Real Estate Investing: Using Texas Hard Money Loans For a Fix and Flip

Fixer-Upper Budgets using Texas Hard Money

If you’re working on a fixer-upper, the budget starts to grow when you consider the renovations you’ll need to make. According to most experts, you should add 20 percent to your estimate for the final cost. If you overestimate, you get a surprise windfall — but if you underestimate, you get stuck with unexpected bills.

HOWEVER MANY OF THESE COST CAN BE BUILT INTO AN TEXAS HARD MONEY LOAN.

Structural improvements — like plumbing, electrical, insulation, pest control, and HVAC — are typically the least sexy but most important improvements a flipper can make. New hardwood floors and coat of paint may get buyers in the door, but a termite problem can kill a deal quickly. If your technical skills are lacking here, you’ll have to figure in the cost of labor, too.  Most real-estate agents advise fixing up the kitchen and bathrooms for the best return on your investment. In addition to the structural changes, this can include new cabinetry, counters, hardware, sinks, backsplashes, appliances, floors and lighting. Kitchen upgrades can be expensive, but they make a big impression like granite countertops and wine storage, for example. You could also decide to go green, which can add value to the house when the improvements are marketed as money-savers. Obviously, you’ll keep costs down if the house is in good structural shape and just needs updated paint and carpets — but things can quickly get pricey, especially if you’re using contractors and outside labor.  Again in Arizona make sure to utilize an Texas Hard Money loan to help get the funds to pay contractors and outside labor.

Texas hard money

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

Hard Money Lenders Texas - The Basics

Hard money lenders Texas – the basics

So let’s talk about some of the many benefits to a hard money loan. But first, let’s go over the basics. You may recall that a hard money loan is a form of asset-based borrowing that deals with real estate financing. Some borrowers also pursue Texas hard money loans when their financing needs are more pressing and when more traditional and conventional financing sources cannot respond.

SO, IN MANY CASES A HARD MONEY LENDERS TEXAS WILL OFFER A SMALLER LOAN SIZE BASED UPON A LOWER LOAN TO VALUE RATIO. THIS ONLY MEANS THEY MAY OPT TO LOAN NO MORE THAN 65% OF THE PROPERTY VALUE. THEREFORE IT IS MORE COMMON FOR REAL ESTATE INVESTORS TO OFFER ADDITIONAL REAL ESTATE AS COLLATERAL IN ORDER TO OBTAIN A LARGER LOAN AMOUNT. THIS IS KNOWN AS CROSS-COLLATERALIZATION. ADD THAT TO YOUR GLOSSARY.

Then, it’s simply a matter of contacting them with your idea or offer of investment. They’ll invite you into their office where they’ll give you free donuts and make you feel at home so when you discuss all the grimy details of this loan type, you don’t feel uncomfortable.

Don’t think too much when dealing with these types of loans. Remember, they are designed to be simple, even when they cost a little more than the average guy down the street. Furthermore, don’t let yourself be worked around by people who use a bunch of fancy words to confuse the snot out of you. You want your hard money lender to be someone you can trust just like your friends, because you’re dealing with some very risky number crunching.

hard money lenders Texas

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

Bad Credit Home Loans Texas: How to Make Money with Hard Money Loans

If you have bad credit you most likely think that real estate investing is impossible. However, with bad credit home loans Texas and hard money lending there are options for individuals with bad credit to take advantage of real estate investment opportunities.

Most financial experts will tell you that real estate is a sound investment. Real estate has consistently earned money over time and is a way to help build your investment portfolio and personal wealth. However, for many individuals with bad credit, real estate investing has been beyond their reach using traditional loans. Approximately 42.5 million Americans have a bad credit score and are considered sub-prime borrowers. If you are in the market to start real estate investing but you have bad credit, there are a variety of bad credit home loans Texas mortgage brokers recommend.

One type of loan available to sub-prime borrowers is a hard money loan. A hard money loan is a specialized type of real estate backed loan. The lender is an investor or group of investors rather than a bank. The lender offers short term capital loans to purchase investment properties. The term of a hard money loan is generally no more than two years and is designed to make money on real estate for both the borrower and the lender. Hard money lenders focus on the value of property being purchased rather than the assets or credit score of the borrower. For this reason a hard money loan is an invaluable opportunity for an investor looking for bad credit home loans Texas mortgage brokers recommend to purchase a property as a short term investment. 

