Setabay Private Money Lender

Thursday, December 12, 2019

Banks v. Hard Money Lenders: Which Is Best for You?

When looking for a loan, there are a few places you could go, but how do you know what lender will work best for you? Banks and Arizona Hard Money Lenders have very different loan processes, so it can help to know about each of them to make a wise choice.

With the different loan options out there, it’s easy to feel a little lost. Banks and private lenders are very different, so one may be better than the other for the loan you need. Here are some of the major differences between banks and Arizona Private Money Lenders:

Application process

The bank loan application can be long and complicated, but might work for those who don’t need loans quickly. The process involves bankers going through your information in great detail to determine if you qualify for a loan, which can take some time.

Loan applications with Arizona Hard Money Lenders tend to be shorter and less complex than bank loans, meaning private lenders could be a good choice if you need a loan fast. Because private lenders tend to be more focused on collateral than financial history, the application process here can be much quicker than that of banks.

Approval

Bank loan approval is based on your finances, including your credit score and your past ability to pay back loans. A good financial history is your best way to get a loan from a bank.

If you have poor credit or loan history, Arizona Hard Money Lenders are the best choice for your loan. Arizona Hard Money Lenders base their approvals on collateral rather than your finances. Having collateral will motivate lenders to approve your loan, as they will collect your collateral if you are unable to pay off your borrowings.

Flexibility

Banks can be tied to their company policies. If they require a certain credit score for loan eligibility and you don’t meet that, you could be out of luck. Additionally, their payment plans, rates, and loan lengths might be rigid depending on their policies.

Private Arizona Hard Money Lenders have much more flexibility with loans. Lenders can adjust payment plans and other loan elements to help each client individually, which can be great if you need specific issues addressed.

Choose the lender that best fits your personal needs

Selecting the loan provider that is right for you should be based on your individual loan needs. Arizona Private Money Lenders work well for short-term loans that you need quickly and provide a straightforward, simple loan process. Banks could be better for longer loans, and work well if you have good credit.

Research Arizona Private Money Lenders to get more information about benefits, rates, and types of loans granted.

Although banks have their advantages, Arizona Private Money Lenders can work wonders for you. Research private lenders to learn more about their loan processes.

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: 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.
© 2019 Level 4 Funding LLC. All Rights Reserved.

Wednesday, December 11, 2019

DIFFERENCES IN LOANS TO FLIP HOUSES IN ARIZONA

Securing loans for flipping houses can be quite a challenge for investors. There are many loan options available to flip houses. It is important to distinguish the pros and cons for each type of loan in order to decide which is your best option.

Conventional Loans

Conventional loans are loans given by banks and mortgage companies. These loans are solely based on the borrower’s FICO score and income. There are a variety of conventional loans to qualify for. These loans can be easier on your wallet than other options. The interest rates are at market level, which will be lower than most other loan options, and the payments will be spread over a longer period than other loans—usually 20 to 30 years. The down payment on a conventional loan will depend on the program a borrower qualifies for and can be anywhere between 3% and 20%. Typically, these are not given out to fix & flip houses. To qualify for these types of loans you need a great credit history—banks like to see at least a 650 FICO score, a low debt-to-income ratio and proof of income from the same place of business for at least 2 years.

Government Insured Loans

The Federal Housing Administration (FHA) offers rehab (Arizona Fix and Flip) financing through its 203k loan program. This loan covers the lender for both the property itself and the renovation costs, unlike conventional loans that only lend for the purchase of the property. These loans can be used for multi-unit property investments—the only catch is that the borrower is required to live in one of the units. This loan is a very low cost financing plan, but the government has many rules and the borrower must adhere to all those rules to get financing. These loans are only available for a limited selection of properties and there cannot be extensive repair to the house. These loans are meant for properties that only need cosmetic repair.

Owner Financing

Owner financing means just that—the owner of the property lends the money to the buyer of the property, takes a mortgage on the property sold and is repaid through monthly installments based on the terms between both parties. This type of “loan” is usually closed quickly, and the fees that other lenders charge are usually not included. The problem with this situation is most sellers cannot afford to maintain their lifestyle while they wait for the money, from the house they sold, to be paid in full. If the buyer defaults then the seller is forced to take them to court and add that additional headache to their life. This type of loan can get very complicated, very quickly.

Arizona Hard Money Loans

A Arizona Hard Money Loan is the most popular loan for real estate investors. This type of loan is backed by the borrower’s assets not their credit score. In fact, most hard money lenders aren’t overly concerned with a borrower’s income—as long as they have the hard assets needed to cover the loan. They are interested in the return of their investment. Loans are typically closed within 3 days; down payments are negotiable and often 100% financing is available. The interest rate is higher than other options—usually 7-15% and they are short-term loans—3 months to 5 years.

House flipping can easily provide a healthy revenue stream.

