Texas Hard Money Lender

Friday, December 6, 2019

HOW TO MAKE MONEY WITH AN ARIZONA AIRBNB

For some time it was difficult to run an Airbnb in the state of Arizona. However, thanks to Governor Doug Ducey, and the Arizona state lawmakers, residents of Arizona have a new possibility for financial growth.

Arizona lawmakers were worried about residents buying up property and turning the “house next door” into a hotel. Fortunately, for real estate investors the new laws were passed early last year and there are no limits to the number of properties that an investor can buy; add to that— there are no days that the home cannot be rented out. This means an investor can buy numerous homes on a street and potentially make the entire street Airbnb.

When it comes to potential income for Phoenix residents—the sky is the limit. Phoenix hosts MLB Spring training, Waste Management Phoenix Open, Barrett Jackson—add to that being the home of four professional sports teams and a division one college. That being said, Phoenix has thousands upon thousands of visitors each year.

HOW TO BECOME AN ARIZONA AIRBNB OWNER

1. Understand Rental Arbitrage— When the potential for profit is significantly higher than what it cost you to obtain that is called opportunity. Rental Arbitrage is when your achievable daily rental rate is obviously much greater than your actual daily rental cost. Every city will have this and it is important you do your homework for your market.

2. Be Realistic About Your Investment In Time—Unfortunately, you don’t just buy a property, list it and the money starts pouring in. This is business that will take some time to build. The key is in your reviews.

3. Find A Property—It is important to find property near places tourists would want to live. In Arizona a superb property would be in Sedona. If you are in Phoenix look towards Westgate— where the Cardinals are located, North Scottsdale, Old Town or Tempe. Make sure you research the annual events that will bring your customers to you.

REGULATIONS OF AIRBNB LOANS

The financing is always the tricky part when it comes to investing in an Airbnb. Although, it can be difficult finding funding for your Arizona Airbnb it is possible. Banks are watching carefully how properties are being used when it comes to approving new mortgages and refinancing existing ones. Mortgages that operate as rentals are riskier investments for banks than primary residence. The bank needs to feel confident that during times of vacancy the owner will be able to pay the mortgage.

An Arizona Hard Money Loan is a loan backed by the borrower’s assets versus their credit and monthly income. Arizona Hard Money Loans are easily approved sometimes within minutes—the borrower will have an approval usually within 24 hours and typically have their funds within two weeks. The borrower must have documents proving the value of their assets and that they are the legal owners. Arizona Hard Money Loans are short term loans usually ranging from one to five years. After the loan terms are up usually, they can be transitioned to a mortgage through a traditional bank.

If an Airbnb is something you have been interested in, find a property and make an appointment with a local hard money lender to get you on your way to financial freedom.

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.

Thursday, December 5, 2019

THE BEST LOANS FOR AIRBNBS

Rental properties like Airbnbs can bring in a great deal of extra money to your household. While you may be excited to jump into the rental game, there are a few things that are important to know before purchasing your first property.

Banks are scrutinizing how properties are being used when it comes to writing new mortgages or even refinancing existing mortgages. Rental properties have historically been riskier loans for banks. Most banks will not even extend a line of credit on a property that is being used as an Airbnb rental. Although, there are instances a traditional loan will be approved for an Airbnb, it is not common at this time and a borrower will have to jump over red tape and then wait, what could be months, for approval.

Arizona Hard Money Loans have become popular routes for borrowers to follow in being approved for a vacation home mortgage. Arizona Hard Money Loans are hard asset based loans. Hard assets are usually real estate. With these loans, the lender is not worried about you monthly income or credit. Rather, they are concerned about your assets. In case of default, the lender may foreclose on your property. These loans have different terms than traditional loans, as they are meant to be short-term loans for up to 5 years. However, a borrower may refinance with a traditional institution when the term limits expire if needed. There are many options when it comes to Arizona Hard Money Loans.

An Airbnb can bring a generous amount of annual income to your family. It is imperative that you do your homework before speaking with a lender.

The top 10 cities to own an Airbnb:

1. Asheville, NC

2. Portland, OR

3. St. Louis, MO

4. Nashville, TN

5. Phoenix, AZ

6. Denver, CO

7. Austin, TX

8. Charleston, SC

9. Dallas, TX

10. San Antonio, TX

Do you live in any of these cities? If so—get yourself with a lender and start generating more income!

Wednesday, December 4, 2019

THE REAL DEAL ON AIRBNB LOANS

Airbnb hosting is a tempting opportunity for homeowners—make money off the property you own as a vacation rental.

