Monthly Archives: April 2018

How to Evaluate a Property for Hard Money Loans

Real estate property purchases will benefit by knowing some ways to evaluate a property to best obtain hard money loans. Level 4 Funding offers the following tips to best evaluate the property you wish to get a loan for.

When entering the commercial or residential real estate market with the intent to purchase properties, fix them and then sell them for a profit, there are some things you should consider… Especially if you are looking to obtain hard money loans to fund the purchase. The better you are able to evaluate the value and prospective value of the property, the easier time you’ll have persuading lenders to fund your loan.

While unconventional or private lenders that provide investors with hard money loans are primarily interested in the collateral for borrower has to offer. In the case of real estate investors, this is typically the property that is intended to be purchased with the loan.

So it’s important to know what these lenders are going to be looking at when it comes to the property at hand. If you can pre-evaluate these things with a “lender’s eye” you may have an easier time getting approval. Level 4 Funding provides the following criteria: protective equity, which offers investors protection again payment defaults, fluctuations in the market and devaluation of the property; mortgage to value ratio, the property’s percentage of appraised value or quick-sale value – the lower the mortgage amount to the value of the property, the better; resale probability (the quicker the better); the condition of the property – which can affect how much investment will be needed to put into it to make it resalable; and location. The latter is one of the most important aspects of real estate — “location, location, location.” Consider the location of the property above all things.

There are many factors to consider, and each lender may consider some factors more important than others.

While the above are just a few of the major ones, there is a multitude of things that need to be taken into consideration when looking at an investment property. Lenders may be able to advise you as to which they consider to be most important as it related to the current market conditions.

When looking at an investment property, evaluation is a major part of the process.

With certain properties that go on the market, particularly foreclosures, time is of the essence. However, it’s more important to make a complete and unbiased evaluation of the property before jumping in “blind.” By considering all angles and factors, you can make a more education decision as to whether or not this property will be a good investment, and if you will be able to obtain hard money loans based on its current condition. Level 4 Funding can help real estate investors evaluate their property purchases to order to come to a loan agreement for the right property. Call Level 4 Funding today to see how they can help you find the investment property that will become an investment in your success.


Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC 
Private Hard Money Lender
Arizona Tel:  (623) 582-4444
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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Tactics to negotiate a better hard money deal

You may be seeking a hard money loan and looking for the lowest possible interest rate, but there may be additional costs you could be unaware of beyond the interest rate. You will be at a disadvantage if you aren’t aware of these expenses and don’t try to negotiate with your lender.

Some private lenders may earn their profits by charging fees rather than collecting interest payments. In the worst case scenario, an unscrupulous lender could lure in borrowers by advertising a low-interest rate, all the while charging them exorbitant fees. Even if a lender is reputable, borrowers should be aware of any additional expenses when it comes to their loan.

Private asset based lenders are business savvy and approach each loan as a business deal. There is always room to negotiate the terms of any business deal, and the same holds true for your loan.

The most apparent expense on an asset based loan is the point fee, which is a percentage of the loan amount which is paid by the borrower up front. You should do your best to negotiate the point fee because depending on the size of your loan this cost can be considerable.

You as a borrower need to be aware of the cost of your loan in points and any other fees that may apply.

Which fees can you negotiate when it comes to hard money loans?

In the first place, there’s the underwriting fee, which is the cost of a lender’s due diligence. The cost of underwriting can range from 750 to 2,500 dollars depending on an individual deals complexity. In addition depending on your circumstances the cost of servicing your loan could also be a factor. Loan service fees cover the cost of recording payments and generating reports, and this price can be considerable. A lender may charge a fixed monthly payment or charge a given percentage of the loan amount annually.

In addition, be aware of any late fees, or any potential change in your interest rate if you miss a payment. You will want to keep these fees as low as possible because if you miss a payment due to financial difficulties, higher interest rates and late fees will make it harder to catch up.

The main advantage of asset based lenders over traditional banks is that they are flexible and that their is always room to negotiate the terms of your loan. If you don’t try to negotiate these additional fees you may be taking on an unnecessary expense.

Take advantage of the flexibility offered by hard money lenders

Some of the fees mentioned before may or may not apply in your case. But you should try to take advantage of the flexibility offered by private lenders. If you are a borrower with considerable experience and strong collateral on hand, in most cases your private lender will work with you to negotiate any fees.

