Fred did what most people do first: seek out a local bank or credit union. Banks are traditional lenders, but they have high standards when it comes to loans. You have to have a great credit score and debt to income ratio, and really prove yourself as a reliable borrower. Fred, however, could not. So, he began to seek out untraditional options and came across residential hard money lenders.
Fred found that, while technically considered alternative and private options, these lenders were able to offer money fast and approve a wide variety of borrowers. He began to research local lenders near him to find out more.
When Fred met with his local lender, he learned that the collateral of the property he wanted to obtain was considered before his financial history. The plans for the property and the overall investment potential posed greater risks to his lender than his finances. His lender was able to overlook an imperfect finance history for the investment value of Fred’s plans. Fred was relieved to learn he qualified for a loan with his residential hard money lender. Before he sealed the deal, however, he had to consider the risks—even if the possibility of receiving a loan with a 75 percent LTV loan to value ratio seemed like a dream come true.
Before diving into a deal with your lender, you need to consider their reliability. Lenders and borrowers work on two way streets, and your reliability is just as important as your lenders. Additionally, it is essential to consider the high interest rates. When Fred first saw his lender’s rates, he couldn’t believe they were as high as 5 percent more than others on the market. However, Fred saw potential in his lender. Because he was working on a fixer upper, the short repayment period didn’t scare him. He was experienced in renovations and believed the property would sell when it was on the market, making the short repayment period easy to deal with. Not only that, but Fred found it key to work with his lender to obtain the funds—and therefore his property—fast. Even banks couldn’t offer the speed of his lender. Banks could take more than a month, but Fred’s lender only needed a week to get going. While there were risks associated with private hard money lenders, sometimes the pros outweigh the cons. Fred found it essential to work with his lender on his fixer upper, though he noted they wouldn’t be ideal in every situation. Fortunately, the speed of his lender was able to help him obtain his property, as well as renovate and sell successfully.
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.