Texas Hard Money Lender

Friday, August 30, 2019

Two principles to Avoid Wasting Renovation Loans

If your in new to the flipping business you need to know that just because you add a feature, doesn’t mean you add value. This article will outline two general principles so you can avoid wasting renovation loans on frivolous fixes.

First, what is a frivolous fix? Its any feature that isn’t common to homes nearby or that could narrow your pool of potential buyers.

You might think its a good idea to start knocking down walls, add in a cute little breakfast nook, or an office with built in storage solutions, because you’ve seen these sorts of things in magazines.

But whats your goal to make a pretty house or to make money?

To make money of course, so heres some principles that can help you avoid wasting money.

The first principle is don’t spend Arizona renovation loans on unnecessary projects.

The first principle is to plan your project in line with the realities of the market. For example, if homes nearby are selling for a hefty sum and they happen to have walled off kitchens, don’t waste your time and energy redesigning the homes interior.

I know almost every episode of any “flip or flop” type show begins with discussions of extensive layout modifications. Almost without exception, walls are knocked down, living rooms and kitchens joined, because only open concept houses sell right?

Not necessarily, while it might seem painfully retro to sell a house with a closed off kitchen, if houses nearby with similar layouts have sold for a decent amount, knocking down walls is a waste of time and therefore money. The more time you waste on unnecessary projects the higher your loan payments will be.

Remember your not an architect or an interior designer, your a flipping a house, it doesn’t need to be magazine ready it just needs to sell.

In addition, certain renovations might look pretty, but could have limited appeal, so along those lines,

The second principle is don’t spend Arizona renovation loans converting rooms

When it comes to a rehab the end result should leave as much to your buyers imagination as possible.

Because when buyers comb through online home listings whats the first thing they look at?

The number of bedrooms and bathrooms. So converting any room for a fixed use, or adding any sort of built in furniture is generally a bad idea.

You might think its a good idea to install benches in place of a kitchen table or to add a built in desk in a cute little home office, but buyers will only see a headache if they plan to use the room for something else.

Buyers can overlook your poor choice in paint color. But they might not be so quick to forgive one less bedroom than another a nearby home.

Projects that limit the use of different rooms could cause your home to sit on the market for weeks as you wait for that one special buyer who might need a home office or who wants a kitchen table that will take a week to move. The longer it takes to sell your home, the longer you’ll be making loan payments which will lower your profits.

So remember your not a designer, your an investor and your goal in the end is to make money, and if you follow the above two principles you can avoid wasting money.

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.

Why trust deed investments are a better bet than stocks

With trade wars escalating and stocks more volatile than ever, you might be wondering if theres a safer way to invest your money. Well there is-its called a trust deed. Learn what trust deed investments are and why they’re a better bet than stocks, especially in these uncertain times.

First what is a trust deed?

A trust deed is basically a mortgage where you as an investor act like the bank. You give a loan to real-estate developer, and In exchange for your investment, the developer pays you back on a monthly basis.

This arrangement might sound sketchy but just think for a moment when you invest in a stock do you actually know what your investing in?

Because trust deeds are secured by real-estate you can make a more solid investment

Because it’s familiar you might think the stock market is a safer bet but ask yourself a few questions-

• Do you know what determines a stocks value? No, because no one can say what a stocks price will be in 5 minutes. Even if have a masters in economics, you cant definitively say what a stock is worth.

• Do you know when a stocks value is going rise or fall? No,Stock prices rise and fall based on the news of the day and the hot air spewed by analysts. One bad news story or a vague tweet could send a stocks price plummeting.

• Do you know where the stock market is actually headed? Maybe. But lately its been all over the map.

In contrast, trust deeds are based on real-estate. Real-estate has a definite value that even an eight year old can understand. Everyone knows that a 100 square foot shack is worth less than a mansion. In addition, the price of real-estate is essentially based on supply and demand and lately the price of real-estate has been climbing, as the market digs itself out of the hole of the recession.

Trust deeds are hands off way to invest in real-estate, which makes them a better bet than stocks. Unlike stocks with real-estate you can understand valuations, you can pretty much say what the price of a given property will be tomorrow, and you generally know where the market is headed.

Still if your new to the idea of trust deeds, you might be wary. Well trust deeds are actually safer than stocks for the following reasons:

3 ways trust deeds beat stocks

Higher guaranteed yield: Trust deeds are loans with interest payments, usually in the high single digits. Basically you earn a guaranteed return on your investment every month. Stocks pay out paltry dividends a few times a year and even those aren’t guaranteed

Guaranteed return on initial investment- With trust deeds your pretty much guaranteed to make back your initial investment. Think about it can you just stop paying your mortgage? No. Even if a trust deed borrower stops making payments you have a protection stocks can’t offer

Right to recourse- basically you can foreclose and liquidate the borrowers property to make your money back.

