● Turnaround financing. Businesses that are struggling often come up with plans to right the ship. Those plans cost money and struggling business oftentimes don’t have the liquidity to pay for restructuring. These types of loans can rescue a sinking ship.

● Funding while waiting on conventional financing. Because of complicated underwriting processes, banks often take a long time to approve and fund loans. Borrowers might need to act quickly to move on a great property deal and don’t have time to wait. Loans of this type can be a stopgap until traditional funding comes through.

● Cash flow stabilization. Slow seasons can be hard to weather for some companies. They need funding to stay afloat until the busy, lucrative season starts again. Loans like these can help a business survive the lean times.

The Benefits of Using an Arizona Bridge Loan from a Hard Money Lender

These loans might not be a solution for every situation, but they can be lifesavers for the right scenario (like those detailed above). Rescuing a business, staying afloat during a lull in sales and helping you move to a new home while you sell the old one — these are real life situations where a hard money loan can be a blessing.

Arizona Bridge Loans in Arizona

Level 4 Funding offers Arizona Bridge Loans for many of these common scenarios. You’ll find loans up to 90% loan to value, rates under 8 percent and terms as short as 3 months and as long as 24 months. Contact us now to find out how we can help.

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
Dennis Dahlberg Broker/RI/CEO

How Arizona Construction loans Helped My Parents

You can’t control what is on the real estate market, and eventually house hunting can become completely exhausting and emotionally draining. But you don’t have to give up. Consider the potential Arizona Construction loans have in making all your dreams come true.

My parents were searching for their dream home off and on over the course of two years. Eventually, every prospective look became the same: too small; no office; not big enough yard; disappointment. Sometimes the idea of modernizing a home came up, but it was just too much work to tweak something that wasn’t valuable to them into perfection—and not all homes can be tweaked in the way you wish.

Eventually, my parents decided to consider Arizona Construction Loan. Instead of endlessly searching for the dream home on a market of reality, they decided to literally build their dream home from the ground up.

How to Build Your Dream Home

My parents began searching for vacant lots and properties with the potential for building. This included seeking out quiet neighborhoods with a local community they would enjoy, while also considering distance to entertainment, business, and school districts. Finding a property wasn’t easy either. However, once they found the perfect lot, they were able to get started with a qualified team to build their dream home.

Building a dream home meant applying for Arizona Construction loansand a land loan to cover the cost of the build. This meant working with an architect, property manager, and builders to ensure their plans were possible and fit into the budget. Lots of research and resources were pulled together to find out what details and limits needed to be met.

Even though this was taking a lot of time and energy, they were content in knowing they were building something together that they would love. They were investing in a project that they would get to make their own from the very beginning. While over time you grow into a home and make it your own through the memories and experience you make and have in it, my parents were making a home their own from the second they stepped on the land and put a pencil in hand to sketch out their dream floor plan and layout.

Loans in Arizona

If you are seeking out Arizona Construction Loans, consider speaking with the loan lenders at Level 4 Funding in Arizona. Qualified mortgage brokers are available for you to discuss your plans and dream home with a free initial consultation with no costs or upfront fees. Private mortgage lenders like those at Level 4 Funding can work with you on an individual basis, unlike public money lenders like banks and credit unions. This is a wonderful factor when it comes to something as unique and personal as building a home—your experience, preferences, and budget are going to be completely unlike other borrowers based on what your dream home is, and the lenders at Level 4 Funding understand that and will work with you.

Don’t give up on your dreams. Make them a reality by considering how an Arizona Construction Loan can make your dream reality. Give Level 4 Funding a call today to see how you can make that happen, just like my parents did with their Arizona Construction Loan!

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
Dennis Dahlberg Broker/RI/CEO

What Are Arizona Construction Loans?

When you are building rather than purchasing an existing building, structure, or home, the loan requirements are different. Understanding these Arizona Construction Loans is critical to the success of your project.

There are two main categories of Arizona Construction Loans. The first is a construction to permanent loan. In these Loans, the money to build the structure is advanced to the contractors in stages. The balance of the loan becomes the permanent mortgage after the construction is completed. A stand-alone construction loan only covers the cost of building the structure. Once the building is completed, the owner must then secure a mortgage or be able to cover the cost of the construction loan in cash. And while this sounds like a great way to build a structure or home, few people have the resources to allow them to pay cash once the construction phase is finished.

The most significant benefit to selecting a construction to permanent loan is that the borrower only goes through the long and arduous process of securing a loan once. This means that all of the paperwork and credit reports are only done for the initial loan and then reused to obtain the final longer-term mortgage. The mortgage can be either 15 or 30 years and is just like any other mortgage that you might secure with either a fixed or adjustable rate. An added benefit with only one set of documents and credit checks is that there are fewer fees for the borrower to pay.

Using stand-alone Arizona Construction Loans allows the borrower a bit more flexibility when choosing a long term mortgage. In most cases, lenders will not offer VA or FHA Loans for a construction to permanent loan. But with a stand-alone loan, the borrower can secure these reduced-cost Loans as their long term mortgage. But the price to be paid for the selection is that you must qualify for the two Loans separately. That means maintaining a high credit score and low debt to income ratio for a more extended period of time.

Factors to Consider On Arizona Construction Loans

When you are deciding if you want to go through the loan application and approval process twice, consider all of the factors that could slow down the construction process. This could include a lack of materials, difficulty obtaining obscure materials, or even a long stretch of bad weather. With the two in one loan format, the time extension is not as big an issue, but if you are getting a second loan as your long term mortgage, a time change could add challenges.

