Funding Your First Hard Money Loan


This post includes some Key Factors in investing, especially for all ‘new investors’. In fact, anyone that is planning on investing using a ‘Hard Money Loan’ should Read This First!

Real Estate investing for the first time using a Hard Money Loan

The most important deal in your career of real estate investing is going to be that first investment. That first real estate investment, because it’s that first investment you do in purchasing real estate that will open doors for you. Generally, that first investment has more of a success rate with those who use a Hard Money Loan.

Why is the first real estate investment more successful with a Hard Money Loan?

The answer is simple: New investors have trouble in getting their first loan or two, until they have established a little capital, and a Hard Money Loan is basically the only type they will be able to get until that happens. It’s best to think in terms of a tourist when investing, that is to say; New investors who are about to invest in real estate needs to think in the same matter as a tourist thinks when planning to take a trip.

New investors need carefully plan all the right moves, deciding on the strategy to use, how to get the most for your money, which real estate is going to bring in the most profit for the least amount, and etc., another important factor would be what is the real estate’s value on the market. Keep in mind, that it is much easier to get a Hard Money Loan in some states that it is in others.

This is partly due to the different variations of the real estate laws in each state, many of which seem to be hostile towards investing in real estate, as well as being against the process of the Hard Money Loans. Of course, with due process of the law being put in place by our very own congress, I’d say that is where the blame should be pointed.

In other words, it will help to learn of all the different states and their laws on real estate investing, knowing what’s going to be there for you when doing investments in those states, and know if they are going to be available to you when investing in real estate using the Hard Money Loans.

Learn what the states are more likely to approve the Hard Money Loans, and know the hottest areas for new investors are. Don’t forget to check-out how they are doing in the market, and the places you’re more likely to be approved for the Hard Money Loan.

7 Best Arizona Cities For Real Estate Investments

The best Arizona cities for real estate investments, might surprise you.  If you’re looking for the best markets to invest in real estate in Arizona, you’re not alone.  Arizona is a hot bed for real estate activity but these 7 cities in Arizona are the best for real estate investments.  Each of the cities in this list have been ranked by real estate guides and experts as being growth areas that should appreciate in value.


As one of the strongest real estate investment areas Laveen boasts less than 1 percent vacancy rate.  Add to that the neighborhood has an average rental return of over 11% it’s clear why Laveen is a great place to look for real estate to invest in!


Scottsdale might be part of the valley, but it is a unique suburb and attracts people from all walks of life.  With exciting nightlife, highly rated restaurants, amazing hotels, and unique western flair its not surprise that many visitors choose to make Scottsdale home.  As a desirable area in the valley the real estate investing opportunities are in no short supply!

Queen Creek

Queen Creek has grown in popularity due to both closeness to the Mesa Airport and real estate costs.  With it being such a popular area, the vacancy rate is low and returns for rental properties are virtually as high as Laveen.

El Mirage

El Mirage has benefited from growth due to its great affordability.  In fact the median home value in El Mirage is below $110,000.  The area is home to over 30 restaurants, coffee shops, and bars.  If you’re seeking a prime opportunity, El Mirage might have the property you’re seeking.

South Phoenix

South Phoenix also boasts a very low vacancy rate and healthy return rates on rentals.  South Phoenix is also close to popular attractions such as the zoo, Botanical gardens, and Tempe with Mill Ave and Tempe Town Lake.  This makes South Phoenix a great place for investors to snatch up properties to renovate, rent, or to sell.

Maricopa City

Maricopa city has also seen an increase in residents which has dropped the vacancy rate below 1 percent.  With approximately a 10 percent return for real estate investments Maricopa City is a great place or investors to seek opportunities.


While Tucson is a ways south of Phoenix, it is still a great opportunity for real estate investors.  With 3 national forests near by, great culture, and mild climate its no surprise that Tucson is a growth market.  It attracts both buyers and renters from all over the country!

Real Estate Investment Loans

Finding the property it step one, getting it financed is step two.  Brad Loans offers real estate investment loans and gets the job done faster than traditional banks.  With programs for both real estate investments and fix and flip options our team can help you get the financing you need quickly.  As a hard money lender we also don’t require the mountains of red tape traditional banks do.  Click here to: Start your real estate investment loan application today!

