By now, you know that there are reputable lenders in practically every state, especially hard money lenders. Dallas lenders of hard money, in particular, are some of the most reputable lenders you can find, even when dealing with rehab financing and rehab projects.

If you are a newcomer, you may not know that lenders that provide rehab financing are, in many ways, just niche hard money lenders. Dallas lenders who specialize in hard money rehab loans, however, are not necessarily on every corner, therefore, you need to know what to look for when it comes to these particular kinds of hard money lenders. Dallas rehab projects, similar to other rehab ventures, are held up to a higher standard in the world of hard money lending, so let us discuss what that standard entails.

For starters, these particular niche lenders, if you will, consider several crucial things when deciding whether or not to approve your hard money financing. For example, what you paid for the particular piece of property is always a discussion topic. These lenders want to ensure that their investment, as well as their investor’s stake in your project, is protected. In other words, if you purchase the property and do not make any improvements there needs to be protections in place.

Similarly, your lender and potential investor will be highly concerned about your rehab project’s upside potential. Of course, this is not to say this will factoring into your loan to value ratio, but rather that it will help everyone determine how potentially risky extending financing may be. In addition to these factors, your lender will want to fully understand the nature and extent of your rehab project, as well as the ins and outs of your personal financials.

Other Things to Consider

Besides the above-mentioned concerns, your future niche lender will also want to ensure that you meet your repayment terms for your rehab loan. Thus, you will quickly see that though you are securing your rehab project via hard money, there are expectations and firm commitments that you won’t often see with other kinds of financing. Of course, there is no need to panic all this means is that you need to work within the timeframe or rather fixed period. However, if you are unable to work within your set time period for whatever reason, then you have to deal with prepay penalties. Prepay penalties are typically standard when dealing with rehab loans, so it is important to keep them in mind when moving forward with your hard money financing.

How to Make Money with Rehab Financing

Ultimately, if you play your cards right you can secure hard money financing for your rehab project or venture fairly easy. It is all a matter of knowing what to expect from your lender, understanding the market and ensuring that your rehab project has what it takes to turn a profit while allowing you to avoid any prepay penalties or fees. Remember, you can earn a sizable return with the assistance of a rehab loan, so if you don’t know where to start your lender search ask around!

Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
Texas Tel:     (512) 516-1177
Dennis@level4funding.com 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.