Setabay Private Money Lender: Private hard money

Showing posts with label Private hard money. Show all posts

Friday, August 3, 2018

How do Hard Money Lenders Differ from Each Other?

Know your lending options so that you are educated on what to expect when you’re ready to obtain that first commercial loan. There are several things to consider when evaluating hard money lenders.

The following are the varying differences you will encounter when obtaining a commercial loan:

· What is the loan to value ratio of your project? If the ratio is high, the more cash that you will receive for your project.

· What is the minimum and maximum loan amount of the lender?

· Are the hard money lenders that you’re talking with direct lenders (funds in house) or are they a broker? Brokered loans can delay delivery unless dealing with agents that have an extensive rolodex.

· Is the lender local or what geographic region do they serve? Where is your project located?

· What are the closing costs and interest rate?

· Can they close the loan quickly? Are they responsive to you and your project?

· Is the lender trustworthy and experienced in the type of project you are seeking to fund?

When searching for hard money lenders, a Google search will produce hundreds of options. Be sure to look for the following:

Experience. The lender you are talking with should have plenty of experience in the real estate industry as well as experience in the niche industry of hard money loans. An experienced lender will have knowledge in the specifics of hard money loans. The experienced lender will also have the knowledge of procedures and regulations that must be followed which will simplify the process.

Licensed. A hard money lender should hold licenses with state and local real estate bureaus and associations. If the lenders originate consumer loans, then they should be registered with Mortgage Licensing System (NMLS).

Rates and Terms should be Competitive. Look out for lenders who charge interest rates that seem too good to be true. This may be indicators that the lender you are talking with or negotiating with is either unexperienced or untrustworthy.

Transparency is Key

Some lenders will use a bait and switch tactic. Published rates that are very low are often used to attract novice investors looking for the best deal. In all communications, a reputable hard money lender should be clear and upfront about rates, fees and terms.

Quick funding is one of the most common reasons that real estate investors choose to obtain capital from a lender specializing in hard money.

You locate the real estate you want to invest in, your offer is accepted, and now the clock runs, and time is of the essence. You may be choosing this type of lender because of the time-consuming process a conventional lender takes to approve a loan. Then, of course, there is the massive documentation that is needed with a conventional lender. Hard money lenders are known to deliver the loan quickly. As many an investor will tell you, if you do not get the loan funded quickly, you may very well lose the deal. If the lender you’re working with cannot fund the loan in an expeditious manner, you may want to seek capital elsewhere.

Happy senior business man making his notes at work Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: private hard money lender,owner occupied home loans,hard money loans,hard money loan

Monday, January 30, 2017

Commercial Lending Requirements

Commercial lending despite its many incentives is no walk in the park. In other words, there are things you need to understand as well as have on-hand in order to move forward with the commercial lending process and future business endeavor.)

As you know, commercial lending wants start-ups and well-established businesses to succeed. However, just like any other kind of lending or financing, there are requirements and regulations. Therefore, if you trying your hand at securing commercial financing, it may be helpful to know what those standard requirements and regulations are.

For instance, as a savvy business owner, you clearly understand what collateral is and how can be used to secure any kind of financing. But, when it comes to commercial loans, collateral is only a requirement if you are a newer business or rather start-up. The reasoning behind collateral in this instance is the simple fact that start-ups do not possess a long credit history. Moreover, speaking of credit, it is important to note that even a well-established business may need to rely on or resort to the use of collateral because they simply do not meet the standard requirement for above average business and/or personal credit.

Furthermore, collateral in the commercial world of lending does not always mean your house or car. In fact, most businesses that resort to using collateral to secure commercial financing use their business assets such as their accounts receivables. What is more that often a company’s accounts receivables are not enough, thus if you go this route you will likely have to pledge your accounts receivable, a percentage of your inventory and possibly even your personal assets like your home or vehicle. Consequently, when the term collateral comes up in reference to commercial financing it is important to know what that really entails.