Many Hard Money Lenders will ‘FORGET’ to let you know these things:

Other Hard Money Lenders are not going to be too happy about me giving this information out, however, I just feel that by not telling this it would be the same as deceiving people. I have become quite tired of hearing how some of the Hard Money Lenders take advantage of investors, yes, new investors especially. They do this by giving them information that is not in its entirety, anything that will rush the close of a deal.

What makes it worst, is when they fail to give any information at all. For example, there are expenses incurred when making a purchase for property that is not included in the loan itself, the Hard Money Lenders doesn’t mention this part up front. Lenders hardly ever will mention that there will be other fees and charges that you, the investor must come up with, and that is why this is being written on your behalf.

100% Financing, yes, there are three different types:

I have heard that most new investors thought there was only one type of loan that offered 100% financing on real estate investments, this is not true. Actually, there are three types of loans that offer 100% financing on real estate investments. You have nothing to feel awful about, it wasn’t your fault the lenders held back important information such as t his. The main reason for bringing this up now is because nobody else is going to.

If you already know this, that’s great, but, if you don’t, listen-up; only a small majority of Hard Money Loans will cover anywhere from 60% to 75% of the value on the property to be purchased and/or the value of the property after the necessary repairs have been made.

In a case where you have stumbled upon a terrific deal, the Hard Money Lender can decide to finance it 100%. Which brings us to the first type of 100% financing.

100% Financing – Type (1):

This type covers 100% the property cost, no more, no less. However, there are other fees involved, and the do add up, and  fast. Here are some of what those fees are: Closing costs, repair costs, earnest money, escrow, insurance fees, mortgage insurance fees or title insurance, among a few others that could come up.Usually, when lenders refer to 100% financing this is the one they’re referring to.

100% Financing – Type (2):

Occasionally a Hard Money Lender will finance 100% on the purchase price, plus the repair costs involved, and sometimes even the closing costs, of course, it would have to be some fantastic deal you got a hold of for this to happen. However, as the investor you would still be accountable to come up with the other fees, such as: The closing costs, earnest money, inspection fees, evaluation fees, insurances, and etc..

100% Financing – Type (3):

This one is referred to as the ‘Holy Grail’ of investment financing,. It does just what it says: Gives 100% financing that covers ‘EVERYTHING’, and I mean everything. The price of the property to be purchased, repair costs, earnest money, insurances, escrow, closing costs, ‘EVERYTHING’. This will be the only financing option available that offers the investor the opportunity to land a deal without any upfront cost out of their own pocket. You’ll not find this type of financing offered by many, yet, we offer it to you.

Before giving an explanation on how we can offer a true 100% financing to clients let’s first explore the importance of the starting money:

You could take $1,000 dollars and turn it into $10,000.

The following is an itemized table of everything:

Common Starting Money Items
Item Cost
Earnest Money $500 – $1,000
Evaluation $600
Inspection $500
Total: $1,600 – $2,100

These are among the most common things to be over looked during the process of a Real Estate Loan:

  • Repair costs
  • Earnest money
  • Insurances
  • Escrow
  • Closing costs
  • mortgage insurance fees
  • title insurance.
  • Home owners insurance

There are a few more of these as well…

Phoenix Hard Money Lender

Our mission is to always have your wishes and interests in mind, and our goal is to keep a satisfied customer by ‘opening the door to their financial freedom’, and so that our customers will return to us the next time they need a loan. Furthermore, we do not anticipate gain from any of customers. Our gain will come from treating our customers fairly, and in due time.

When we hold our heads up its not to look into the clouds, but because we can feel proud, and good about the way we do business. By helping you succeed the first time around, we are hoping that you will return again, and again, and even tell of your great experience to all your friends and family so they’ll also come to us.

Give us a call today if you are interested in hard money loans for fix and flip, finishing construction,refinancing your mortgage, buying land, or need loans for other investment opportunities but have bad or no credit. Give Brad Loans a call today at (602) 999-9499.

FHA Home Loan Pitfalls

FHA Home Loan Pitfalls

FHA Home Loan Pitfalls

FHA loans are quite popular simply because it makes it easy for most people to purchase a home. Home ownership is a reality for many people, but these types of loans are not for everyone. Ensure that you fit the right type of profile and that you understand the disadvantages of getting a FHA loan before you fall in love with getting one.

Highlights of a FHA loan

Even if you have limited funds for a down payment and have damaged credit, you can qualify to get a home loan with a decent interest rate.