In short don’t look at an attractive interest rate when shopping for a loan. If you want to get the best deal possible, know the fees that are being charged and to do your best to negotiate.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
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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How to Qualify for a Spec Construction Loan

First-time real estate investors could find spec construction loans a challenge to qualify for and very complicated. Get a sense for how construction loans are different from conventional mortgages and some strategies to maximize your chance of qualifying.

Construction loans differ from ordinary commercial loans in a variety of ways. They are more complicated than regular mortgages and funding is given according to a specific timetable. An initial amount of funding will be given to the borrower, and then the remainder of the loan will be dispersed on a monthly basis, or at the borrower’s request. Most lenders will require verification of a borrower’s expenses over the course of a construction project, which can create complications.

Construction loans are especially tricky to qualify for and are considered too risky by most banks. Most lenders have difficulty underwriting construction loans because they have to rely on the borrower’s assumptions about the cost and profitability of a given project. Most lenders are especially wary of spec loans and consider them too risky because there is no guarantee of a future sale.

A spec loan is usually given on a short-term basis and is not meant to be a long-term mortgage. The aim of the borrower is to sell the property quickly after construction is completed. It is crucial that potential borrowers can demonstrate their expertise in order to qualify for a spec loan.

If you can talk up your expertise to increase your chances of qualifying for a spec construction loan

Your financial projections are what a spec lender will rely on to underwrite your loan and so it is essential to demonstrate your expertise. If a lender doesn’t have faith that you will finish a project, or that you will earn a profit in the end, in most cases your construction loan won’t be approved.

The best way to qualify for a spec loan is to give any potential lender confidence in your knowledge and experience when it comes to real estate. But there are additional strategies you can employ as well.

Specific tactics to help you qualify for a spec construction loan

Seek out lenders located near your construction site. A local lender will have an emotional investment in the area and will have a better understanding of your project’s potential. Ensure you have enough capital up-front to make a sufficient down payment. Lenders will want an assurance that you have a sufficient stake in your construction project. The risk entailed by a spec loan usually entails a significant down payment.

Have a detailed understanding of your builders draw-process, meaning know how much your builder intends to spend at every step of your project and be sure this schedule matches the structure of your loan.

In short to qualify for a spec loan, demonstrate your expertise, find local lenders, have sufficient cash on hand and know your projects timetable. By employing these strategies, you maximize the chances of your spec loan getting approved.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
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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Benefits of Using Hard Money Lenders

Still in search for funding for your Real Estate Investment Project? There is a tremendous amount of capital available in today’s market and hard money lenders are funding their share.

From hard money lenders, bank credit cards, lines of credit, private lenders, retirement funds and traditional bank loans, real estate investors are finding the capital they need for their next big project. Hard money loans have not always had fair press, though these types of loans have been a dependable way to fund deals for decades.

The funds come from a group of individuals or a single individual who lends on their own terms. They base their decision on the collateral of the deal. With traditional lending, if your credit score falls below a certain amount then it will be impossible for you to get funded, regardless of the circumstances. Because hard money lenders set their own criteria, they can often fund projects that have been denied by traditional banks. The higher risk is associated with somewhat higher interest rates. They also work quickly to get projects funded, usually within seven days or quicker. A few of the benefits of using Hard Money Lenders are:

1) Speed–Regardless of what your offer is the speed in which you can close is more important. Conventional loans can take up to 45 days to close and many conventional lenders have been burned on deals that never closed due to the lengthy closing time. When you place your offer, a seller may take a little less knowing that the property can close in 5 to 7 days.

2) Volume – Over the course of a year, closing time within a few weeks means a few more rehab projects which will generate greater returns to the bottom line.

3) Quality–With Hard Money in your corner, you can be assured that what needs to be done will be done correctly and you do not have to cut corners to save money. You will earn a better reputation for quality work and more projects.

Bigger Projects

Knowing that you have a hard money lender behind you can help you build up to bigger projects over time. You start with a single family unit and build up to multi-family and commercial properties. Looking at various projects you may or may not want to use a hard money lender. There might be some projects that a four percent interest rate will benefit you while some rehab projects demand the speed that hard money offers. The goal, eventually, is to build enough capital that you are able to fund projects yourself without any outside funding.

With hard money lenders behind you, you have the option to look at all projects that come your way.

The fees and interest rates for hard money loans can be higher, but the speed in which you can get a project funded may be worth the extra expense. In a short-term deal, this is a small price to pay to finish a rehab and flip the property. It is worth the relationship with a hard money lender as well as other financing options for choice on a project-by-project basis.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
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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Top Situations where a hard money loan is best

A hard money loan is any loan secured by a “hard” asset (i.e., An Asset-based loan). This type of loan can be your best option especially if you need financing to construct a new facility, to renovate a distressed property or if you need to make a purchase quickly.

