A. J. wanted more than anything to build her own houses from the ground up, designed to stand out, not be cardboard cutouts of each other. A degree in architectural design and years of work experience in a construction firm made her certain she could do it if she had the funding.
But it seemed that A. J. was the only one who held that opinion—every reason for being turned down seemed to appear as she went from banker to mortgage company to credit union. Her credit score was middling, her credit background was non-existent, a co-signer was required, etc. She began to wonder if the idea really wasn’t that good.
“File 13,” her assistant told her after lunch one day, handing her a brochure. “We don’t do business with these folks.”
She glanced at the brochure—it was an advertisement for a private lender who set up new construction loans in Arizona for individuals who couldn’t go through the traditional routes. She slipped it in her briefcase and that night began researching these types of lenders. They were respectable people, it seemed, with projects built by their money scattered all over the state with no problems arising after completion for whatever the builder had in mind.
The advantages of such funding—basically a short term loan that financed construction of real estate investment property—were attractive.
Private lenders could fund quickly, sometimes within a week, something that traditional lenders could not. This included application time, another hitch with the conventional funding.
A new Arizona construction loan backed with Arizona hard money could be designed to fit the borrower whereas regular lenders tended to go with one structured approach.
Background was not so important here as was the ability to pay back the loan and how much equity there was in a property. Lack of certain documents or a past negative blimp in credit didn’t seem to matter so much with the private lenders.
The disadvantages of this type funding were not attractive, however—they made one think, but they were understandable.
Collateral generally meant a borrower’s house—if default occurred, the lender took and sold the home. Interest rates and fees were much higher than conventional loans—she could end up paying the principal and almost a fourth of the total in interest with some arrangements. These, along with the collateral, kept the lender’s risk percentage down.
The repayment periods were short causing the monthly payments to be higher. Restructuring the budget would be necessary.
Ellis is now the builder for a subdivision of well-thought-out houses with individually attractive features. She took time to understand what she was taking on, found a lender she could work with and turned her ideas into reality with a new construction loan designed just for her. With that plan in mind, your own project could become more than words on paper.
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.
Copyright | Privacy Policy | *Terms & Conditions
No comments:
Post a Comment