Flipping houses can be a great business and a great way to build your personal wealth. But it can also be a very difficult business is you are not familiar with the financial needs and the criteria for that makes good house flipping loans. You will quickly learn that a traditional loan is not a good fit for most flippers. The biggest drawback on a traditional loan is the extended time frame to secure the loan. In addition, you need to have very good credit to qualify for most bank loans. But fortunately, there are much better solutions for your house flipping loans.
The best way to avoid all of the runaround and document requirements is to avoid the traditional lenders. Using a private lender is a lot faster and easier. The cost can be a little bit higher but in most cases, you can tailor the loan to meet all of your needs including a fast approval and funding process. These types of loans are called Arizona Hard Money Loans or asset-based loans and they are offered by a private lender or a small group of people who function together as a private lender.
The lenders are not looking at your credit history, income or even your credit score to decide if they are willing to loan you the money. For asset-based lending, the determining factor is the value of the property that you are buying. The lender requires that you use the property as collateral for the loan so that it is secured. All the lender is concerned about is that the value of the collateral is always greater than the balance of the loan.
Lenders who focus on these Arizona Hard Money Loans have a set loan to value ratio that they are willing to offer borrowers. The LTV is normally somewhere between 70% and 80% of the value of the property. There are two reasons for this choice. First, this assures the lender that the property will always be worth more than you owe in the event of a default on the loan. Second, the lender knows that you are very motivated to get the deal done as you have invested your own money in the project to reach the asking price. This is known as having some skin in the game and is a good motivator.
Flipping houses in Arizona can be a great business and can grow very quickly if you are aware of the proper types of funding for these projects. In addition, you need to understand that the conveniences of hard money only come at a higher cost. So it is important that you find the best deal possible to begin your home flipping business and ensure your success.
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.© 2016 Level 4 Funding LLC. All Rights Reserved.