Asset-based loans are typically short-term loans and are more expensive than traditional financing. Because of this higher expense, it is easy to ask, who would want this type of funding in the first place?

An asset-based loan is especially useful for real-estate investors who are speculating on a quick turn around when it comes to their project. Traditional lenders avoid relying on this kind of speculation.An obvious example is a fix-and-flip project, banks avoid financing these projects because there is no guarantee of a profit and the borrower could default in the end. Traditional banks are also wary of construction loans because they have to rely on the borrowers assumptions and success isn’t guaranteed.

A hard money loan can be the help you need if you need to fund a renovation or construction project

There are other reasons to consider asset-based lenders for renovation or construction projects. Typically a bank raises funds for a mortgage by reselling it to a government agency like Fannie Mae or Freddie Mac. Banks won’t be able to resell any mortgage on a distressed property that falls short of FHA guidelines.Therefore a typical bank will likely deny your application if you are trying to renovate a distressed property. Asset-based lenders raise their funds from private investors and have money on hand, allowing them to see past the poor condition of any property you intend to rehabilitate.

The situation can become complicated if you finance your construction loan with an ordinary lender. Banks disperse construction loans according to a specific timetable and specific benchmarks. The lender could withhold funding if your projecting doesn’t go according to plan. This scenario could be a disaster and could leave you unable to pay your contractors or to continue your project. The regulations that stifle traditional banks don’t hamstring asset-based lenders so you can get increased flexibility when it comes the terms of a construction loan.

However, asset-based lenders outshine traditional banks when it comes to time-sensitive purchases.

When it comes to time-sensitive purchases, a hard money loan can be a win-win solution

A typical bank loan usually closes within 120 days, and the best investment properties don’t stay on the market for long. Even the most qualified borrower won’t see their application go through any faster because banks have to comply with their own guidelines and with government regulations.

Asset-based loans can close within a matter of days allowing you to complete a time-sensitive purchase. An asset-based loan gives you the flexibility to then refinance to a long-term mortgage, or to sell the property for a profit.

In short asset-based lenders are ideal for borrowers who know the potential of their project, who need flexibility or who need cash quickly to make the most of a potential investment.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
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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Obtaining a Business Loan in Arizona

In Arizona, every year thousands of people seek out loans to help smooth the transition into entrepreneurship. These business loans in Arizona can be provided by banks, private lenders and even governmental grant programs provided by the state.

There are almost 400,000 small business in Arizona with almost 300,000 with no employees or staff. Each year, 8 out of 10 businesses that have been in business for a year or less will fail. Lenders tend to avoid lending to businesses because of this high-risk factor. You may, however, need a business loan in Arizona for heavy expansion. Do not be surprised if you are not able to secure a business loan for the first two years.

Taking out a business loan in Arizona differs from a personal loan because you will need to provide proof of consistent revenues. The institution that you are applying to wants to verify that you are bringing in consistent income. You may be disqualified from obtaining a conventional business loan if the banks see your organization as high-risk. The high-risk assessment is determined by the bank calculating the number of sales, clients and contracts you obtained within the past year. If your company is not viewed as a growth company, a stream of increasing sales, then you will be denied a loan. Additionally. if you have a poor credit score you will also be denied a business loan.

The term and interest rate are dependent on the term of the agreement you sign. A business loan in Arizona can be made for five to ten years with interest rates of 10% to 20%. The loan may be renewable if you are struggling to repay the loan. The loan from a conventional lending institution most likely will want you to provide a personal guarantee as well as collateral of 2:1 to 3:1 to approve the loan. Understand that if your business fails then you will need to continue paying the loan or lose your capital.

Getting the Help you Need to Succeed

You will need the advice of a good attorney for the establishment of the business as well as a good CPA for financial setup which includes pricing of your product and a proper accounting system. You may consider, if you have employees, utilizing an outside payroll service so you are assured that the taxes are paid properly and you minimize your exposure.

If you are still determined to open your business and the avenue of securing a conventional loan is not a viable option, then you may want to seek non-conventional financing.