So basically trust deeds are give you rights, protections and the potential for higher returns than stocks. If your still indecisive, think about it are you going to leave the value of your investment portfolio at the mercy of the presidents next tweet? Or would you rather earn a safe and steady income from a trust deed?

I’ll leave that for you decide.

The Benefits of Arizona hard money Business loans

If your business needs cash, but banks keep turning you down, theres one option you might not have considered-Arizona hard money business loans. Learn what it is and how it might just be the right help for your business.

First what is Arizona hard money? Arizona hard money is basically any loan secured by the value of a hard asset. This could be your storefront, some form of inventory or even your primary residence.

You might be asking yourself “isn't that the same thing as a secured business loan?”

Well, not exactly.

Heres a just a few ways conventional Arizona business loans fall short:

Banks give loans to business secured by collateral all the time, so how is Arizona hard money any different? Well banks also secure their loans based on your credit score which means their loans are:

• Hard to qualify for- Traditional business lenders only give funding to businesses with solid credit scores. So if you need financing to help improve your businesses’ cash flow, to help pay your bills and improve your credit score, a regular business lender wont help you.

• Inflexible: If you go to the bank asking for a loan to finance an investment that is even the least bit speculative your application is basically a no-go. The loan officer at the bank will likely put your business plan through the ringer. Even after they give you funding there will likely be limits as to how you can use that funding spelled out in the terms of your loan documents.

• Take forever—Banks will spend weeks if not months, sitting on their hands combing through the details of your application before closing your deal. So if you need funding to cover an unforeseen expense, going to a traditional lender is basically a waste of time.

Heres how Arizona hard money excels when compared to conventional business loans.

Unlike banks, Arizona hard money providers secure their loans solely based on the value of your assets, so credit is not a factor which means these loans are:

• Easy to qualify for: Like we said credit isn’t an issue, so if your business is essentially dead, Arizona hard money could finance an investment which could resurrect your balance sheet.

• Flexible: Arizona hard money providers wont restrict how you can use their funds. If you want a business loan to program a virtual reality store front, a Arizona hard money provider wont stop you. Whether a building a store in virtual reality is a wise investment is another question.

• Fast: If your all your inventory is currently sitting under six feet of water do you have months to wait on the banks ponderous application process? Probably not. Well Arizona hard money a quick appraisal of the property backing your loan is all thats needed to qualify. So Arizona hard money can help your business quickly get back on its feet in the face of an unforeseen disaster.

So if your business needs funding, but lacks a stellar credit score, you need funding for a speculative investment or you just need money quickly, Arizona hard money could be the help your business needs.

3 Reasons why Arizona hard money is best for rehab loans

A recent episode of flip or flop might have convinced you to start flipping houses. But as the credits roll you realize you have a problem, you don’t exactly have a stash of gold bars buried in the back yard, so to get started in the flipping business- you’ll need financing. Where do you start? This article will tel where not to go and where to go to get rehab loans.

Those just starting out in the flipping business might think that their local JP Morgan Branch office will finance their first deal. Why not, if you’ve planned your project carefully, have a decent downpayment and have a good credit score, why wouldn’t your local bank give you a loan to flip your first house?

Well there's really only one reason-

You cannot get Arizona rehab loans from banks.

Getting a rehab loan from a traditional bank is impossible. God himself might have spoken to you in a vision and said ‘if you flip it they will come,’ but still a bank wonk give you money for a flip. Period-end of discussion.

This is because banks fund their loans by selling their mortgages back to the government, which means a whole lot of bureaucracy comes into play when it comes to the condition of the home you intend to purchase. Basically any property you finance through a bank, has to be as close picture perfect as possible, and if you want to flip a house, this wont be the case.

So if banks don't offer loans to flip houses, who does?

Heres 3 reasons why you need to go to Arizona hard money provider first when getting rehab loans

Arizona hard money is a loan given by a private lender based on the value of the hard asset (i.e. The house you intend to flip). These sorts of lenders specialize in funding flips, its their main game.

You might be consider other ways to finance your flip, like going to your relatives, but heres 3 reasons why Arizona hard money is your best bet if you want to get into the flipping business:

• Property condition isn't a factor- The first house you want to flip might have one out of four walls left standing, but if you have a solid plan a Arizona hard money provider can still fund this sort of deal.

• No bureaucracy- Most Arizona hard money providers don’t answer to anyone but themselves. Without bank bureaucracy things like your down payment and interest rate are up for negotiation, which means you can get a better deal.

• Loan terms make sense for a flip- Arizona hard money is short term, with terms which don’t usually go over 12 months. No solid flip should take more than a year.

Speaking of loan terms, if you’re new to the flipping business you might see those double digit interest rates and be ready to spit up your lunch. In truth is, those high interest rates wont matter if your deal is good enough.

If you end up paying 2 K in interest, but earn 40 K in profit from a flip, a couple grand is nothing.

