Property flipping is all the rage thanks to a few cable TV networks. And used properly, Arizona fix and flip loans can make flippers rich.
It seems that there are about a dozen or more fix and flip shows on TV at any given time. They vary in location and the type of properties being flipped but the concept is always the same. A flip is a fast process that entails buying a property, increasing the value with renovations and repairs and then selling the property just as fast as possible. The goal is to carry Arizona fix and flip loans for as short a period of time as possible to reduce the interest you are paying and to increase your profit margin. And the fastest way to accomplish all of this is to make the initial purchase with a hard money loan.
These privately funded loans are also known as asset-based loans because they are based on the value of the property being purchased rather than the borrower’s personal creditworthiness. The property being bought is the collateral and is at risk if the borrower defaults on the loan. But there are many benefits that outweigh the less than traditional nature of hard money fix and flip loans.
In most cases, a hard money loan request can be processed, approved and even funded in less than two weeks. This is because the lender’s due diligence is in researching the property being bought and not a person’s credit history. A borrower with a credit score of 550 would have a hard time getting money from a bank but most hard money lenders are willing to work with the credit challenged borrowers. The lender will sometimes request that the borrower pay upfront for an appraisal of the property but in most cases, all of the fees are due at closing when the loan is funded.
The Cost
Nothing in life is free, and hard money Arizona fix and flip loans are no exception. The lender is free to charge a higher interest rate as he or she is not required to follow the same rules and laws as a lending institution. In addition, the lender can determine the fees that will be charged. In most cases, hard money will cost five to ten points more than a traditional loan. But for the fast funding and the ability to secure the loan with a low credit score, many flippers are willing to pay the higher rates.
Many Perks
Fast funding and low credit score requirements are only two of the benefits of hard money. These loans are short term which works very well with the fast pace of the fix and flip segment of real estate investing. In addition, because the lender is a private individual, you are likely to be able to have the rest of the loan terms tailored to meet your needs. This could mean variable payment amounts, longer payment cycles or even a balloon payment at the end of the loan term. Knowing all of these perks helps to justify the cost while demonstrating why so many flippers are fond of using Arizona Hard Money Loans.
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: 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.
© 2019 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.