If you are starting a new business, seek out an equipment lender that will do a lease back of the equipment to you. You will also want to consider angel investors, credit cards, and friends and family. If you are purchasing an existing business then you will want to seek out hard money/asset-based lenders, A/R financing, and invoice funding. These avenues all have high interest rates attached to them and you will need to know that the business can cash flow the debt obligations. If you are seeking to secure a loan, contact Level 4 Funding for guidance and structure of the right loan or loans to make your dreams come through.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
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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How to Use Spec Construction Loans for Investing in Real Estate

Are you thinking about purchasing an existing property or rehabbing a property in need of repair? If you are, you’ll want to investigate builder or spec construction loans. These loans are used to finance single property, multi-unit residential properties or commercial buildings to sell for a profit.

A number of projects with high Return on Investments (ROI) are passed up because the builder/speculator cannot secure a conventional construction loan from a bank. Hard Money spec construction loans can be used for new builds, rehabilitated older property to be sold for a profit, a group of homes, a multi-family dwelling or a commercial property. If the project makes sense, and you can cash flow the higher interest rates for the loan, then a hard money loan is right for you. They are easier and quicker to secure with little concern about credit or income details, so long as the project makes sense and the builder/developer has sufficient experience. A concern will focus on the profitability of the project.

Hard money loans are short term in nature. These loans can be used for the purchase of a new property or refinance an existing project. These loans usually do not cover the carry cost during construction but you can fold into the loan cost of construction/renovation plus a short period for selling or renting the property. At closing these loans (spec construction or rehab) will have an escrow established and disbursements (draw) for each stage as the project is completed, pay for the property or refinance of an existing one. Payments on the interest are often due fro the first month. Borrowers will need enough cash reserves or cash flow to pay the holding costs, including but not limited to the payment on the loan, taxes and insurance.

The construction loans are draw loans, in other words, as the stage of construction is completed and the city/county and loan company’s inspector signs off, the lender will pay (issue a draw) for that stage of the project. You need to have enough funds to float these expenses until these funds are released.

Some of the Different Types of Loans

Fix and Flip: Do not miss an opportunity. Hard Money loans offer you the opportunity to purchase the property, rehab and sell for a handsome profit. You will need to demonstrate that you have the experience and expertise to buy, rehab and sell for a profit. Purchase and Rehab: If you have a property that is old and rundown, you will need to demolish it and rebuild to the expectations of today’s buyers or renters. Spec Construction Loan or Purchase and Build: If you have a lot and want to build a home or multifamily project, then this loan is your vehicle to begin the project. No owner occupied and only for resale or rental income.

In order to qualify, consider the following: Underwriting based on asset, no proof of funds or seasoning required, no 4506’s, foreign nationals are welcome as well as most credit scores. Having experience in building/marketing real estate is also an important consideration.

You’ll find terms up to 20 months interest-only payments, minimum loans that vary, but can start at about $350,000, and 4 to 7 points with interest rates that are typically around 10 percent. If you are considering proceeding with a purchase or rehab of a property, contact Level 4 Funding to team up with you and guide you to the loans that best fit your needs.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC  Private Hard Money Lender
Arizona Tel:  (623) 582-4444
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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What is Hard Money?

Many people have heard the term hard money but they do not have a good understanding of what it is or how to use it. Having this understanding can open up many opportunities for borrowers.

Hard money is a type of loan which is offered to a borrower based on the value of the collateral and not the personal financial position and history of the borrower. This type of loan is sometimes referred to as asset-based loan financing. The collateral is normally real property as opposed to personal funds in a retirement account or other material goods.

Because of the unique nature of a hard money loan, the lender is not the traditional bank or credit union that most borrowers are familiar with. These types of loans are offered by private investors or private investment companies. Being that the loan is from a private entity, the terms, conditions and processing time of the loans is quite different from the traditional bank loan application and process. Lenders are free to tailor each loan as they see fit and to meet the needs of the borrower. This is because the lenders are not regulated by state or federal law as traditional banks and lenders are. But these private lenders are still in business to make money so there are best practices which most hard money lenders follow.

As mentioned before, the loans are secured with collateral which is real property. To assure that the investment is protected, lenders use what is called loan to value when evaluating a loan request. The amount of the loan is determined by the value of the collateral property. Most lenders are willing to loan 65% to 75% of the value of the collateral. This insures that the collateral will always be more valuable than any outstanding balance on the loan.

There are Pro’s and Con’s

Asset based lending offers a borrower opportunities based on criteria other than personal credit and financial standing which can be very helpful. In addition, the terms can be very flexible to meet the borrower’s needs. But the lender is also seeing some benefit from funding the loan. The interest rate on these private loans is normally higher than that of a traditional bank loan. In most cases these private loans offer interest rates above 8% and they can range up to as much as 25%. But borrowers are willing to pay the higher rate to secure the loan that they need.