Qualifying For a Construction Loan

Securing a construction loan is much like qualifying for a traditional mortgage. You need to show a very good credit score and also be able to make a down payment of 20% or more. Because the home or structure is not completed, it cannot be used as the collateral for the loan. In these cases, the lender will require specific documentation from the builder to secure the loan. Additional information about the builder could also be necessary to ensure that they have credibility and experience. If building appeals to you more than buying an existing property, it is vital to research the process of using a construction loan so that you can make a well-informed choice.

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
Dennis Dahlberg Broker/RI/CEO

Hard Money Changed My Life

As a stay-at-home mother of 15 years, my life abruptly changed with my husband’s death. This is my story of hard money saving my financial future.

I had always loved staying home with my children, attending PTO meetings and never missing a beat with my family. Carson and I had been married for 15 years when he suddenly passed away. He worked construction and we lived paycheck to paycheck, as so many Americans do; however, early in our marriage we had inherited a large piece of land with two small homes in Montana. We rented the homes out; that was the income that allowed for me to stay home.

My life was pretty perfect. I was secure and my family was taken care of, until the night of March 14, 2012. On top of feeling lost without my husband, I now had to figure out how to both emotionally and financially take care of our children. For weeks I couldn’t think, couldn’t feel and some days couldn’t move. The bills began to pile up and I was alone, with no one to lean on. I had home design skills but was also 40 years old with no work experience. I decided to go to a staffing agency.

In my interview I began giving information about myself in order to be matched with employment. Basically, I could be a receptionist. I had no college degree and no work experience. I literally broke down in tears when the agent asked if I had any property, anything I could sell. She began telling me how she started rehabbing homes and selling them, fix and flips.

How I Got My Start in Fix and Flips

I sold the property, as I had intended to do well before the conversation with the agent. However, I believed that I would pay the bills off and invest in stocks. I never thought of investing through real estate and making a much better return. My first fix and flip project was exciting, yet terrifying at the same time.

I worked with an amazing lender that took an interest in what I had been going through and helped me through the process, as I knew absolutely nothing about real estate investments. I found a house that needed a ton of TLC. My lender approved the loan at 85% ARV (after repair value), leaving me with funds for materials and labor. I ended up with a profit of $7,000 from my first flip. It took me 6 months to rehab and sell. I know that doesn’t sound like great money, but remember I was a complete novice.

I am now flipping 9 to 10 houses a year. Last year my gross income was $167,000. I have a wonderful relationship with my lender. In fact, he is the only one I have ever used. Because of the trust we have built and the success we have made he is very flexible with my loan rates and repayment plan.

Sometimes life will hit you hard and you have to be prepared.

It may sound scary to invest in real estate. Trust me when I say that the fear comes completely from the unknown. You don’t have to do it full-time. Through my years I have met people that maybe flip one house a year, but it is enough for their retirement, to put their children through college or towards a vacation. Hard money and the right hard money lender can change your world!

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
Dennis Dahlberg Broker/RI/CEO

Build Your Dream Home With a Arizona Construction Loan

House hunting can be an exhausting process that yields little results. If you are unhappy with what is on the market, consider how an Arizona Construction Loan can make all your dreams come true!

House hunting can be exhaustive. After a while, you may feel like giving up—but settling on a house is not something you should do. After all, you spend time in your home every single day and it is a reflection of who you are and functions within your lifestyle. Choosing a home that is too small or doesn’t have all the features you like will make you unhappy in the long run. Fortunately, there are other options.

Some prospective home buyers may go as far as to consider fixer uppers. Sometimes, this option can be cheaper.

However, it does involve a little bit of work and transforming a home before your eyes. Depending on who you are, if you have a natural eye for design and are able to work with the existing foundation, the process of making a fixer upper your own can be difficult—and, because you are forced to work with what is there, not all creative design choices are possible. If you are tired of not being able to find your dream home, or even renovate or modernize one to your liking, consider building one from scratch with a construction loan.

Why You Should Invest in Arizona Construction Loans

An Arizona Construction Loan will allow you to create your dream home. You will be able to design the floor plan, and even go as far as picking the location of your property, probably with the help of a land loan. Building a home from scratch is a lot of work that involves multiple heads: an architect, project manager, and the builders themselves. However, a collaboration like this one may be able to allow you to create the home you want but doesn’t exist on the market.

The idea of building a home from scratch can definitely be overbearing. There is a lot of pressure to do the job right, but you are not alone. If you don’t want to design your floor plan by yourself, you can work with an architect who can help make adjustments or suggestions that will help ensure you are getting the home you want that fits your aesthetic and lifestyle. If you choose to work with a qualified mortgage broker, like those at Level 4 Funding in Arizona, you can be confident that you are working with someone who considers your needs on an individualized basis with a thorough understanding of the real estate market.

Arizona Construction loans in Arizona

If you are tired of the nonsense availability of the current homes on the real estate market, give the lenders at Level 4 Funding a call to discuss what an Arizona Construction Loan can do for you. We offer a free initial consultation, with no upfront costs or fees, to help you determine the best way to make your dreams reality. Our lenders are willing to work with you on an individual basis so that you can build the home that speaks to you. Give us a call today!

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
Dennis Dahlberg Broker/RI/CEO