Making extra cash by renting out a property is definitely doable. However, for first time buyers and flippers, it’s important to evaluate all the situations before becoming indebted to a flop.
Obtaining funding from traditional lenders like banks and credit unions is easier when you have a strong credit score and a history of successful fixer uppers. Traditional lenders aren’t flexible like Arizona Hard Money Lenders when it comes to lending out money, due to the risks that accompany possibly unreliable borrowers. For those who may not qualify for traditional financing, Arizona Hard Money Lenders are private companies or investors who will lend money to people with imperfect credit scores, but with a cost: high interest rates and fees. Not to mention, a quick repayment period.
Many experienced people who fix and flip houses utilize services offered by Arizona Hard Money Lenders. They are usually able to afford higher rates, and with a fast sale are usually able to satisfy the needs of a quick repayment period with the sale of the flipped home. Not everyone will be able to meet these requirements, especially first time flippers. While they offer flexibility within the relationship, transparency, and general speed, the high costs can be risky for people delving into the housing market for the first time if proper research isn’t done regarding renovations. If you don’t have great credit, comparing traditional and untraditional lending options may seem like the first step to delving into the loaning process. However, untraditional hard lending money options do not compliment a long-term rental property where cash is coming in over a lengthened period of time. Their quick repayment period would make it difficult to repay, unless you had some extra cash on hand. Chances are, your needs of a loan eliminate that as an option.
Requirements of Arizona Rental Property Loans
Other things to consider are down payments, cash reserves, and mortgages. Traditional loans for rental properties will require a 20% down payment, and a cash reserve of at least 6 months. Another strong stipulation of banks is that they won’t approve more than 4 mortgages. Depending on your situation, a mortgage for a rental may disqualify you. Equity line of credit, the Federal Housing Administration FHA, or Veteran’s Administration VA are other sources to look into when the short repayment periods of Private Money Lenders in Arizonaand the strong stipulations of traditional public lenders aren’t working out.
Renting out a property isn’t as simple as just collecting the rent. In addition to obtaining the Arizona Rental Property Loans, there are other things to consider. Factors such as home owner’s association, utilities, and possible renovations are other sources of potential financing. Being accountable and aware of your cash flow is going to make the process of financing a rental so much easier and save you stress in the long haul so that, when it’s time to collect your check, you can put it to good use.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
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 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.