Shop Around

Just as when applying for a traditional loan from a bank or mortgage lander, it is always a good idea to shop around for the best rate and terms available. There are more private lenders out there than most people are aware of. With the higher interest rates of private loans it is even more important than ever to secure the best rate possible. Investing a little time to find an appealing interest rate on a private loan can save you a great deal of money over the life of the loan.

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

How to Benefit From Hard Money

Many borrowers have heard the term hard money but are not familiar with this type of loan or how it can be used. But understanding these loans can open up many opportunities for financial success.

A hard money loan is normally a short term loan that is offered by an individual or private lending group. The loan offer is based on the value of the collateral and not the borrower’s credit score or credit history. This makes asset based lending a very useful tool for certain real estate deals and other conditions when a traditional bank loan is not possible.

Being funded by a person or a small group means that a loan application can be very quickly evaluated and granted. This makes a hard money loan very attractive to a borrower who need funding very quickly to secure a purchase. The drawback is that the loan will carry a larger interest rate and also higher fees in most cases. But the borrower is willing to pay a higher rate for faster funding. Some borrowers will then refinance once the property is purchased while others will keep the short term loan as they are planning to flip the property very quickly.

Another reason that these loans are popular is the fact that they are based on the collateral and not the borrower’s credit. Having bad credit or no credit is not a crime but sometimes it can feel like it is. Getting a traditional loan or mortgage with bad credit is nearly impossible. So people with less than good credit are happy to pay a higher interest rate to get the loan that they need to purchase a property. And the lenders are willing to take the increased risk of lending to a person with bad credit because they are earning better interest. It is a win for both parties involved in the loan.

Novice’s In Real Estate

Getting into the real estate business is not difficult but you need to have the funding to get through the first few deals. Once you have bought, renovated and flipped a few properties, you will have built up a nest egg to uses for future purchases. But getting the money for that first purchase can be very tough. Banks and mortgage lenders are not interested in taking a risk on an unknown entity. But hard money lenders are willing to assume the risk to reap the greater reward.

Many Reasons to Pay the Higher Rates

Being money conscious or even thrifty is good in any business. But there are times when you just need to pay a little bit more to get what you are looking for. Having bad credit, no credit or no credit history are all good reasons to pay the higher rate to secure an asset based loan. The increase in the fees is a much better option than not getting the loan and missing a great opportunity to make a deal and turn a great profit.

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage

Tips for Success When Using Hard Money Lenders

Borrowers can tend to be in a hurry when they are seeking hard money loans. Sadly that can lead to making a poor choice as a result of not checking out options for hard money lenders.

Finding the perfect property can be very exciting. The potential for making a great profit can make many new real estate investors rush through the process of selecting a lender. But using hard money lenders is no different than using a bank or a mortgage lender. And borrowers should always follow the same process when selecting their lender.

As with any business deal, you will want to complete some research on all potential lenders. This will tell you how long they have been in business, who they typically loan to and the types of loans that they normally offer. You might also be able to read customer reviews online or testimonials. All of this will let you know what other borrowers experiences have been with each of the hard money lenders that you are considering.

Talking to each lender will also give you a good feel for their level of interest in their clients. If the lender asks about your plans for the property, how you are financing the repair expenses and about comps in the area then he or she is interested in not only getting his or her money back but also in your success. Working with a lender who has a genuine interest in seeing you succeed will make the process much less stressful. Hard money lenders who are interested in creating long term relationships will express interest in each project. In addition, they will be more willing to work with you on creative or different terms than they normally offer.

What to Watch Out For

Bait and switch is a sure sign of an unethical lender. In these events, the lender offers great terms that the borrowers can’t refuse. Then as soon as the borrower verbally commits to the lender, the lender supplies a loan offer with drastically different terms. In most cases the interest rate is much higher and there are other hidden fees added to the final cost of the loan. A catch and release situation is where the lender charges several fees upfront that the borrower must pay before getting the actual loan offer. Once the borrower pays the fees then the lender ignores the borrower and never provides a loan offer. The lender gets to keep the fees and the borrower is faced to find a different lender. Both of these cases are certain signs of dishonest lenders.

Just Another Service Provider

When you are seeking any type of loan, don’t be intimidated by the lenders. Think of them as you would any other service provider and complete your due diligence to be sure that you are doing business with a reputable lender. An honest lender will not be offended by questions about their standard terms or loan practices.

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
clip_image002clip_image004clip_image006clip_image008

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.

Technorati Tags: commercial loans,commercial lending,commercial mortgage