Second mortgages or home equity lines for a private hard money lender are often used to rehab an investment property. You will need to meet certain asset guidelines to secure a second mortgage. When you don’t meet these guidelines, a second deed trust loan is an option. When you expect the turn around on your property to be quick, or you need additional funds to prepare a property for sale, a second deed trust loan is perfect for you.
When you are in the business of property rehabilitation for resale purposes, your cash reserves can be more important than your credit score. Your ability to borrow money at low interest rates can increase your overall profit margin, but if you don’t meet specific cash flow requirements it can be impossible to secure a second mortgage. You don’t have to deplete your financial resources in order to rehab a property, but you need to be creative with your funding sources.
The longer it takes for you to prepare a home for resale, the more money you will spend on first and second mortgage payments. Knowing that you have monthly payments to make will help keep you motivated to get the job done on time.
Some property investors will sell off a smaller property to solve cash flow issues when trying to secure a second mortgage. While this works, you may have to sell a property for less than it’s worth in order to sell quickly. A second deed trust loan is a better alternative that offers a lower financial risk than selling off a property under pressure. When you want to rehab a property and you need extra money, a second deed loan is a great choice.
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.