Commercial Lending Regulations

Of course, there is much more to commercial financing besides above average credit and the possible need for collateral. For example, you will not get too far with your dreams of commercial financing if you do not have a solid business plan. Sure, there are some exceptions to this rule, but you are really only hurting yourself in the long run if you do not take the time to devise a clear plan for your financing. Moreover, you will be hard pressed to find a lending institution that did not want to know what your projected plans were with “their money”. Therefore, it is safe to say that a business plan is more than a requirement. Similarly, if you are using collateral and disclosing your credit history, you need to have complete documentation. This means details on all things financial, accounts receivable, accounts payables, tax returns, and insurance documentation—just to name a few.

Commercial Lending - Your Eligibility

Ultimately, these are just a few of the long list of requirements and regulations that you will come across during the lending process, but, nevertheless, these are the major requirements of most commercial financial institutions. Thus, you should have these above-mentioned things together before you take your potential business venture any further.

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Technorati Tags: commercial real estate loan,commercial real estate lenders,commercial real estate lending,commercial lenders,commercial lendng

Sunday, January 29, 2017

Experienced Commercial Lenders Can Help Make Your Dreams Come True

When it comes to choosing from available commercial lenders, one of the most important things to consider is how much experience a lender has.

You have been working the same job for the last 15 years. You can pay the bills, keep food on the table, and take the occasional vacation (just nowhere too expensive). Life is good and comfortable, but it sure would be nice if it were better—right? Maybe if you were working for yourself rather than “punching the clock for the Man” it would be.

But opening your own business is a huge risk and take so much more than providing a service or product people want. Just the process—like when it is time to get a loan--involved with getting started can be overwhelming.

When it comes to commercial lenders, it may seem like a good idea to go with whoever offers you the best rates, but there is another, more important factor that should be considered—experience.

The Importance Of Experience Among Commercial Lender

The large nationwide company may be more familiar to you, and several people inside the building probably do have tons of experience. But chances are loans for small businesses are not serviced by the most experienced loan officers; or even the moderately experienced ones. So while the name on the building may give you a sense of comfort, the person you end up working with may not.

Yes, they probably must get whatever they do sign off on by a supervisor, but how much time does the supervisor spend reviewing every file his/her underlings produce?

When you look through the available commercial lenders in your area, don’t worry so much about the name on the door. Do your homework and see how much experience the person inside the door has.

Someone with experience and longevity in the industry can be a real asset for you. If the loan officer has been around for a while, then you can rest assured that they know what they are doing. Otherwise, they wouldn’t have lasted as long as they have.

With experience often comes knowledge. For someone just getting started in business, it helps to have someone on the lender’s side that knows what they are doing. That way you can receive some much-needed guidance on some of the financial do’s and don’ts. He/she doesn’t want you to risk going into default so they will likely do whatever they can to help—if they have the knowledge.

Experienced lenders are also less likely to waste your time. They will be able to tell pretty quickly what will work, what will not, and what can be salvaged with a little work. Wouldn’t it be great to know you are thinking is entirely off-base before you try to act on it and waste time and money?

An Experienced Lender Wants To Do Whatever It Takes To Close The Deal

Inexperienced commercial lenders want to close the deal as well, but if things get difficult or a roadblock appears, they may not know how to work around it or how to solve the issue. They don’t become experienced by giving up, but if they don’t know—they don’t know. Someone that has been around the block a few times will know how to get around an issue or work through it.

Technorati Tags: Commercial lenders,commercial lenders,commercial loans,commercial lending

Tuesday, January 17, 2017

Trumps Economy Is Going To Take Off! Get Ready Now!

Thing are going to happen..

Something is going on out there. Recently I've opened a new checking account at BofA for a small business venture, but I had one major problem to overcome. Something that I would have never expected. When I got to the bank they said "you will have to stand in line to open an account. " I asked my personal banker 'what's going on'? She said " did not understand what was happening, but since this morning there has been a steady stream of new customers coming into the bank and opening business checking accounts. I have never seen this much activity before".

Based on a recent Bloomberg report, Optimism among America’s small businesses soared in December by the most since 1980 as expectations about the economy’s prospects improved dramatically in the aftermath of the presidential election.

