February 2020 - Page 5 of 5

Why Arizona Fix and Flip Loans May Be Key in Winning Bidding Wars

The general rule with rehab properties is not to get into a bidding war at all. At the same time, leveraging Arizona Fix and Flip Loans is one of the many strategies that can help you come out on top.

Getting into a bidding war when you’re trying to purchase an investment property, with or without Arizona Fix and Flip Loans, is almost always a bad idea because it often signifies that you’re emotionally invested in the property. It’s hard to make sound business decisions when you’re attached. However, there are times when paying a bit more won’t derail the profitability of a rehab and, in these cases, knowing what strategies work, and what doesn’t, is essential.

The latest research shows investors can boost the odds of coming on top by leveraging one of three strategies. For a 20% boost in odds, investors can agree to waive the financing contingency, removing their ability to back out of the deal if funding for the purchase doesn’t come through. Back in 2016, this was actually good for a 58% boost, a sign that what’s important to sellers is shifting.

Meanwhile, writing a personal letter to the homeowner is good for a 59% boost; up from 52% a few years back. Experts say it’s important to leverage some kind of personal connection you have with the property, given that many people have attachment to their homes.

All-Cash Offers Make Sellers the Most Eager to Do Business

At the end of the day, agreeing to pay cash for the deal increases the odds of an offer being accepted by 206%, up from 97% in 2016. While Arizona Fix and Flip Loans are technically not cash, they offer many of the same benefits of a cash deal. For example, they close in a matter of days versus the weeks or months of a conventional loan, which means the seller’s not stuck waiting on financing. They’re also the ideal option when a home is in disrepair or uninhabitable. Many sellers erroneously believe that a buyer with cash is the only one who can overcome these hurdles. It’s important to be clear that you don’t have cash when you’re making an offer, but educating the seller on how hard money works, and how similar it is to getting a cash offer on their end, can help seal the deal.

You won’t increase eligibility by skimping on diligence.

What doesn’t help? Skipping inspections, the experts say. Sometimes sellers will try to make the sale go smoother by having a pre-inspection, while buyers may agree to waive an inspection contingency if they think others placing bids will do the same. These things don’t change the odds of winning a bidding war. However, by touching base with lender on Arizona Fix and Flip Loans before talking to a seller, the odds can skew in your favor exponentially, allowing you to leverage both the “cash” offer and financing contingency strategies. If you can make an emotional plea via letter, you’ll be in an even better place.

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.

Can Arizona Commercial Hard Money Lenders Help You Flip Without the Fix?

If you’re a residential flipper you know it’s tough. You might even have cough from all the drywall you’ve inhaled and your hands might be scarred from carpet staples, not to mention the many sleepless nights each project brings in the end a few thousand dollars. What if I told you there’s a better way? Well there is. Thanks to the way commercial properties are valued, it’s possible to flip without the fix. And lucky for you, this article will show you what to look for in a deal and how Arizona commercial hard money lenderscan help.

Here’s how you can flip without a fix Arizona commercial hard money lenders:

No fix flips are possible thanks to the way commercial properties are valued, based on income produced and cap rate or:

• Income/cap rate= property value

In the simplest terms if you can boost the income generated by a property you can the resell it for a higher value without so much as breaking a sweat.

I’ll be using some math to prove my radical theory, so bear with me as I go over three hypothetical instances of no fix commercial flips. Please note for all these examples we’ll be considering a ten unit apartment complex wherein units are occupied, with each unit brining about 750 dollars in rent per month. The prevailing cap rate in the area is 10 percent, so this property is valued as follows:

• 72 K in annual income/10 percent cap rate= the property is valued at 720 K.

Here’s two no fix flip strategies we could use in this case.

• Raising rents to market value: What if average rents rose in the surrounding area by say 50 dollars a month? Meaning you could raise monthly rents on each unit to 800 dollars. Your current tenants might be willing to stomach a 50 dollar a month rent increase, or they might not in any case, lets see how the math pans out shall we?

• 77 K in annual income/10 percent cap rate= 770 K in new property value -720 K purchase price= final profits of 50 thousand dollars.