So in short if you want to start making money in the flipping business, you need Arizona hard money.

3 Tips to risk less when it comes to new construction loans

When building your dream home it’s easy to lose sight of the details especially when it comes to financing. While managing the day to day grind on the work site, the last thing you need to worry about is your loan. You wont have to worry if you follow these 3 simple tips to risk less when it comes to new construction loans.

The first tip is to have refinancing secured ahead of time.

These sorts of loans are almost always short term arrangements with terms usually no longer than twelve months.If you don’t plan on selling your shiny new house, you’ll need to have money to pay off your initial lender. So ideally before any work starts you should have a long term lender in mind and have refinancing worked out before your initial loan comes due.

Another thing you need to know about with construction loans is something called the draw process.

New construction loans Arizona are given in draws; the second way to risk less is to have a clear plan

The next tip is to have a plan and stick to it. I know it seems obvious, but when it comes to construction loans following this bit of advice is crucial. You see the funds from construction loans are given bit by bit, usually on a monthly basis to cover the cost of work over a given period. So you need to have a clear, well-budgeted plan for each phase of construction to ensure you’ll have enough money on a monthly basis to keep work going.

If you don’t plan each phase of your project carefully, one month you might not have enough money to pay your contractors. What happens then?

Work stops until your next draw is given, and with your project set back by a week a month or more, your loan could come due before construction is finished.

If you ignored our first tip, the fact that your home remains unfinished will prevent you from refinancing. Then your initial lenders going to foreclose on your dream home before you ever set foot in it.

As you can see a lot can go wrong when it comes to construction loans. Which leads us to our next tip:

With new construction in Arizona loans you need flexibility, so the third tip is to have a lender you can work with

The next tip is have a lender you can work with. Don’t just do a quick online search and get a construction loan from someone you’ve never met.

Why? Well, theres a couple laws of nature: What goes up must come down, and if you have a plan something will go wrong.

Lets say some crucial materials, pipes or insulation, get damaged before they can be installed, and your supplier refuses to give you a refund. You might call that big national construction lender, requesting more money, to which they might say “sorry a deals a deal.” Without that extra money, you’re entire plan is thrown out the window. Your house will sit unfinished, again this will keep you from refinancing and that impersonal lender who refused to negotiate with you will foreclose. So get a lender you can work with.

Because a lot can go wrong in a construction project, and the last thing you need to worry about when building your dream home is your loan. So follow these three tips to risk less: have refinancing in place ahead of time, have a clear work schedule and have a lender you can work with.

Bad Credit? How Arizona hard money loans can help

A single solid real-estate deal could help you clear up a boat load of old debt, but if you have bad credit you can’t invest in real-estate, right? Because Banks just don’t give financing to folks with double digit credit scores. Well even if your credit score happens to be 75, you can still invest in real-estate with the help of something called Arizona hard money loans.

Conventional wisdom is that the last thing a person with bad credit should do is get into more debt. But, conventional wisdom is often wrong. Conventional wisdom once said that leeches could cure the plague.

In truth a single sound investment could change your financial future and Arizona hard money can help fuel the cost of these investments.

Even with bad credit, Arizona hard money lenders can give you a loan

Most lenders consider your credit score above all else, but Arizona hard money providers really only care about one thing-collateral. So even if you have a credit score of 75 a Arizona hard money provider could still fund your deal if you have a decent down payment on hand and your deal has enough potential.

A quick search about Arizona hard money will reveal high interest rates, balloon payments-scary words especially for someone with financial difficulties. You might be thinking ‘so these guys don’t care about credit, and they’ll give me a six month loan at 12 percent interest, it sounds like a scam. Given terms like that why don’t I just go get another credit card to pay off my debts?”

The fact of the matter is, Arizona hard money is a legitimate business,. In fact, Arizona hard money is the go-to form of financing for those in the flipping business.

Now you might be thinking “since when was flipping houses a sound financial strategy?”

Flipping houses with the help of Arizona hard money loans could be a path to financial freedom.

Arizona hard money can help you resolve your credit issues, because a single solid flip could earn you tens of thousands of dollars.

However, there's a right and wrong way to go about this.

The right way to use Arizona hard money would be to perform all the due diligence possible, have a clear understanding of what a property will go for after you fix it up, have a clear timeline for your renovations, fix up the property, sell it and then use the resulting profits to pay off your initial Arizona hard money financing and your remaining bad debts.

The wrong way to use Arizona hard money would be to purchase a distressed property, with no understanding of what it will go for after you’ve fixed it, or how long your renovations will take.

So Arizona hard money isn’t too good to be true, because flipping is hard work, and above all it is certainly not risk free.

But what sounds better to you- fixing your credit issues through decades of penny pinching or resolving them in a couple months by flipping a single house?

If your willing to take that risk Arizona hard money can help.