Being in business for 40 Plus years I hear this from my personal business associates. The consensus is that their feeling is '2017 is going to be a good year'. The share of business owners who say now is a good time to expand is three times the average of the current expansion, according to the NFIB’s data. More companies also said they plan to increase investment and keep hiring, which reflects optimism surrounding President-elect Donald Trump’s plans of spurring the economy through deregulation, tax reform and infrastructure spending.

Fifty percent of respondents, the biggest share since March 2002, said they expect better business conditions in the next six months. That was 38 percentage points higher than in November. The net share of firms projecting higher sales jumped by 20 points to 31 percent. Some 29 percent say they will boost capital outlays within six months.

The National Federation of Independent Business’s index jumped 7.4 points last month to 105.8, the highest since the end of 2004, from 98.4. While seven of the 10 components increased in December, 73 percent of the monthly advance was due to more upbeat views about the outlook for sales and the economy, the Washington-based group said. “

Rising confidence adds to the economy’s upward momentum,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York, said in a note. At the same time, the “NFIB membership appears to be disproportionately Republican, so it is possible that the data will start overstating strength, opposite the pattern during the Obama administration.”

The NFIB report was based on a survey of 619 small-business owners through Dec. 28. Small companies represent more than 99 percent of all U.S employers, according to the U.S. Small Business Administration. A small business is defined as an independent enterprise with no more than 500 employees.

“We haven’t seen numbers like this in a long time,” Juanita Duggan, president and chief executive of the NFIB, said in a statement. “Small business is ready for a breakout, and that can only mean very good things for the U.S. economy. Business owners are feeling better about taking risks and making investments.”

So now what do you do? What is your plan for the next 1-2 years? Should you invest in the stock market, hold cash, purchase real estate? Personally, I'm jumping back into the real estate rental market. But I'm being very cautious on what and where I purchase. I'm still licking my wounds from 2008.

Dodd-Frank will be changed. Only 3 new banks have been started since the 2008 crash. I remember when it would have been hundreds! Lending has been stagnant as local and regional banks are handcuffed to lend. What we have is constipation of the money pipeline due in large part to Dodd-Frank.

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.comhttp://www.Level4Funding.com
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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Saturday, January 14, 2017

Deed of Trust Definition - What is a Deed of Trust

What is a Deed of Trust? Deed of Trust Definition

Definition of A Deed of Trust (also know as trust deed) is a deed (piece of paper usually recorded at the county) that gives legal title to real estate to a trustee. It secures the note (Mortgage).

There are three parties to this type of title. They are:

The Trustor (Borrower),
Beneficiary (Lender) and a
Neutral 3rd part called the Trustee.

They are written so that the lender gives money to the borrower to purchase a real property (home) and the borrower signs a deed of trust giving the power of sale for property to the natural 3rd party trustee to be held in trust for the lender. (I like to think the trustee takes the Deed of Trust and puts it in the top drawer of their desk and waits.) The borrower owns the property, but the title is held by the trustee.

This is noted in the Deed of Trust and is called the ‘power of sale clause’.

Deeds of Trust Definition

Equity – our long-term Mortgage program is brokered at 60% of the after repaired value (ARV or LTV) where the goal is to have a fixed and rented home that more than covers the monthly payment..

Money Down – All of our professional real estate investors will have either personal funds or a spread of equity in the transaction serving as their personal guarantee and commitment that the Deeds of Trust payment is a priority

1st Deeds of Trust Only – Our investors are the only holder of the note and in first position

No Pooling of Funds – The Level 4 Funding does not pool funds (also called fractionalized Deeds of Trust). This gives the Deeds of Trust investor more control over the investment

Non-Owner Occupied Properties Only – The Level 4 Funding only brokers Mortgages for non-owner occupied, single family homes and units (1-4) to a very unique client, the professional Arizona real estate investor.

Appraisal – An estimated value placed on a property at a particular point in time. Also known as appraised value.

Beneficiary – The beneficiary is the lender that can be an individual or a legal entity. Also known in a Deeds of Trust investment as a private money lender.

Deed of Trust – A document signed by the borrower that, once recorded, acts as proof that a Mortgage has been made on a property.