Whichever financing method you choose make sure it is a method that will ensure you will be put you in a position to continue to invest.

Tuesday, December 10, 2019

4 SIMPLE STEPS TO GETTING AN ARIZONA HARD MONEY LOAN

Getting funded through a hard money lender is much less stressful than the process of a conventional loan. Many people aren’t familiar with the process of getting a Arizona hard money loan.

First of all, if you are looking to obtain a Arizona Hard Money Loan but aren’t familiar with the process, take a deep breath. This is most straightforward and painless loan process in existence. This article will cover all the steps you need to take to get funded through a hard money lender.

1. Find lenders— You can use a hard money lender from any part of the country. You can find many lenders online and everything is done online. But, if at all possible, you want a local lender. You can find local lenders through word-of-mouth, networking at local real estate investor functions or simply preform a Google search. Make sure you find a few and then meet with them individually.

2. Have a conversation— Once you have narrowed it down to a handful of lenders, look into what terms they offer. You can usually find this information on their web site, however you will always get more information from speaking to them. The first part of the conversation will be concerning the borrower’s loan request. The lender will ask a series of questions to determine if they can fund the request. After the lender gathers the information necessary they typically can give a contingent approval and a preliminary quote. This quote is composed of the interest rate, points and any fees (such as processing or underwriting) they will charge. The next part of the conversation will be the borrower asking important questions. Some questions a borrower ought to ask a potential lender are: How long do you take to fund? Do you impose prepayment penalties? How long have you been in hard money lending? Are you a direct lender or a broker?

3. Apply— After you have chosen your lender your next step is to apply for the loan. The Arizona Hard Money Loan is very straightforward. You will have to provide documents such as: tax returns, bank statements and proof of your assets. Once the borrower is approved, the lender begins preparing loan disclosures. Some of the documents the borrower will receive are the Fair Lending Notice and the lender’s privacy policy. After the required disclosures have been received, signed and returned, the lender will prepare the loan documents. These documents typically include: Deed of Trust, Note and escrow instructions.

4. Down Payment and Escrow— After all documents have been received the borrower will send their down payment (if one is required) to escrow. As soon as escrow has verified, they have everything needed from the borrower the lender will fund the loan.

WHY USE A HARD MONEY LOAN?

There are numerous reasons to obtain a hard money loan:

1. You credit score is not high enough and your income doesn’t meet traditional lender’s requirements.

2. You don’t have enough capital to cover the renovation of the property.

3. You have a property investment but don’t have time to wait on a bank loan process.

4. You want to purchase a Arizona Fix and Flip property.

5. You don’t have enough cash to purchase a property.

How do you determine if a Arizona Hard Money Loan is right for you?

If you don’t have the time to wait for a bank loan or your credit has declined, a Arizona Hard Money Loan can fund you and get that property in your hands quickly.

Monday, December 9, 2019

How TO GET RENTAL PROPERTY LOANS WITH BAD CREDIT

The American Dream is defined as “the ideal that every US citizen should have an equal opportunity to achieve success and prosperity through hard work, determination and initiative.”

Many people believe that the best way to reach that dream is through real estate investments—specifically, rental properties. The most frequent obstacle that gets in the way, for potential investors, is poor credit. Have no fear—the American Dream can still be yours even with bad credit. There is a way around pretty much everything and that includes less than perfect credit.

Very few people have the liquid assets to buy a rental property with cash—that is why conventional bank loans are used. Unfortunately, bad credit means bank loans are not an option. The best loans typically come from a traditional mortgage—these loans will give you the best rates and longest terms. This makes them the most affordable choice. But, if you don’t have superior credit and enough monthly income a bank will deny your loan request. If you want multiple rental properties it is highly unlikely that you will be approved for a conventional loan. Banks are uneasy when it comes to rental properties because there is always the chance that the home will be vacant; that means the investor will have to cover the mortgage. So, without a tremendous amount of monthly income it is most likely a bank will turn you down—even with gold credit.

FIND YOURSELF A HARD MONEY LENDER

Veteran investors know hard money lenders are the avenue to take when financing rental properties—not only for investors with bad credit, but also for the quick approval and flexibility of loan terms. Hard money lenders are private individuals or groups who invest cash for real estate ventures. These lenders extend loans based on property not the individual borrower’s credit.

Because hard money lenders don’t have to adhere to federal and state regulations and policies they can lend money to any borrower they see fit. The hard money underwriting is also not nearly as rigid as a conventional bank; therefore, speeding up the approval time. Most borrowers will receive an approval within two days—unlike a bank loan that can easily take up to 45 days—even without any hiccups.

Many Americans have given up on the American Dream; but don’t give up. With the right lender to guide you, you can live the American Dream—and investing in real estate is the only way to go.

Sunday, December 8, 2019

ARIZONA FIX AND FLIP LOANS

Everywhere you look people are flipping houses and making a killing. It is the newest craze! I’m quite sure you’ve wondered if it’s too good to be true—how many people truly succeed at flipping houses?

