Setabay Private Money Lender

Tuesday, January 14, 2020

Arizona Fix and Flip Loans: Hard Money v. Conventional Loans

Looking for money? Are you eligible to receive a conventional Arizona fix and flip loan?

Though difficult to acquire for many flippers, mortgage loans present opportunity for borrowers possessing the following:

· High credit scores: Creditworthiness is a big indicator for conventional banks. They will want to see a borrower’s track record in regard to Arizona fix and flip loans. Has the borrower payed bills well in the past? Has the borrower had any delinquencies such as missed payments? Have there been any foreclosures or repossessions? Essentially, to the banks, credit history indicates the risk of loaning.

· Favorable debt-to-income ratios: This is the total debt figure divided by income. Banks use this ratio to calculate if a potential borrower is able to make payments, especially after adding any requested loans. Max debt-to-income ratio for conventional banks tends to hover between 40%-50%.

· Considerable or significant assets: Collateral is another crucial factor for receiving a conventional loan. What types of assets, general property or equity in property, does the borrower possess? Is the proposed collateral enough to buffer the lender in the unforeseen event of foreclosure?

· Completed jobs: Conventional lenders look for a history of profit, repayment, and success as good omens. What is the borrower’s track record? Has the borrower been able to repay previous flipping debts?

If the borrower has a favorable history in many of these areas, he or she is more likely to receive funding for Arizona fix and flip loans. The upside to receiving a traditional home loan is, for one, a very low interest rate, some of the lowest. On top of this, the loan-to-value (LTV) can reach up to 80%. On the downside, conventional Arizona fix and flip loans may not be a great choice for individuals who are new to the fix and flip market and thus have a limited amount of completed flips.

Do to the drawn-out nature of submitting and reviewing credit applications, typically taking months to complete, conventional lending presents complications for those looking to bid on wholesale, foreclosed, or short-sell property, which may need a quicker source of financing to acquire. Finally, the challenge of acquiring distressed or hazardous property—conventional lenders are typically interested in property that can be lived in. If there is neglect, structural issues, or other issues that prevent this, the bank is likely to withhold funding.

Rotten Credit? Hard Money Arizona fix and flip loans May Be an Alternative

Though many potential borrowers do not fit the rigorous credit archetype delineated by conventional lenders, there are still other options. Arizona Hard Money Lenders have formed a safe haven for entrepreneurs possessing a rocky credit history, limited experience, or limited assets. They have also provided opportune funding for those looking to purchase property quickly.

Bad credit, limited experience, or few assets?

Hard money Arizona fix and flip loans may be right for you.

Need help flipping a home? To receive more information regarding hard money lending, talk to a hard money broker today at Level 4 Funding.

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.

Monday, January 13, 2020

Secure Returns: Loans to Flip Houses in Arizona Help Flippers Earn More Money

Need cash to get into the flipping game? Hard money loans to flip houses in Arizona may be right for you.

Flipping homes offers many benefits to real estate investors. One of the main appeals to flipping houses is it offers investors a return within a short amount of time. Within a few months to under a year, investors locate, purchase, and renovate a property presenting a return potential. The return on investing in a flip home is large, usually close to 50% and sometimes even higher. Not bad.

But where do flippers start? Typically, investors purchase properties during a booming housing market, a time when real estate prices are on the rise. (Like right now, when flipping is at its highest since the mid-2000s.) The rising cost of homes indicates a rise in equity and an increased possibility of a good return. With this in mind, flippers tend to find distressed property in a neighborhood where renovated homes are selling well. They will do their homework and look at the “comp” or comparable sales. After locating a distressed property, flippers take into account the “perceived” renovation costs, how much will renovation cost to receive a return similar to that of other renovated houses in a given neighborhood. The trick is finding a property that would hypothetically receive a greater return for less work. Renovations could be as simple as reflooring, landscaping, and painting a few rooms. Other times, it might be necessary to delve into more complex renovations to receive a return. Either way, the main questions remain: Do the ends justify the means? Can a decent profit be made for all of the labor? If yes, “you may pass GO.”

So, a flipper has found a house, done the homework, and taken into account all of the perceived costs. Great. The next step is funding. Since many Americans don’t have too much cash to blow, funding is a very important step. To finance their projects, flippers often go to lenders, generally ones that gives loans to flip houses in Arizona.

Arizona Hard Money Lenders Offer Less Restrictions for Those Looking for Loans to Flip Houses

Arizona Hard Money Lenders typically grant loans to flip houses. This is due to the fact that conventional lending is practically restrictive when it comes to loaning to real estate investors new to the business, with low credit scores, and with a history of subprime credit or past delinquencies.

Cut through the red tape! Talk to your hard money broker to get loans to flip houses in Arizona today.

For this reason, many new flippers enjoy the face-to-face, hands-free approach to hard money loans to flip houses. They find it a way to cut through the red tape of bureaucracy and start their new path of securing the returns that they need. If eligible, rates may start as low as 7.99% for terms extending from 3 to 60 months. Applications processes are short. Funding up to 90% LTV is available through certain lending programs for borrowers meeting collateral requirements.

