Why New Builders Struggle to Get Arizona Spec Home Financing (And What You Can Do About It)

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Why New Builders Struggle to Get Arizona Spec Home Financing (And What You Can Do About It)

Even if you have experience as a sub-contractor, making that first step into self-employment and running your own projects can be a challenge, particularly when it comes to getting funding. The good news is, you may still qualify for Arizona Spec Home Financing regardless of whether you’ve already been denied by the banks.

To start with the basics, speculative builds are those constructed without a specific buyer in mind. You may have chosen an area where houses are selling like hotcakes and have a high degree of certainty that someone will purchase it as soon as it’s ready, or even show interest during the build, but no buyer or homeowner is involved in the process. It’s you and your team handling construction. You make all the calls related to features the property has, from the flooring to the fixtures.

This makes speculative projects a dream for many builders, but when they hit the point where they’re looking for Arizona Spec Home Financing, they come up against serious roadblocks. That’s because they usually attempt to secure funding from the typical channels, and it simply doesn’t work.

Banks are the typical first go-to. Many no longer work in the speculative arena at all, but when they do, they usually require you to have quite a bit of equity in the project and only lend on small projects, plus have stringent requirements for experience and credit. Lines of credit tend to be the next line of defense. You can, in theory, finance a whole project using a line of credit. However, this typically requires impeccable credit. Lastly, equity is an option. This means leveraging properties you already own. If you aren’t a seasoned investor, however, this means putting your own home on the line, provided you own it outright.

Private Money Can Help You When Other Options Fail

Private money isn’t like the other options. It typically comes from individual investors, groups of investors who pool their money together, or organizations. It’s designed to fill the lending gap, but what it really does is create a win-win solution for everyone. The individual investors do earn money on the deal, as opposed to feeding the banks, and you get the Arizona Spec Home Financing you need as well. Because private money isn’t subject to the same regulations, you can qualify regardless of your credit score and you don’t need to put your family’s house on the line either.

You can increase your eligibility by taking a few small steps.

So, if private investors aren’t expecting the same things as the banks, what do you need to qualify for Arizona Spec Home Financing? In short, a good property, solid plans, strong numbers, and experience. Three of those things are totally within your control. However, if this is the first project you’re running on your own, you may want to bring on a partner who has a successful track record. No doubt, you’ll find you’re running projects and qualifying entirely on your own in no time.



Dennis Dahlber Broker Ri CEO Level 4 Funding LLC
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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