Hard money loans are available for all property types including commercial, residential, multi-family, and even land loans. Each lender or group of lenders determines the requirements for what types of loans they will give as well as how much money they will lend. If the lender gives loans on residential properties he/she/they are required to be licensed through the National Mortgage Licensing System (NMLS). In order to sure that the lender you are using meets all requirements, it is best to use a broker or investment team that specializes in hard money lending. 

Hard Money Lending Regulations

Although hard money loans have significantly less regulations than traditional mortgages, there are certain federal regulations that apply to hard money lenders. For most property types, hard money lenders do not require the same income verification or credit score guidelines that traditional banks do. This is part of what makes them ideal bad credit home loans Texas residents with bad credit can use, as they look at the value of the property from an investment standpoint, not based on credit or income. However, it is important to note that hard money loans are more risky for the lender and therefore come with a higher interest rates. In addition, if you are taking out a hard money loan on a residential property, you will be required to some proof of ability to repay the debt. This means some type of proof of income though it is usually less stringent than what a bank requires. 

When you take out a hard money loan, the property that you are investing in becomes the collateral. If you default on the loan, the lender will seize the property to protect its investment. If you take out a hard money loan, make sure that you will be able to pay the loan back in full at the end of the term by either selling the property or other means. When you sell the property you keep any money that is earned above the amount of the loan and any accrued interest. 

Talk with a mortgage broker or investment company about hard money lending.

A financial professional or mortgage broker can help you decide if a hard money loan is a smart financial choice. It is a great way for Americans with bad credit scores to start taking advantage of real estate investing. In addition, hard money loans can benefit prime borrowers as well. If you already own a home you may not qualify to purchase an investment property based on your debt to income ratio. A hard money loan can be a great work around to get you into the real estate market. Call a broker or your financial adviser to learn more today.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

Texas Hard Money Lenders Give You The Options You Need!

Texas Hard Money Lenders Provide Options.

Since most banks and money lenders only take into account credit score, income, and employment when deciding upon approval, receiving a loan can seem like a monumental—impossible even—task to undertake. And, not only that, but traditional loans can take months to obtain. They can include a lot of hidden fees and fine print, leaving you in the dark and frustrated with the loan process.

That is not the case when you utilize the services of Texas hard money lenders. These lenders focus their services on the purchase of homes undergoing the process of short sales or foreclosures. That’s why they consider mainly the value of the property or home when deciding to approve a loan. They don’t worry so much about your credit score or employment history—they leave those things where they belong: in the past.

Texas Hard Money Lenders are on Your Side.

Like mentioned before, Texas hard money lenders are different than your typical financial institution. They won’t ask to see your pay stubs and you could literally be on your way with your loan in as little as 24 hours. Not only that, but that loan you’re walking away with could be up to 80% of the value of the home. This can be used for the purchase of any home or property, but these types of loans focus mainly on three areas: foreclosures, short sales, and fix-and-flip projects. Hard loans are a creative way to finance an otherwise impossible purchase.

Applying for a Texas Hard Money loan is easy.

You simply contact a hard loan company and they can connect you with a Texas hard money lender that will consider his or her options, and then often choose to invest in your project. Most hard loans are fairly short-term (about 6-36) months, but are specific and determined on a case-by-case basis. There are no application fees, closing costs, or consultation fees when you begin the process of seeking out an Texas hard money lender. They understand your circumstances and are willing to work with you—not against you—to achieve your dream.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

The Benefits of Texas Hard Money Loans

The Upsides of Texas Hard Money Loans

Many people view Texas hard money loans as a “last resort,” and tend to avoid them because of the negative connotation associated with them. The have developed this reputation because most borrowers who utilize these services have bad or limited credit and cannot be approved by a bank or other money lender. That usually means that they also tend to have higher interest rates than traditional loans, thus making borrowers wary.

However, there are more upsides to Texas hard money loans than there are downsides. For example, Arizona hard money lenders will go where traditional money lenders won’t. They will trust a borrower who has poor credit (or no credit at all), without asking for employment history or minimum income requirements. In fact, Texas hard money loans are equity-based, so they are more dependent on the property value than they are on any of your information. Texas hard money loans are an excellent option for short sales, purchasing foreclosed homes, and also fix-and-flip projects. They are a creative way for both the borrower and the lender to benefit.

