Whether you want to rent out duplexes or buy a Arizona Fix and Flip property, finding financing can be quite difficult.
It isn’t just borrowers with bad credit that find themselves in an uphill situation when looking for financing. Even qualified borrowers find themselves struggling to secure the loans they need. What do you do when the bank turns you down and you have exhausted your options? That is where Arizona Hard Money Loans come to into play. These loans are an attainable option for residential buyers with unique needs.
Residential Arizona Hard Money Loans are also called equity-based or private money loans. Typically, these loans are used by real estate investors that want to purchase properties that the bank won’t finance. Many borrowers aren’t aware that these loans can also be used on homes, as well. The terms are different than a traditional bank loan.
TERMS OF ARIZONA HARD MONEY LOANS
These loans not only help buyers that have run into credit problems, they also work well for borrowers who need approval quickly. Arizona Hard Money Loans are a more flexible option. Arizona Hard Money Loans do not have to follow federal guidelines, as banks are required to do. They have their own underwriting department which allows this flexibility.
Typically, Arizona Hard Money Loans have:
* Term: 1-3 years
* Rates: 7-12%
* Lender Fees: 1-10 points
Who uses residential Arizona Hard Money Loans?
Arizona Hard Money Loans are utilized by a variety of different borrowers. Often, investors, purchasing a quick Arizona Fix and Flip property, use these loans because they can be financed so fast. Here are some examples of when a Arizona Hard Money Loan is necessary:
1. Buyers have a mortgage on another property.
2. Property doesn’t meet the requirements of FHA lenders.
3. Buyers need to finance quickly.
4. Banks are unwilling to finance.
5. Buyer has poor credit.
6. Buyer has a recent foreclosure or bankruptcy.
7. Buyer has a recent short sale
8. Buyer has less than 2 years of employment history with their current employer.
If you want to find a hard money lender, find a local lender. Having a lender that you can see versus working with one thousands of miles away has benefits. Developing a relationship with your lender is important when it comes to any hiccups. Typically, local lenders are very easy to find, especially if you are already in the industry. Many sponsor local networking events. You can also find a local chapter of the Real Estate Investors. Another option is to look at Yelp and find one closest to you with good reviews.
Where does hard money come from?
Make sure when you meet with you hard money lender you ask how they are funded. A lender that is not privately funded is most likely going to be funded using institutional funding. Institutional funding will be subject to the same underwriting as a bank. What that means is the approval requirements will be stricter and the loan will not close as quickly as with a privately funded lender.
When searching for a residential loan it is crucial you know everything about your lender and feel comfortable.
Level 4 Funding LLC
Private Hard Money Lender
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 44 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 and 5 amazing grandchildren. Dennis has been an Arizona resident for the past 43 years.