If you have done your research and have decided to pursue a hard money loan, getting approved should be no problem. However, sometimes it is; and that can be truly disheartening. But, don’t give up! There are ways for you to adjust your approach and get the money you need.
First, you need to keep your deals at our below 65% LTV. That means that you are not asking for an amount that is more than 65% of the property’s value. But, that’s not all there is to it. So much more goes into hard money lenders in Arizona decision than you even know.
Often, it is not just the dollar amount that matters. While it is important to keep that LTV at a reasonable amount, keep in mind that many lending institutions send out evaluators and appraisers to inspect properties on their own terms. It’s not that they don’t trust you or your appraiser’s judgment, they often just need to see it for themselves before making their decisions.
Like I mentioned before, it’s a tough situation to be in when you feel that your hard money lender is being harsh on you and unforgiving to your circumstances. However, they are trying their best to work with you, but are taking such a significant risk in loaning to you, that they have to protect their assets as well.
One thing hard money lenders in Arizona tend to shy away from is sketchy neighborhoods. This is true for fix and flip loans and investment loans. Several factors are taken into account when assessing a neighborhood: crime rates, cleanliness, the real estate market in that area, percentage of ownership vs. rental, etc. Don’t plan on getting a large loan to fix up a mansion in the ghetto. It just won’t work.
Hard money lenders in Arizona want to see a return on their investment. That’s why they’re in the business in the first place; makes sense, doesn’t it? The funds available for these loans come from private investors looking to make a profit on the money they aren’t needing at the time. They need to know you can pay; if you can’t, you may not get approved.
Hard money lenders in Arizona are there to help you out, so understand their risk, do your research, and keep pursuing your loan until it works out.