Hard money providers use the value (or potential value) of the property being purchased to underwrite their loans. Therefore, hard money is ideal when it comes to financing flips because this type of lender can look past the current poor condition of your property.
In addition, when it comes to house flipping, hard money offers considerable advantages over other types of financing. In the case of foreclosures (i.e., the properties house flippers most often purchase) banks want buyers who can make full offers right away. Most hard money deals can close in a matter of days. This speed in loan closing makes hard money an ideal way to secure the best investment properties as quickly as possible.
Basically, you want a lender who can understand the potential of your project. Ideally, your lender should have expertise when it comes to renovation projects. If you are in the flipping business, you want a lender who can offer insight into your specific project, who will understand how to value your property after the repairs are carried out and can give you insight into the amount of financing you might need.
You also want to ensure your hard money deal closes as quickly as possible, so you can secure the best investment properties before your competition. So, the ideal lender should be a direct lender, that is someone who has the already funds on hand to fully finance your project.
But when it comes to speed, what are steps you can take to ensure your deal closes as quickly as possible?
What can you do as a borrower to take advantage of the speed offered by Arizona Hard money lenders and increase your eligibility?
In the first place have the numbers and the specific details of your renovation project worked out well in advance before you approach any lender. Know the particular aspects of the property you aim to purchase, the estimated cost of repairs you need to make and have a specific timetable worked out in advance.
Having a sense of the property’s potential gives you a sense of how much it might be worth after repairs, which will give your lender confidence.
Knowing the cost of the repairs you need to make; will also give a sense of how much financing you actually need. Hard money is expensive so have timetable in mind to get perspective on how long you will to carry the loan, as your aim should be to pay the loan off as quickly as possible.
Basically, the better your understanding of your specific project the more confidence your lender will have in you, and the faster your hard money deal can close.
In short, to get a hold of the best houses to flip, hard money is your best option. In the case of hard money, the ideal lender will have insight into your specific project. It is in your best interest to take advantage of the speed offered by this type of financing, so have all the details worked out in advance before approaching any lender.
Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
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.