Down Payments: a FHA loan will let you put as little as 3.5% down. This will allow you to purchase a more expensive home with less money, and you are able to reserve some funds for improvement projects or other types of goals.

Credit issues:Those who have a troubled credit history will often have a hard time of getting approved with a conventional lender. FHA backing will allow you to be approved with a low credit score.

Home Improvement: FHA 203k loans will let you fund home improvement projects and buy a house at the same time. Combined with other types of features, they also make it easy and inexpensive.

Drawbacks of using a FHA Loan

When you are looking to purchase a home, it is wise that you evaluate whether or not getting a FHA loan will help you. Look at the bigger picture and then consider all the financial goals.

Low Down Payment: Low down payments can be a red flag. Putting 3.5% down could indicate you are financially stable and a home loan may be a higher risk.

It is worth waiting until you can save up for a larger down payment or looking at a less expensive home? Remember, the more that you borrow, the more interest that you will pay, which will make your house more expensive.

Upfront Insurance: If you put less 20% down, it means that you will be required to pay for mortgage insurance, with FHA loans having 2 types of insurance that you will need to pay for the whole life of the loan.

There will also be an upfront charge of 1.75% and most borrowers tend to wrap this particular fee into the balance of the loan. Remember, the more that you borrow, the more interest that you will pay. You will pay more than 1.75% unless you write a check at closing. A larger loan will also mean that you will have a larger monthly payment.

Ongoing Insurance: You will also have to pay monthly mortgage insurance. Ongoing insurance premiums are between 0.80 and 1.05% of the loan balance, even though it can go as low as 0.45% if you have a 15 year FHA loan. This extra cost means that you will end up paying additional every month. Whereas, private mortgage insurance may be cancelled once you have over 20% equity within your home. However, FHA insurance is unable to be canceled unless loans were obtained prior to June of 2013. Basically, you will have to refinance or pay the loan off to eliminate that cost.

Loan Choice: You will have limited choices when getting a FHA loan. For many borrowers, there is a 15 year or 30 year fixed loan which is great, so there isn’t a problem. But, there are situations when an interest only mortgage or adjustable loan is much better. Don’t just use them to lower your payment, make sure you have a bigger plan.

Property Limitations: Getting a FHA loan approved means that the property meets certain standards. For instance, basic safety and health requirements are met. If you are looking for a fixer upper, a good bargain, or a foreclosure, the FHA loan won’t work. For the properties that are move in ready, a FHA loan will work. But if you are buying a condo it could be challenging. If there aren’t enough units in the building that are owner occupied or there are other issues, a FHA loan may not work.

Qualifying: FHA loans may not always get approved. You will still need a minimum credit score, and need documents that state you have plenty of income to repay the loan. For qualifying for the lowest possible downpayment, you’re going to need a 580 or higher on your FICO score. However, you may get approval with a score under 580 if you can provide a higher down payment.

Seller Hesitation: There are some situations that FHA loans could be a disadvantage when you are buying a home. Sellers want to know about their potential buyers, and a FHA loan doesn’t say strength. What is more is that the seller may fear that the extra requirements are going to slow down the deal. If you are purchasing in a hot market, then try a different financing form.

Alternative Loan Sources

FHA loans aren’t the only way to get the house you need.  Banks will work with people with good credit, hard money lenders work with fix & flip investors and home buyers with challenged credit, and military personnel are many times able to secure VA loans.  Choosing the right solution for your situation helps ensure that you get the home you need.

Bank Loans

A standard home loan that isn’t backed by FHA may solve most of the issues above. Even if you think you won’t be approved, it is worth trying for a conventional loan so that you can see what is out there. A conventional loan will let you have more flexibility, potentially purchasing a home with a 5%-10% down payment.

Hard Money Home Loans

If an FHA loan isn’t right for you; a Hard Money Loan might be the best way to get the house you need.  Hard money lenders can loan to borrowers that have bad credit, no credit, and a wide variety of other credit challenges which prevent them from getting conventional loans or FHA loans.  In fact with hard money lending you can qualify for a zero money down home loan with cross collateral. Read more about: How to quality for a hard money loan.

Military VA Loans

If you’re a member of the armed forces you might be eligible for a VA Loan for your home.  This is a great opportunity provides to veterans to purchase houses through a government funded service.  Interest rates are low and many times they work with challenged credit situations. Click here: For more information on VA Loans.

