Should You Be Using a Hard Money Lender for Arizona Rental Property Loans?

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Should You Be Using a Hard Money Lender for Arizona Rental Property Loans?

In what situations do Arizona Hard Money Lenders work well with rental property owners? And should they be used at all? Read more below to find out!

Most people are referred to Arizona Hard Money Lenders when they do not qualify for traditional loans from banks or credit unions. Arizona Hard Money Lenders are private, untraditional lenders who do not use the same approval process when determining what borrowers qualify for hard money. They focus on the property as an investment. Collateral comes before the borrower’s financial history. In this way, they are able to approve a wide variety of borrowers that traditional lenders cannot approve. However, just because they offer an easy approval, it doesn’t mean they are right for you. When it comes to using a hard money lender for funding for rental property loans, you really need to consider your timeline and budet because, generally, they are only used for short term projects.

Timeline and Budget

Arizona Hard Money Lenders have short repayment periods. This usually means they are great in cases of fixer uppers. They can get you money fast and, if you are able to fix, flip, and sell your property successfully, you are able to start repayment right away. So, when it comes to rental property loans, Arizona Hard Money Lenders are usually not a good idea. The profit you are making off your rental is coming in month by month—this usually is not enough to satisfy their financial requirements. Not only that, but they have high interest rates and fees. This is not a good combination if you are just getting started on a profit from your property. If, however, you need to fix something in the property fast, it may seem a good idea to turn to your local hard money lender. They can get you money usually within the week, if not sooner. That is fast compared to traditional lenders who usually take at least a month, if not more. Speed can be key in determining the outcome of some situations. If you’re between tenants on a property and need funds to fix an issue quick, Arizona Hard Money Lenders could be an option. They are known to offer loan extensions and, depending on the size of the loan and when your next tenant is coming in, the risk could be worth it.

Is Hard Money Right for You?

Generally, the answer, for long term options, is no. A better bet would be to go to your local bank for a traditional option for your rental property loans. Timeline and budget need to align and, with hard money lenders, they are not as flexible. High rates and short repayment periods don’t align themselves well with a long term project where a profit is coming in slowly. Despite a profit that is accumulating, it won’t fare well with the interest rates of your private hard money lender—extension or not. So, before deep dive into the housing maket, make sure you have all the info you need to be successful with your property and loan decisions.

Dennis Dahlber Broker Ri CEO Level 4 Funding LLC
Dennis Dahlberg


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.

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