Flipping houses involves two tangibles: a distressed property and money. It is a risky endeavor, as all investments are—but the payoff can be a highly remunerative move. If you are thinking of flipping a home but don’t have the finances there are options for you. The first move is finding the property.

Finding Property— The best tool for searching property is the Multiple Listing Service (MLS). It is a database put together that lists all the properties for sale by geographic region. Only licensed realtors have access to the MLS. If you do not have access to the MLS there are other sources with information about homes for sale. There are numerous sites such as realtor.com, zillow.com and trulia.com—and that is only a few of the sites available to anyone—for free. You can also search for listings by individual brokers. If you happen to be a cash buyer auctions can be a fruitful opportunity to find property with a large discounted price tag. However, if you need financing a hard money lender is absolutely your best option.

WHY HARD MONEY WORKS FOR ARIZONA FIX AND FLIP LOANS

Conventional loans require a large down payment—usually between 20-25%. Keep in mind, that loan will only be for the property. You will still need capital to cover the expenses related to the rehab of the property. In a Arizona Fix and Flip scenario a conventional loan just doesn’t make sense.

Arizona Hard Money Loans are issued by hard money lenders. These loans not only offer easier qualifications compared to other loan options—they also have lightning speed approval time. You can get a conditional approval in less than 10 minutes and funding within two weeks.

Where the bank typically requires at least a 650 FICO score, a hard money lender can show more flexibility with their lending requirements. A hard money lenders focus is primarily on the value of the property that will serve as the collateral for the loan and the equity the borrower has in the property. This is why a hard money lender is not overly concerned with a borrower’s credit history or monthly income.

There are numerous benefits of flipping houses—making a quick profit, gaining experience, increasing your network and learning about real estate market.

Find yourself a lender you feel comfortable with and ask questions during your meeting. Ask your lender questions such as: are there other fees you will be required to pay, are there early payment penalties, are they a direct lender or a broker, how long have they been in the business, how often have they foreclosed on a lenders property? Get to know your lender and get the best Arizona Fix and Flip loan terms you can. Finding the right lender opens a large door of opportunity when it comes to flipping houses.

Saturday, December 7, 2019

5 REASONS TO USE ARIZONA HARD MONEY

There are a plethora of reasons to use Arizona Hard Money Loans, the top advantages being speed and flexibility. With that in mind, Arizona hard money loans are a financing tool all investors should utilize.

Choosing a lender for your investment is an extremely important decision. Make sure your lender can accommodate your needs before signing on the dotted line. Listed below are some of the top reasons Arizona Hard Money Loans are becoming more and more popular for investors.

1. Flexibility— Conventional Bank loans are known for their rigid regulations. These regulations often prevent borrowers from acquiring approval. Hard money lenders have their own criteria for approval, but it is much more lenient than a traditional bank loan. For example, most banks won’t even entertain a borrower with a credit score below 650. Although your typical hard money lenders want to see borrowers in the mid 500’s, there is flexibility.

2. Faster Approval—Applying for a conventional bank loan requires lengthy applications and it can easily take weeks to hear if you are approved. With a hard money loan borrowers can receive a conditional approval within ten minutes. Waiting weeks to hear if you are approved means your property could be taken by another buyer. Once a borrower is approved the loan is typically funded within two weeks. Bank loans can take up to two months even with the process runs smoothly.

3. Simpler Underwriting— As rigid as the banks are with their regulations, their underwriting is just as strict. Conventional lenders have exact underwriting guidelines that are based on loan size, location and market trends. Because hard money lenders are private institutions, they are not restricted to any specific guidelines, meaning that they are allowed to approve any project they see can benefit them.

4. Make the borrower’s offer stronger— Using an Arizona hard money loan will strengthen your offer. If a property has more than one offer, and those buyers are using conventional loans, a seller will gravitate towards the buyer with a hard money loan. Why? Anyone involved in real estate knows about bank loans; it is not uncommon for a bank to pull the loan during escrow. Hard money lenders are known as being solid lenders, which helps make sellers more comfortable and secure in their deals.

5. No Prepayment Penalties— Conventional bank loans will penalize a borrower for paying the loan off early with excessive fees. They want to collect all their interest; paying a loan off early deducts that extra interest that the loan accrues. Hard money lenders don’t penalize a borrower for being successful because they want you to succeed. They will set up your loan with no prepayment penalties.

Building a relationship with borrowers is at the top of a hard money lender’s agenda.

Flexibility, faster approval, simpler underwriting, helping a borrower’s offer become stronger and no prepayment penalties are all great reasons to work with a hard money lender instead of a conventional bank, but the most significant reason is building a trusted relationship with an individual. You will know your lender and they will work as your partner. This personal relationship allows them to accommodate your needs much better than a bank.