Hard money lenders offer real estate investors the flexibility needed to finance deals that other lenders avoid like the plague. But not every lender is cut from the same cloth learn some of the traits of the ideal hard money lender, so you can find the help that’s right for you.

When it comes to hard money you want to look out for hidden costs. In the case of rehab projects, sometimes the loan is given to the borrower bit by bit in the form of draws. Don’t get ripped off by making interest payments on money that you haven’t received yet. These hidden interest payments can cost you thousands of dollars. Seek out lenders who only charge interest on money as it is drawn if you plan to use hard money for a rehab or construction project.

If you can seek out direct hard money lenders a direct lender has more room to negotiate

A direct lender someone who already has the funds on hand to close your deal. Direct lenders raise the capital to fund their loans themselves. In contrast, indirect hard money providers, fund their loans from a pool of accredited investors. In most instances, these investors have a guaranteed rate of return on their investments. Due to this fact Indirect lenders have no wiggle room when it comes to the interest rate they can offer you.

Hard money is all about flexibility, and you want as much room to negotiate the terms of your deal as possible. Even a 1 percent reduction in interest rate could save you tens of thousands of dollars depending on the size of your loan. So seek out a direct hard money provider who has more room to negotiate the terms of your deal.

If you can seek out hard money lenders that offer you the

ability to write off interest payments on your taxes.

Say you’re a regular real estate investor, perhaps throughout a given year you’ve rehabbed about 3 properties, taking out loans of around 300,000 at a 14 percent interest rate. In this case, throughout the year you’ve paid about 10,500 dollars in interest.

Would you like to write that off that very healthy sum on your taxes? Then you need to seek out a hard money provider who can provider a 1098 mortgage interest form. Not every hard money provider can do this due to inexplicable and opaque regulations far beyond the scope of this article. If you are a regular real estate investor being able to deduct your mortgage interest payments could save you thousands of dollars each year.

In short, the ideal hard money provider saves you money in the following ways:

• They don’t rip you off with hidden expenses. For example, charging interest on money they haven’t given to you

• They’re able to save you money because they can offer you a lower interest rate

• The interest on the loans they provide can be deducted from your taxes every year.

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 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.

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