Hosting an Airbnb can be quite a nice chunk of added revenue stream. Currently, close to 3 million people have listed their homes as Airbnbs. Location will depend on the profit homeowners make with their rental. However, the average homeowner brings in close to $20,000 per year in additional income.

Don’t expect to make much profit if you live in a small middle of nowhere town. However, a beach city such as San Diego or a city like Phoenix, who hosts MLB Spring Ball, are the types of cities that can get rental property owners a lot of money.

Time is another factor in the equation of Airbnb. How much time will you have? Will you clean after your guests depart or will you hire a service? What if the dishwasher floods the kitchen—is it you running across town to fix it or do you have a handy man? Each time you hire someone that will affect your profit.

Location and time are important when factoring in the idea of owning an Airbnb. However, the big question is—how will you finance a vacation home that you can legally rent out?

Taking out a hard money loan for your rental property investment can really help you get the ball rolling. Hard money lenders base their loans in equity rather than on your financial history, allowing borrowers with even the worst of credit to get approved.

Check out some hard money lenders near you to learn more about the process and see if it’s right for you.

Tuesday, December 3, 2019

EXPECTATIONS OF ARIZONA FIX AND FLIP LOANS

Lina was a divorced mother of three living paycheck to paycheck until she started flipping houses. Here is her story.

In March of 2009 Lina Jerome’s life felt like it was falling apart. Her husband had left her and their 3 daughters. Not left as in living in separate houses—left as in left the country not to be heard from again.

Lina had worked as a teacher’s assistant and her husband had been the bread winner. After he had left her financial world began to crumble. All three of her girls were in different extra-curricular activities and all three went to different private schools. She had to pull them all out of their schools and return them to public schools. Many dinners were Top Ramen and grilled cheese. Times were tough, and as Lina looked toward their future she didn’t see change coming.

DREAMS DO COME TRUE

After months of struggling and worrying Lina saw a “We Buy Ugly Houses” flyer on her front door. Her house wasn’t ugly, but Lina was curious about the sign. When she inquired, she was given the run down on flipping houses. She figured she could flip houses. And she did. Her bank would not finance her due to her present financial issues and her lack of monthly income. Traditional banks are less than comfortable lending you money while you transition financially.

After being turned down by her bank of 20 years, she found a private lender, also known as a hard money lender. In April of 2010 she found a perfect property. Then price tag was $109,000—with about $6,000 worth of rehabbing. Lina was approved for $116,000 Arizona Fix and Flip loan within 15 minutes; her funds were dispersed in 13 days. She worked with a contractor and had the house rehabbed within 6 months. During that 6 months she paid only interest on the loan. The newly renovated home went on the market and was sold within a week. Lina’s loan was $116,000; she sold the home for $205,000—making Lina an $89,000 profit in less than 7 months. After paying the interest on the loan, the fees associated with the loan and her contractor she still walked away with close to $50,000 in profit. Not only did this change Lina and her daughters’ lives completely, she found that she loved waking up and going to work each day. Today Lina flips three to four houses a year and averages close to $200,000 in profit.

Yes, Lina’s story is inspiring—but I don’t have the money to do that and I definitely don’t have the credit to flip houses in Arizona.

That is the beauty of a hard money loan. It is an asset backed loan; the lender is far more concerned with your hard assets than your revenue stream or credit. If the borrower defaults on the loan the lender has the option to foreclose on their assets (mainly real estate). Where there is a will there is always a way- you can flip houses in Arizona. Find an Arizona local hard money lender and start making your financial dreams your financial future.

Sunday, December 1, 2019

EXPECTATIONS OF RESIDENTIAL ARIZONA HARD MONEY LOANS

Whether you want to rent out duplexes or buy a Arizona Fix and Flip property, finding financing can be quite difficult.

It isn’t just borrowers with bad credit that find themselves in an uphill situation when looking for financing. Even qualified borrowers find themselves struggling to secure the loans they need. What do you do when the bank turns you down and you have exhausted your options? That is where Arizona Hard Money Loans come to into play. These loans are an attainable option for residential buyers with unique needs.

Residential Arizona Hard Money Loans are also called equity-based or private money loans. Typically, these loans are used by real estate investors that want to purchase properties that the bank won’t finance. Many borrowers aren’t aware that these loans can also be used on homes, as well. The terms are different than a traditional bank loan.