• Boosting occupancy: Arbitrarily raising rents without improving our hypothetical apartment complex might upset a few people. So perhaps a better strategy in this case would be to lock in two new tenants under long term leases, without raising rents on the other units. Let’s see how the math plays out:

• 90 K in annual income/10 percent cap rate= 900 K in new property value- 720 K purchase price= final profits of 180 thousand dollars!

In both these instances you wouldn’t even have to lift a finger and you’d still make money. You’d flip without the fix. Of course, both the above cases were purely hypothetical, but still you can see what’s possible.

Nevertheless, you might have noticed the purchase price of our hypothetical property of 720 thousand dollars.

You probably don’t have that kind of money just lying around, so you’ll need a lender.

Why you need Arizona commercial hard money lenders to flip without the fix

If you’re in the residential flipping business you probably know about hard money, and so you know hard money providers might be willing to finance these sorts of no fix commercial flips. Just note, whatever sort of property you’re flipping hard money still remains your best option.

So with a bit of know how about commercial property valuations and with the help of hard money you too can flip without the fix. If you’re a flipper in the Phoenix area why not contact, local hard money lender Level 4 Funding for all your commercial lending needs?

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

Risk Less When Flipping a House and Obtain Fix-and-Flip Loans

If you’re looking to make money flipping houses, the best way is to obtain Arizona Fix-and-Flip Loans for each property, which will allow you to buy a home in any condition quickly and efficiently—and with minimal risk.

Have you ever thought about flipping houses? If you have, you’ve probably told yourself you’d be pretty good at it. After all, you like the idea of learning more about the construction and buying process, and you are looking forward to the quick and easy payoff this project will bring you. But if you don’t have the money on your own, you’re going to need to go to a lender who offers Fix-and-Flip Loans.

No Cash? No Problem: The Benefits of Arizona Fix-and-Flip Loans

Many people want to tell you that cash is king when it comes to flipping a house, that if you don’t have the money to pay for the property upfront, you shouldn’t even start the project. But the truth is, you can actually get a loan to pay for your project, a loan that will allow you to buy the home and pay for the renovations, so you can focus on getting your property ready for sale.

There are many benefits to getting a fix-and-flip loan. For one, you get your money quickly and you don’t have to wait long for approval. The real estate market is fast-paced and intense, and you shouldn’t have to wait to get in on the game. For another, they can help you get into real estate, especially if you are a new investor who doesn’t currently have other properties. Finally, if you work with a lender instead of using your own money, you are putting yourself at much less risk, and you’ll know you have someone else in your corner: a financial advisor of sorts who is just as invested in your project as you are.

Get a Helping Hand Flipping Property

It can seem like there is no way to get into the real estate game if you aren’t already in, especially if you don’t have boatloads of cash just waiting to be invested. And even if you did, you’re putting your money at great risk when you use it all the flip a home. Instead, seek Arizona Fix-and-Flip Loans from reputable lenders like ours, and get the best options for your needs 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

Breaking Down Trust Deed Investing

Trust Deed Investingrefers to an individual making a loan to another individual using real estate as collateral. The collateral is typically real estate and can be any type of land of property that has equity.

In essence, a trust deed is literally a deed to the property, which is given to a third party, not familiar with either individual parties, who has instructions on how to handle the situation in the case of a default in the loan. The trustor is typically a corporate trustee who is “trusted” with the actual deed.

Once the loan is paid back, the trustee records a reconveyance. A reconveyance, reconveys the deed back to the borrowers hands. If there is a default in the loan, the trustee would then convey the title to the lender.

Why Use Trust Deed Investing?

There are several benefits of trust deed investing. They are very safe and low-risk. As long as the property holds value, the investment is secure. Typically, people don’t invest more than 60% of the value of the property being used as collateral in case of default. Trust deeds are secured by tangible property; which means you can look and touch the property and have a chance to decide whether this property is something you want to own or be involved in selling in case of default. Generally, there are fantastic returns on deed trust investments. Depending upon the deal, the individuals involved and the property, it’s common to make a 10%-20% returns.