Sunday, January 12, 2020

Avoid Putting Cash Down: 100% LTV Commercial Real Estate Financing for Your Business

100% LTV Commercial Real Estate Loans Help Businesses Maintain Cash Flow.

The supply and demand, the wax and wane of the market. Day in day and day out, you’ve ground out a living building a business on main street America. You’ve done the time and the homework; you’ve put in the hours to build a business from the ground up. Now, you want to expand your operation. You’ve seen your profit potential and are happy where things sit. However, you know that you can create more and have reached the point of wanting more property to create more profit. Perhaps, you’ve got the money to do it, but perhaps you don’t want to cut into your cashflow—the beating heart of your organization and many investments.

It takes money to make money, and you have money. But, you understand that keeping cash flow intact and borrowing money in order to acquire more property creates less risk. Also, it may present you with a better chance of dealing with the inevitability of market shifts.

You look to conventional lenders but seem to have been rejected due to previous credit history, federal restrictions on property acquisition, or other cumbersome stipulations. After a bit of research, you come across information relating to 100% LTV Commercial Real Estate Financing. Questions enter your mind: What is it? Do you qualify? What are the requirements and respective rates for such a loan?

Can You Qualify for 100% LTV Commercial Real Estate Financing?

After doing a few more Google searches, you come to understand that 100% LTV commercial real estate financing is made possible with Arizona Hard Money Loans, and you see that hard money acquired by leveraging equity in real estate possessed by a business or business owner. While traditional lenders have a hawk’s eye for looking at an individual’s creditworthiness, credit history, or compliance with the hoard of federal lending requirements, you see that Arizona Hard Money Lenders are able to base loans on real estate value rather than credit. The catch is that you must have a significant amount of equity built into your collateral, either by owning property out-right, having a considerable increase in positive equity, or having equity that is greater than the loan amount to be requested. Without the proper equity, you realize that you would have to have a sufficient amount of cash down to buffer the hard money lender in the unforeseeable advent of foreclosure.

Talk to your hard money broker and see if you qualify for 100% LTV commercial real estate financing.

The good news is that you have built up a considerable amount of equity by paying off nearly all of your business’s property. On top of that, the recent rise in real estate prices has considerably increased the value of your equity. Nice! Now the next step is getting a hold of your hard money broker or lender to find out if your property qualifies you to receive 100% LTV commercial real estate financing.

Saturday, January 11, 2020

How Does ARV Determine Risk for Arizona Hard Money Lenders and Borrowers?

How does ARV influence the lending process?

When Arizona Hard Money Lenders consider granting a loan amount, they generally consider LTV and ARV. These two indicators help them analyze equity, risk, and return.

First, there is LTV. LTV is a loan-to-value ratio used to determine the amount of money a lender will lend. For example, say a home is worth $100,000 in each market. A borrower receives an acquisition loan from Arizona Hard Money Lenders for $50,000. In order to acquire the property, the borrower must match the lent amount of $50,000 with $50,000 of his or her own money. This establishes the LTV at 50%. Should, God forbid, the borrower fail to pay the lender and the property is foreclosed upon, then the lender will be buffered from loss upon liquidating the asset.

ARV, or after repair value, calculates the value of a distressed home after renovation. This ARV value helps Arizona Hard Money Lenders determine risk and equity regarding a property not only by understanding the current loan-to-value (LTV), but by looking at the after repair value (ARV). ARV is calculated by adding a property’s current value plus the value of renovations. To do this, one looks at the average price of similar homes in a neighborhood. These homes should have similar acres, rooms, features, and amenities. After this, the cost of renovating the house is evaluated, and finally the prices of renovated properties in the area are taken into account. As an example of this, say that there is a house worth $50,000 in a given neighborhood, and it will only cost $20,000 to repair it, summing up to $70,000 in total costs. However, after the renovations to the house, the property will be worth $100,000. This puts the ARV of the home at $100,000. The hypothetical profit is $30,000.

How Both Arizona Hard Money Lenders and Borrowers Benefit from ARV

Arizona Hard Money Lenders use ARV to set a cap for the amount they are able to lend. Generally, 70% of ARV is the maximum loan amount for Arizona Hard Money Lenders. Lending out more than this amount creates far too much risk for lenders. Nonetheless, the ARV establishes a ballpark idea of what lenders are able to lend by understanding how much is too much.

What is the maximum amount Arizona Hard Money Lenders will loan?

Aside from lenders, LTV and ARV help real estate investors calculate how much they can expect to receive from a hard money lender, how much they will need to put down, and how much risk they will face when trying to secure a profit. After looking at the figures, real estate investors will have a better idea if the investment is worth it to them. Will it give a good return on what they have put in? Will there be enough buffer room for them after the lender gets a cut of interest? Are the efforts of producing the renovations and marketing the property worth it in the end? Risk is at the heart of lending and borrowing hard money.

