Private Lending companies and investors seem like great options when your credit history won’t allow you to receive an unconventional loan. However, there are a few caveats you should be aware of so you know if you are making the choice that’s best for you.
Arizona Hard Money Lenders are untraditional financing options. Usually people are referred to these types of investors after a rejection from the bank. They can usually offer these three things: a flexible relationship, proposal acceptance, and speed.
A flexible relationship and proposal is almost guaranteed. Because they can accept people based on value of the property, they are less concerned with your personal financial history. Banks typically have high standards regarding credit score and income, and they like someone experienced with a strong portfolio if they money is for something like a fixer upper. If you can’t get approved for a loan by the bank, you will likely be approved by an alternative lender. In addition to flexibility, alternative lenders can also provide transparency within the relationship.
Speed is something else Arizona Hard Money Lenders can offer that banks do not. While banks may take as long as a month or more to begin the process, private investors can usually begin the process within the week—if not the same day. This is an attractive advantage for people who are competing for property or need to prevent a foreclosure fast. Sometimes, the difference between success can boil down to the timeline.
Things to Consider about Arizona Hard Money Loans
Arizona Hard Money Loans are unlike other loans because of their high interest rates and quick repayment period. These types of loans usually do not work well for somebody who will need more time to repay the loan. Fixer uppers typically find Arizona Hard Money Loans affordable, and are able to utilize the money from the sale to repay the loan fast. If you need the loan for a long-term rental property, Arizona Hard Money Loans are probably not ideal for you. The short repayment period owed to the lender is immediately contrasted with the money you would be collecting from rent, long-term. Considering where you are relying on the money for repayment is really important, especially if there’s a process involved with the purchase of your land—something as small as even finding a renter can factor into this decision.
Evaluating Personal Circumstances
On first glance, Arizona Hard Money Lenders seem like great options. With individualization and flexibility, they offer what a lot of banks can’t and more. However, when pursuing a hard money loan, it is important to put in the research. What kind of plans are you making and how does repayment fit into it? What are your goals for the property and what kind of timeframe does it operate on? With Arizona Hard Money Loans, it’s also important to consider the legitimacy of the source—are they reputable? What kind of terms and fees are within their list of agreements? If you need help analyzing your personal financial situation, real estate attorneys can provide a helping hand to determine if this is the right choice for you.
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.