Of course, as with any type of investment, there are risks of trust deed investing. Make sure you know the value of the property. In today’s market, property values decrease in the blink of an eye, and it can be hard to be confident of the property’s value. It’s smart to stay in neighborhoods and areas where you are familiar with the property prices or can quickly get an honest appraisal. Be sure that you have extra cash at hand. Only invest a part of your available assets in trust deeds and the balance of your available assets should be as liquid as possible.

The bottom line is, with trust deeds, you have to know how to profile and identify properties.

Trust deeds will typically tie up the cash for one to two years. This shouldn’t be a problem because you should not be investing anything you will need to draw money out of for at least two years. These are not good investments for individuals expecting to have a cash flow issue for living expenses.

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

Understanding the Different Types of Land Loans

When you are purchasing land, it is essential to understand the function of all types of Arizona Land Loans that are available. Applying for the wrong kind of loan could be a costly mistake.

Most people are familiar with the process of securing a loan for a new home. But when it comes to getting a loan for a land purchase, the process is a bit different. There are actually three different types of Land Loans, and each one has a different purpose. Understanding the proper way to sue each loan is critical before you begin the loan application process. Applying for the wrong type of loan will not only waste time, but the application fees could also be lost.

Raw land is a piece of property that has absolutely nothing on it. This means no structures and also no utilities such as electricity, sewers, or city water. In addition, there are no roads on the property. If you are planning on buying land that has no improvements, then you are going to need to apply for a raw Land Loan. These Loans are some of the most challenging to get because lenders are concerned about how long it will take to have the land improved and for construction to begin on the property. The longer the land sits without improvements, the higher the risk to the lender. To counter all of this perceived risk, the interest rates are high, and the down payment can be as much as 50% of the value of the land.

Lot Arizona Land Loansare the next tier above a raw Land Loan. These lots have some of all of the infrastructure in place, such as water or electricity. A lot Land Loan is most often used for residential construction in an established area. Lenders see less risk involved in these Loans, and for that reason, the interest rates are far more reasonable. The interest can be from 10% to 20%, and the term for a lot Land Loan can extend up to 20 years.

Construction Loans Cover More Than Land Loans

A construction loan is a more substantial loan that will cover the cost of both the purchase of the land and the construction of the structure. These Loans require a credit score of 700 or more and a very low debt to income ratio. You will also need proof of a reliable income and the appraisal value of the structure that you intend to build. A construction loan often requires 10% to 20% down in addition to approved construction plans. Most lenders will also need some information about the builder to make sure that the firm is licensed and reputable.

More Critical Information

In many cases, the lender will offer a pre-approved builder list. This can eliminate a great deal of time during the approval process and much paperwork on your part. This also expedited the draw or payment process throughout the construction loan. These payments are made from the lender to the builder as specific milestones are met. Construction Loans only extend through the end of the build process, which is usually about one year. During the term of the loan, you are only responsible for making the interest payment. Once the construction is completed, the loan is converted into a 15 or 30-year traditional mortgage. Knowing how to use each type of Land Loan correctly is sure to save you both time and money.

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 Make a Profit with Arizona Land Loans

Making a profit with Arizona Land Loans seems simple: secure a property and sell it at a higher price, right? Turns out, it’s not so easy and there’s a few tips you can take into account to make your investment successful.

Investing in land is an option many people are choosing to aid in their finances. Whether it is to build on the land themselves a modern, updated home or save the property for the opportunity for sale in the future, land investments can be great options for buyers looking to make money in the real estate market.

However, not all land is equal. Before settling down on a property, you should really take the time to consider the location of your land, nearby developments, and the ability to implement amenities, like a sewer system, water line, and power. Investing in land with potential will give you and your potential buyers more options. This means when you take out Arizona Land Loans, you are getting more for your money, rates, and accumulating interest.

You may choose a great property because of its size and potential for development, however, if it is not located near business or school districts, it is less likely to be purchased by a family looking to buy. You also need to consider some technical requirements. What does the city require of the land should it be developed further? Understanding zoning requirements as well as covenants, conditions and requirements are musts before purchasing a vacant lot.

