Category Archives: commercial lendig

How to get a Commercial Loan when you are Self-Employed

In today’s era of rules and regulations, it can be difficult for the self-employed to obtain a commercial loan. Fortunately, there are options available for those that are fortunate enough to work for themselves.

One of the main reasons self-employed borrowers have difficulty obtaining a commercial loan is because of their reported income on annual tax returns. This is one of the many perks of being self-employed—all those write-offs including lunch with clients and travel expenses associated with training and business prospects. Unfortunately, all those write-offs are also the reason that individuals find it difficult to get the commercial loans they need to get started or increase their real estate investment portfolio.

One of the requirements that commercial lending institutions utilize is the debt-to-income (DTI) ratio. This is the ratio of monthly payments or liabilities such as car, credit cards, insurance, mortgage, etc. to monthly income. The requirements generally range anywhere from 38 to 50 percent. Lenders further break it up into two categories: front and back-end. Your front-end relates to housing payments while the back-end is your total recurring debt payments. These numbers will be determined by your bills and your tax returns, making it difficult for those that have lessened their tax burden through numerous business deductions. In addition to your past two years of tax returns, you will require other documentation.

Most traditional commercial lenders will require the following from a self-employed business owner: A copy of your business license, most recent 2 months of bank and asset statements, year-to-date profit and loss statement, and current property’s insurance. If you are a corporation, you will also need the last two paystubs with year-to-date earnings. If you are not “paperwork” minded and diligent in keeping business records, providing the needed documentation that gets you approved can be nothing short of a nightmare. Fortunately, there are alternatives.

Acquiring a Loan through a Private Hard Money Lender

If you are looking to develop or expand your real estate portfolio, a hard money lender may be the funding you are looking for. Most private lenders in this category look to collateral as a means of securing the loan and pay less attention to credit scores and DTI. One option is obtaining a bridge loan—a short-term loan that investors use in order to purchase a property quickly and make the necessary renovations before reselling.

One of the loans we offer at Level 4 Funding is the bridge loan. This loan is generally used as a bridge from one asset to the next—allowing you to keep one property while purchasing the next.
At Level 4 Funding we specialize in commercial loans for the self-employed. We offer a fast and easy approval process using either 12 months of bank statements or the last two years tax returns. Your credit score can be as low as 620 and the DTI up to 50 percent. We also offer 5/1 ARM or 30 year fixed with rates starting at 4.99 percent APR with no prepayment penalty. Call us to discuss your many options.

mark-gowlovech-150x150Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
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   

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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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.

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Cyber Threats Are A Real Danger For Commercial Lenders

level 4 funding teamJust like a job application, it is only natural that you may want only to tell your commercial lender what you think they want to hear, but proper and honest communication can go a long way towards making the relationship a good one.

It sounds like such an easy thing, yet it is one of the most common reasons problems arise in so many aspects of our lives—communication. More often than not, if we just talked about something, answered a question honestly, or responded in a prompt manner, we could avoid all kinds of unpleasantness.

In many cases, proper communication can get a relationship off on the right track and make it even better than you thought it was. For example, communication is a vital part of getting a commercial lender to approve a loan.

So—what do you need to do to make sure you communicate whatever needs to be delivered to your lender?

We Could Have Done Something, Had We Known

If you have ever gotten so behind on a bill that the company was calling your house daily to ask you about it, then you have probably heard someone tell you, “If we only knew…” If you had only told them a number of days ago why you couldn’t pay the bill, something could have been worked out—but not now.

We may not want to talk to them or be completely honest, but often if we just communicate, problems don’t have to be as harsh as we think they are. So, when it comes to working with a commercial lender, keep these four things in mind:

– Talk To Your Lender: Get to know who your lender is before engaging the loan approval process. Get to know their strengths and weaknesses, what sort of loans they like to approve, and how much experience they have with what you want their money for. Go with someone that understands you better, and it will be easier to work with them.

– Respond to questions, queries, and requests in a prompt fashion. Chances are they are asking whatever it is for a good reason so the sooner they know your answer, the better. That way, if a problem arises, it can be dealt with.

– Communication is a two-way street. The commercial lender needs to be as upfront as possible with the borrower and address whatever concerns they may have. Failure to do will foster an environment of distrust and make doing business more challenging than it needs to be.

– Be honest. There is no reason to sugar coat, talk down, or fabricate information about anything. If you do, chances are when the truth asserts itself—and it always will—the consequences will be much more dire than they would have been.

It Can Only Help

Being honest about things is not always easy. We hate to put a bad foot forward in any regard. That’s why people lie on their resumes and leave facts out in their loan applications. But just like in the workplace, the truth will eventually come out with your commercial lender. When it does, the consequences will likely make you wonder why you ever thought proper communication was a bad idea.

 

Level-4-Funding-Dennis-Dahlberg-Mort[1]Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC 
Private Hard Money Lender

Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

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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 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.


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