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What are the benefits of a hard money loan and when does it make sense to use one?

In the mortgage lending world there are different types of loans. There are conventional loans, government loans—such as FHA, portfolio loans and then there are hard money loans. Hard money loans are made by private lenders. Unlike bank loans that are created through institutional lenders such as Chase or Bank of America, these are made by private individuals or groups of individuals. These loans are pulled together and financed through private lenders—wealthy lenders. These individuals pull their money together to create a mortgage fund. From that they will lend to consumers or businesses for residential and commercial purposes. From there they will sell the mortgage trust deeds to investors.

The idea behind Arizona hard money loans is that people who can not get access to conventional loans will seek hard money loans to get financial help. These loans have a great purpose in society and have helped people from all professions and walks of life. Hard money loans can help save businesses and homes. These loans can also be used as short-term loans for real estate investors in fix and flip properties.


Arizona hard money loans are short-term loans. After a borrower receives a hard money loan a variety of things can happen. The property can be flipped, sold or the borrower can refinance into a permeant mortgage. Typically, the main purpose for a hard money loan is for an investor to purchase and rehab property and then sell it for a profit. These investors usually take out a Texas hard money loan with a term of 6 months to a year.

Credit scores really don’t matter when it comes to hard money loans. Most lenders don’t even verify your income. What these lenders care about is the equity in the property. Typically, lenders will finance about 60%-75% of the loan value. What that means is if the property is worth a million dollars, they will lend around $600,000 to $750,000 on a purchase or a refinance. This means that the borrower will need to find other financial means for the down payment. However, a refinance would not require money down because there is equity in your property. For example, you own a two million dollar strip mall and it was paid off free and clear, a hard money lender could get you cashed out for up to 75% of the two million dollars. This money can be used for anything the lender is in need of.

Hard money lenders will work with you. These loans can be interest only. Hard money loans fluctuate between about 7%-15% depending on the borrower, the lender and the situation—the collateral, the type of real estate and the location of the property.

Arizona Hard money loans are generally used for real estate investing. However, investing is not the only use of hard money.

Hard money lenders do not follow the same guidelines as conventional lending institutions. Therefore, they have more flexibility with their underwriting process. If you have bad credit, no credit, have found yourself in a tricky financial situation or just need cash quickly find a local hard money lender.



Dennis Dahlber Broker Ri CEO Level 4 Funding LLC Dennis Dahlberg
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.

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