Why You Should Work with a Private Money Lender

Working with a Private Money lender can be helpful because of the time and focus they can give you. Unlike public money lenders, like banks, they can work with you on a much more individualized level. So, if you are looking to invest in land for the first time, you can feel confident you are not receiving generalized advice or even being viewed in a larger perspective.

If you are a first time borrower or have less than perfect credit, a Private Money lender will be more likely to approve your application for Arizona Land Loansthan a bank would. They can look at your plans, property, and resources, if you are planning on building, and take a risk with you that a public lender wouldn’t.

What You Need to Know about the Market

Qualifying forArizona Land Loans with a Private Money lender is much more feasible than with a public lender, however, it comes at a cost. Private Money lenders have higher interest rates, which are a literal cost that come with the speed of their flexible approval process. Before you agree to the terms with your hard money lender, you need to completely understand the financial aspect of it. Don’t rush into it because the pros seem to outweigh the cons. While this is true for some, take your time to make sure it compliments what you wish to do with your land investment.

Always be prepared. Building on land and reaping an investment is possible, but you need to make sure you are working with a qualified team who follows plans and meets deadlines. Ensure that your team believes in you, and you believe in your team. Consider the money lenders at Level 4 Funding 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

Why Don’t More People Use Arizona Fix and Flip Loans on Zombie Foreclosures?

Zombie foreclosures are a tempting way to find homes to rehab and can help your Arizona Fix and Flip Loans go father. However, you’ll find there are a few extra hoops to jump through when you’re working with the undead.

The housing market is tight right now. Foreclosures are at a 20-year low. Available housing stock is down too. Home values are skyrocketing and rents are up as well. It seems there isn’t a whole lot of room for someone doing rehabs with Arizona Fix and Flip Loans to get a foot in the door anymore. If you’re struggling to find good prospects, you may have come across something referred to as “zombie foreclosures” and wondered what they are and why more people aren’t leveraging the strategy.

Zombie foreclosures are a bit of a novelty in the industry. If you’re familiar with the foreclosure process, then you know that when someone misses a payment, and often even several, they still have avenues to follow. The bank will usually make several attempts to collect and then eventually send out the first foreclosure notice. Even when that first letter goes out, it still gives people a certain number of days to get their payments and any fees caught up. Then, there’s a court process and other events that occur. The whole thing usually takes three months or so and, during that timeframe, the individual is still the legal owner.

The problem is, sometimes people get spooked when the process starts, and they think they need to vacate right away. Other times, they just want to get out of the house and start rebuilding their life. There are times when the bank kickstarts the process and then backs out after a homeowner leaves too. Although this is typically seen more in low-income areas, where the bank doesn’t think the property will sell or doesn’t want to take ownership of it, even basic human errors can stop the process. In any of these cases, there’s now a property owned by the homeowner who has since vacated due to an impending foreclosure. This is a zombie foreclosure.

There Are Pitfalls for Homeowners and Neighborhoods When Zombie Foreclosures Occur

Bad things happen when properties are vacant. They begin to deteriorate without proper care and become targets for vandals and vagrants. Meanwhile, the homeowner is still on the hook for everything happening to his property. Whether there’s a water leak, HOA fees accruing, fines being issued for an unkempt yard, or taxes racking up, these things all fall on the shoulders of the homeowner, whether he’s there or not. Naturally, these conditions are an eyesore for neighborhoods, resulting in reduced home values, but they can also pose risks for safety and security too. It’s in everyone’s best interests to get that zombie foreclosure sold and, yes, you can use Arizona Fix and Flip Loans to purchase them.

Zombie foreclosures are the real deal for investors, but extra diligence is required.

Some zombie foreclosures never make it through the process due to title issues and other times, there are liens against the property. That means the title search, and often correcting issues, can become a lengthy and/or expensive legal process. Untangling the mess that comes through months and years of non-payment and neglect can be a serious challenge, even more so than your typical foreclosure. So while you can purchase a zombie foreclosure with Arizona Fix and Flip Loans, it’s probably not something you want to go alone on the first time.

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