Most banks are not comfortable lending on a property that is “speculative”—meaning the building of the property is a plan, but there is no property to speak of yet. And, the investors are building to sell for a profit.
Maybe you already have the land the property will be built upon—now you have to get the financing that will allow you to actually build the property. If a bank isn’t going to approve you for financing, who is?
After you have done all your planning and gotten all your permits in order, you are what is called “shovel ready.” You are ready to start breaking the ground and building. This is where most Arizona Hard Money Lenders are ready to get involved in the project. All plans need to be approved by the city you are building in—the zoning must be handled. A hard money lender does not want to get involved in a mess. They want to see proof that the investor is authorized to build before they approve a Arizona Construction Loan.
Arizona Hard Money Lenders requirements are a little different than banks when applying for a conventional loan. Banks require a large amount of various documents such as proof of employment—typically from the last three years, proof of all income, a breakdown of your assets, W2s from the last several years and so on. Hard money requirements are a little different in the hard money spec loan department. Arizona Hard Money Lenders aren’t seeking a 750 credit score and are more lenient on job history. They will look at tax returns and bank statements. However, they look at the overall project versus focusing so much on your income and credit. These Arizona Hard Money Lenders focus on specialized projects. It helps to have experience on your side—however, the project and the profit that is projected is what Arizona Hard Money Lenders are looking at.
First, have all the construction plans approved. You must have a construction budget. Many lenders do due diligence and have a third party construction management company perform a budget review—to make sure the budget is in line with realistic costs. Lenders may also conduct a future value appraisal that is based on the plans of the property. Expect that lenders will finance 65% of the future value of the property.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
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 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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.