Friday, January 10, 2020

How to Get Started with Arizona Construction Loans

If you’re building a new home or business, you’ll be looking for Arizona Construction Loans rather than mortgages. Get to know the basics beforehand, so you can move forward without delays.

Contrary to popular belief, getting approved for Arizona Construction Loans isn’t necessarily difficult, but the process is different than going to get a traditional mortgage. People use them all the time when they’re building new structures or doing major renovations, and you don’t need to have perfect credit or be a builder to get one.

Before you attempt to get approved, though, you’ll want to make sure you have three key things in place; the plans, a comprehensive budget, and permits. In other words, if you aren’t a builder or a contractor, you’ll need to have one on your team before you get started. All aspects of the build will need to be outlined with estimates from the contractors or subcontractors who will be handling each task. The plans will also be necessary to get permits, and the permitting process usually takes a few weeks by itself. Having an experienced contractor pays off here because someone who routinely works in your area will know exactly what the review process entails and what inspectors are looking for, so permits are issued promptly. However, the permitting process can stretch out longer if there are questions or if the project is especially complex.

You’ll also want to take some time to get your finances in order beforehand. Depending on how you go about getting financing, you’ll need to address how you’ll make a down payment, check your credit score, prove financial strength, and demonstrate that the build will be a financial success.

Find Out What Form of Lending is Right for You Before You Begin

It’s difficult to get Arizona Construction Loans through banks because they don’t make a whole lot of profit off them, and so they heavily restrict who they’re willing to lend to. You have to be an incredibly low-risk borrower in order to get approved, and even then, the terms might not be great. That doesn’t mean a bank won’t help you, only that it’s worthwhile to explore multiple funding options before your start paying for plans and permits out-of-pocket.

If banks won’t help, you can get your project off the ground with hard money.

One alternative to bank Arizona Construction Loans is hard money. With this method, you’ll still need to have some of your own cash in hand to get started, but you can get up to 90% LTV. Best of all, you can make interest-only payments on the loan during construction, and then either sell the property or approach a bank for a conventional mortgage after the build is complete, when they’re much more likely to help you out. You’ll still need to have plans, a budget, and permits to qualify, but things like your personal credit are less of a concern with hard money, so it’s much easier to qualify and get your project moving forward fast.

The Pitfalls of the Past: Dodd-Frank and Arizona Hard Money Loans

How has the Dodd-Frank Act influenced Arizona Hard Money Loans during and after the Great Recession?

It’s the mid-2000s. The housing market is on the rise as the price of homes increases. Due to this favorable uptick, more people are looking to acquire loans to buy houses. Lucky for them, there are less banking restrictions, and many people with subprime credit are getting funded. It seems great. The housing market continues to boom. Prices continue to rise. The economy’s strong. All of a sudden, Freddie Mac won’t accept dicey, subprime mortgages. This decision leads to peril for some major lending institutions who find themselves unable to get returns on their investments. Bankruptcy soon follows. As banks struggle and closely watch subprime borrowers, indirectly, the value of homes begins to fall. More banks go under, the housing market collapses, and the stock market takes a nose dive. Cue the Great Recession. So, in attempt to learn from history, or avoid the fate of repeating history, what does the government legislate? Answer: the Dodd-Frank Act.

Dodd-Frank changes the lending game, especially regarding Arizona Hard Money Loans. A portion of the Dodd-Frank Act lays out the Mortgage Reform and Anti-Predatory Lending Act. This act restricts the circumstances in which Arizona Hard Money Lenders may lend money to individuals desiring to purchase personal residential property. Other restrictions for residential loans are added as well. Those giving out Arizona Hard Money Loans must verify if the borrower is able to repay their loan.

As a result of this, Arizona Hard Money Lenders shift to focus on investors looking to rent, sell, or commercialize real estate. Mainly because the Dodd-Frank Act does not limit businesses in regard to hard money, instead, it is interested in protecting the US economy from experiencing another subprime and residential lending apocalypse.

Post Dodd-Frank: Arizona Hard Money Loans

While this creates challenges for individuals looking to receive help after struggling with bankruptcy, subprime scores, or foreclosure, it has become a boon for real estate developers, especially where conventional lending was scares in the past.

Who are some of the main recipients of Arizona Hard Money Loans today?

So, post-Dodd-Frank, if residential lending is limited, who uses Arizona Hard Money Loans today? Well, to start, flippers use Arizona Hard Money Lenders to finance renovations on outdated homes. Many flippers use hard money to cover acquisition costs of property. Other flippers purchase property with their own money and use Arizona Hard Money Loans to cover the cost of renovation, or a particular portion of renovation such as roofing, cement, or plumbing. After completing the flip, the property goes to market, hopefully bringing in a good return.

The next category of individuals is those who are looking to renovate to rent property. These individuals, like flippers, use Arizona Hard Money Loans to acquire properties or finance costly portions of the renovation process. Once the property is completed, it is marketed to the public in order to rent. After this category of borrowers, there are contractors who look to build and sell property and businesses that look to expand their property or projects.