First Deeds of Trust – The first in line of Deeds of Trust recorded on a property.

Hard Money Mortgages – given at a higher interest to reflect perceived risk and added convenience of speed.

Interest Only – No payments being made on a Mortgage are being applied to principal. The balance due stays the same.

Simple Interest – Its calculated using the following: (Balance Amount * Interest Rate) divided by 12. This gives you the monthly payment for interest only payments.

Mortgage to Value (LTV) – Is a ration is used to determine risk and equity position in a property. If the property us currently valued as it stands now at $100,0000 a Mortgage of $70,000 gives a LTV of 70% ($70,000 divided by $100,000). This should not be confused with ARV – After Repair Value.

Points – A percentage fee charged for origination of a Mortgage. One point is equal to one percent.

Promissory Note – The Promissory Note is signed by the borrower and shows the terms of the Mortgage.

Trustee – An individual or organization authorized to hold a trustee sale.

Trustor – The trustor is the borrower.

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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

Friday, January 13, 2017

Does Our Government Really Hate US? Really?

What's wrong with our economy?

One of the technical terms used when evaluating a healthy economy is a term called velocity of capital. What this means is how fast money is moving around from one person to another, or defined as "The velocity of money is the rate at which money is exchanged from one transaction to another and how much a unit of currency is used in a given period of time. Velocity of money is usually measured as a ratio of GNP to a country's total supply of money.”

As you can see from the above graph the Velocity is on a steady decline. So what causes the drop? My opinion is that there are two main reasons:

People (consumers) have stopped spending money. They are sitting on a boat load of cash and they are in a wait and see mode.
The second reason why there is a decline is that the government has put up road blocks to keep spending money. One of the biggest road blocks enacted are the Dodd-Frank Regulations that are making it extremely difficult for individuals to purchase homes.

When someone purchases a home it's not just the seller and buyer who are happy. There are those downstream of this closing that are going to be happy when the home closes. Typically the listing and selling agents are happy, but there are others who also benefit from this happiness and make a living off of the sale. Sure the buyer is happy, they have their dream home they always wanted, and the seller is happy since the can move to their next home, or maybe get rid of the current home. It's going to be a Happy, Happy, Happy fest. The agents who listed/sold the home can't wait till they receive the final HUD 1 is completed and the title company sends out the checks to the brokers. Most agents keep a list of the transactions in their pipeline and like most agents, their spouse is quizzing them on the transactions. My wife usually says, 'got anything closing this week'? She says this specially during the holiday season. I'm happy to say that yes!. This is going to be a good Christmas. However there are many others who will benefit from this transaction and will have a happy Christmas.

Title company and the title agent are getting something from this transaction, like title insurance & escrow fees.
The loan company, Loan Officers, Loan Brokers, Underwriters, support staff, company sales rep also benefit.
Home Inspectors, and termite inspectors are getting some of the money.
Handyman who will fix the conditional items from the homeb inspection also get a piece of the deal, and don't forget all the hardware stores will get a piece of this pie when the handyman buys a new faucet or other item to be fixed.
Tax payers benefit when home taxes are being paid in full with collections of future taxes.
Insurance companies are writing a new policy.
HOA's are going to receive a transfer fee and maybe impact fees.
Neighbors are going to be happy to see a new neighbor.
Disabled Vets are going to receive all of the stuff the new home owners are going to give away before they move.
Utility companies are going to get a change notice and if the account is past due, they are going to get paid.
Appraisal companies will get their piece of the pie also.

It is amazing when you think of all the people who will touch this transaction to complete the deal at all. BUT what's really startling is how many people will be able to keep their job, put food on the table and survive.

With all of this occurring, we should sell homes all the time, but I'm shocked by the road blocks our government has put in place to stop this from occurring. In an effort to fix the last collapse of the housing industry, the administration has generated a mountain of mind numbing regulations to stop consumers from purchasing a home. It's like passing through gates of hell to get a loan. We have gone too far in the wrong direction to fix the problem. The incoming administration has indicated that they are aware of this problem and is promising to fix the regulations ASAP. Let's get money flowing again!

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.