Often times, lenders will lend up to 80% of the home value. In most cases though, this number is usually at least at 65%. The loans tend to be shorter than traditional bank loans, normally ranging anywhere from 6-36 months.

Getting Approved for Texas Hard Money Loans

Eligibility for Texas hard money loans couldn’t be easier to obtain. Since the loan is not based on the borrower’s credit or other personal financial data, those items are never taken into account. Hard money loans are based solely on the appraised value of the property, or the LTV (Loan to Value) ratio.

Still, it is important to maintain a professional persona when seeking approval for a Texas hard money loan. When consulting with a lender, be professional in dress and manner, have as much information on the property as possible, and a plan of action that you plan to use in repaying the loan. Be sure to make a document containing all expenses and plans for the hard money loan. It couldn’t hurt to include photographs of the home as well.

Sometimes, Texas hard money loans are referred to as “bridge loans,” meaning that they are necessary for short-term financing needs. Because the risk taken on the lender’s part is significantly higher than traditional banks (because they are not looking at the borrower’s ability to pay), interest rates tend to be a bit higher.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

Honest Answers to Your Top 5 Texas Hard Money Questions

Honest Answers to your Texas hard money questions.

If you’re thinking about a Texas hard money loan, you undoubtedly have questions. Listed below are five quick questions five honest answers to help you understand a little bit more about Texas hard money.

Five Texas hard money questions and answers

1. What is the interest rate on a Texas hard money loan?

This question depends on the lender. No two lenders are alike and will base their interest rates on a variety of factors. However, most interest rates on hard money loans will range from 10% to 18%.

2. What Loan-to-Value are lenders seeking?

Texas hard money lenders, again, will base this number based on quite a few factors. Most of the time, the LTV will be about 70% of the after-repaired value. However, this number can range anywhere from 65% to 80%.

3. What are the costs of Texas hard money loans?

All hard money loans are going to require a Title policy, insurance, and appraisal. These services do cost money--even up to a couple thousand dollars. Often times though, this will only cost a few hundred dollars.

4. Does my credit matter?

Yes and no. Your eligibility is not determined on credit, so having bad credit doesn’t hurt you too much. However, if you have decent credit, it can establish your credibility and ensure the lender of your ability to repay. However, the loan is based on the value of the property in the end. Many people seek hard money loans mainly because of their poor credit and inability to receive a lower-interest rate loan from the bank.

5. Do I have to put money down?

Yes, most of the time. Lenders want to feel confident in their investment, so they need to see that you have enough resources to cover the costs of the loan. Expect to pay a little bit out of pocket until the project is completed.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

Texas hard money lenders go where banks won’t

There are few things more disheartening than financial troubles. Worst case scenario is when you find yourself in a hole you know you can’t get out of. You may have had a difficult financial past, but that doesn’t necessarily predict your financial future. If you need a quick loan for a home or project and your bank or other money lending companies will not approve you, you can almost always count on an Texas hard money lender.

Texas hard money lenders take a significant risk in loaning their money out to borrowers. Not only do they loan the money to a complete stranger, they do not base the loan on your credit, income, employment history, or ability to pay. Hard money loans are strictly equity-based and they use the home you are purchasing as collateral in order to ensure repayment. Texas hard money lenders will loan to YOU, and they can get you your money in a matter of 24 hours.

Texas hard money lenders are on your side

Like stated previously, Texas hard money lenders will go where banks wouldn’t even consider. Obviously, they are you, the borrower’s, side. They want to help you out and will be willing to do so if they can see that your investment or project would be profitable in some home. Most Texas hard money lenders loan money for buying a foreclosed or short sale home, fix-and-flip projects, and other types of property or real estate investments. Needless to say, you can’t exactly go buy a new ferrari with hard money, but you can certainly put the money toward the home of your dreams.

Most hard money loans have a little higher interest rates than traditional loans. This is because, as mentioned before, Texas hard money lenders are taking a bit bigger risk by loaning to you without first checking your credit or other components of your financial history. However, these loans are typically shorter than other loans (around 3-36 months) so that higher interest rate does not add up quite as quickly. Remember that Arizona hard money lenders will often approve you for a loan of up to 80% of the property’s value (though this number is usually closer to 60%) in as little as 24 hours.

Dennis Dahlberg
Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:     (512) 516-1177 
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027