TERMS OF ARIZONA HARD MONEY LOANS

These loans not only help buyers that have run into credit problems, they also work well for borrowers who need approval quickly. Arizona Hard Money Loans are a more flexible option. Arizona Hard Money Loans do not have to follow federal guidelines, as banks are required to do. They have their own underwriting department which allows this flexibility.

Typically, Arizona Hard Money Loans have:

* Term: 1-3 years

* Rates: 7-12%

* Lender Fees: 1-10 points

Who uses residential Arizona Hard Money Loans?

Arizona Hard Money Loans are utilized by a variety of different borrowers. Often, investors, purchasing a quick Arizona Fix and Flip property, use these loans because they can be financed so fast. Here are some examples of when a Arizona Hard Money Loan is necessary:

1. Buyers have a mortgage on another property.

2. Property doesn’t meet the requirements of FHA lenders.

3. Buyers need to finance quickly.

4. Banks are unwilling to finance.

5. Buyer has poor credit.

6. Buyer has a recent foreclosure or bankruptcy.

7. Buyer has a recent short sale

8. Buyer has less than 2 years of employment history with their current employer.

If you want to find a hard money lender, find a local lender. Having a lender that you can see versus working with one thousands of miles away has benefits. Developing a relationship with your lender is important when it comes to any hiccups. Typically, local lenders are very easy to find, especially if you are already in the industry. Many sponsor local networking events. You can also find a local chapter of the Real Estate Investors. Another option is to look at Yelp and find one closest to you with good reviews.

Where does hard money come from?

Make sure when you meet with you hard money lender you ask how they are funded. A lender that is not privately funded is most likely going to be funded using institutional funding. Institutional funding will be subject to the same underwriting as a bank. What that means is the approval requirements will be stricter and the loan will not close as quickly as with a privately funded lender.

When searching for a residential loan it is crucial you know everything about your lender and feel comfortable.

WHAT IS AN ARIZONA FIX AND FLIP LOAN?

What exactly is house flipping? Simply put it is when a real estate investor buys houses, repairs them and sells them for a profit.

The definition of house flipping may be simple, but it is not as easy as it may sound. If it is done correctly, it can turn a handsome profit. There are two essentials when flipping: property and money.

To find the rehab property that matches what you’re looking for there are a few options:

1. Search MLS: The Multiple Listing Service (MLS) is a database put together by real estate brokers that lists property according to geographic region. Licensed real estate agents are the only ones that have access to MLS. You will need to connect with an agent to be privy to MLS.

2. Auctions: Auctions are a fantastic opportunity to find a property at a very low price. Most auctioneers will require you to put 10% of the purchase price at the time of winning the bid. After 30 days you will lose your down payment and property if you have not settled.

3. Wholesalers: Wholesaler’s business is finding rehab properties, getting them under contract and then finding a buyer who will flip it. Basically, you will be paying an extra fee for the wholesaler to find the property.

BEFORE APPLYING FOR A FIX AND FLIP LOAN IN ARIZONA

There are a few things that all potential flippers must understand before seeking the funding for their investment; understanding these things will speed up the process and make your lender believe you know what you’re doing, which will benefit you when it comes to approval time.

1. Create a Business Plan: This is a thorough analysis of your property that contains—the exact address of the property, comparable sale prices for nearby homes, your strategy, timeline and financial projections; this is called the ‘scope of work.’

2. Estimate Renovation Costs: Your entire project will fail if you don’t borrow enough from your lender. To get a realistic grasp on your renovation costs you will need the help of an appraiser and contractor.

Finding the right lender is the most important component of your Arizona Fix and Flip loan.

Hard money lenders have proven to be the best option for Arizona fix and flip financing. House flipping in Arizona in a short amount of time is the main reason Arizona hard money loans work most effectively for these projects.

Arizona hard money loans are short-term loans secured by real estate. They are also referred to as rehab loans. One attractive part of these loans is their lower qualifications for approval. Borrowers can receive approval and funding in as little as 2 weeks. Hard money lenders concern lies in the property and potential value than about the borrower’s credit and monthly income.

These loans do have higher interest rates; however, they can not only finance the property, but can also finance the renovations. Lender fees and closing costs are typically taken out of the loan. Borrowers can reduce their overall financing costs by paying back the loan early because these loans are not known to have a prepayment penalty.

Arizona hard money loans can work for a variety of people. When an investor requires a fast closing, an investor has poor credit or when more money is needed than a bank is willing to approval. Regardless of your situation a hard money lender will be able to finance you much quicker than a traditional lender.