Traditional lenders like banks and credit unions may have some hard to meet requirements for the average borrower. If you’ve fallen behind in a payment or have weak financial history, you are probably not the best candidate for a traditional lender. While it may be discouraging at first, you should know you may qualify with untraditional, private lenders who offer hard money.
Texas Hard Money Lenders are the common go-to for people who can’t qualify for traditional loans. They offer speed, transparency, and a quick approval process—perfect for those who are ineligible for bank loans, and are looking to moving forward fast.
Borrowing from private investors usually means having a more personal relationship with greater transparency. In a successful deal with a hard money lender, you will get the money you need fast, as well as have some flexibility within the loan. Private investors focus on the property’s potential. This means they will evaluate it using a loan to value ratio, or LTV. Sometimes they are able to offer borrowers as much as 75% of the LTV. Banks differ because they evaluate the reliability of the borrower first—they seek out credentials, ensuring they are lending to a candidate who will be successful in the repayment period. This is not to say that private lenders do not consider your finances—they do. But they also evaluate how successful you will be with the property. In cases of fixer uppers, where a profit is hopefully being made, they will consider how this will factor into your ability to repay.
Borrowing from Texas Hard Money Lenders successfully comes down to using your smarts in making decisions. Doing research and understanding all the factors involved will make your life easier. This involves the terms to the loan agreement, expectations of your lender, and factors regarding the property itself. The repayment period for hard money is fast. Because it is paid off so quickly, usually in 6 months to a year, it is a great option for fixer uppers. The success of a quickly sold and renovated home lends itself to this option. However, others with a need for speed may also turn to this option—like those trying to prevent foreclosures, or just trying to obtain a competitive property. One major stipulation all borrowers of hard money need to consider is the high fees. While obtaining loans from private investors may come easier than public investors, it definitely comes with a noticeable price. Because lenders are going into a loan agreement with someone deemed “unreliable” by banks, the high fees act as a buffer between the lender and borrower. Knowing your financial situation and thoroughly evaluating if you can couple the fees of hard money as well as its repayment period will be essential, because while private investors offer great alternative options, they may not be the best bet for everyone, even if approval comes easy.
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.