 Phoenix Valley Hard Money Lender

If you are looking for a hard money lender in the Phoenix Valley, Brad Loans is your source for the loan you need.  We can help you purchase a home to live in, or we can help you fund a real estate investment opportunity such as fix and flip properties.  We work with people with bad credit, no credit, and can overcome many of the roadblocks that standard FHA loans and traditional bank loans have.  For more information about how Brad Loans can help you get the money you need please call us at 480-948-0880 or fill out our hard money loan application.

What Is A Bridge Loan?

What Is A Bridge Loan

What Is A Bridge Loan

If your Googling “What Is A Bridge Loan“, this post should help clarify. Here Brad Loans by eMortgage Inc explains what a bridge loan is, how it works and what it is used for.

What is a bridge loan?

A bridge loan is a temporary loan that will bridge the gape between sales price of a new home and your new mortgage, if the old home hasn’t sold yet.

The bridge loan is secured to the existing home. The funds are then used as a down payment on the new home.

A bridge loan happens to be quite popular within a certain type of real estate market. Whether or not that it is a good option will depend on various factors. The reason that a buyer will take out a bridge loan is because they want to buy another place before they sell their existing home. That may sound great, but a bridge loan does have risks.

For instance, whenever a home buyer is purchasing another home before selling their home, there are 2 ways to find the down payment for the new home which is financing through a home equity loan or a bridge loan.

It is best to wait before buying a home and selling your home first, but most think its best to locate their move in home first.

If you are certain that your existing property will sell, then it will remove fears about what happens if it doesn’t. You may want to talk to an advisor before you get a bridge loan. The main advantage of a bridge loan is to avoid a bad offer and make the move up offer more attractive to a seller.

Normally, a home equity loan is much less expensive, but a bridge loan has more benefits for certain borrowers. Additionally, most lenders will not lend a home equity loan if the home is on the market. Smart borrowers will compare the benefits between the 2 types of loans and find which one is better for their situation and plan ahead before making an offer on another home.

A big benefit for bridge loans is that it allows you to purchase a new home without worrying about selling right away.

Is the balance off? The account balance that is. Below is how much money that you should keep within your savings and checking accounts.

Get it right! In the seller market, most sellers won’t accept a contingent offer. If you are selling a home, that may mean that you can’t buy a home without contingency.

How does a bridge loan work?

Most lenders will not have set debt to income ratios or FICO minimums guidelines. Funding is actually done with an underwriting approach. This requires guidelines in long term financing that is obtained for the new home.

There are some lenders that will make a conforming loan to exclude bridge loan payments for qualifying purposes. This means that you are qualified to buy the new home by adding your existing loan payment onto the new mortgage payment. The reasons that you may be qualified on 2 payments is because:

  • For a short time, you will own 2 homes.
  • Many buyers have an existing mortgage on old home.
  • Buyer is likely to close new home purchase before selling old home.

If the new mortgage is a conforming loan, then lenders will have a bit more ways to be able to accept a much higher debt to income ratio by being able to run it through automated underwriting programs.  If the new loan is a jumbo loan, then many lenders will restrict it to a 50% debt to income ratio.

Average fee for a bridge loan

Rates will actually vary between lenders, but below is an average estimate for a bridge loan in California. The interest rate will fluctuate, but for this instance, we will use 8.5%. These types of bridge loans will not have payments for 4 months, but interest will build up and be due whenever the loan has been paid based on the sale of the old property. Below are sample fees:

  • Drawing/wire/courier fee: $75
  • Recording fee: $65
  • Notary fee: $40
  • Title policy fee: $450 or more
  • Escrow fee: $450
  • Appraisal fee: $475
  • Administration fee: $850

Additionally, there will be a loan origination fee for the bridge loan that is based on the loan amount. Each point will be equal to 1%. Below are the average fees and they will vary.

  • $150,000 – $250,000 = 1 point
  • $100,000 – $150,000 = 0.75 point
  • $25,000 – $100,000 = 0.50 point

Home Purchasing Benefits of Bridge loans

  • If there is a contingent offer to purchase, the seller has a Notice to Perform, then the purchaser may then remove any contingency and move forward with the purchase.
  • The buyer can put their home on the market immediately and buy without restrictions.
  • A bridge loan may not require a monthly payment for several months.

Home Purchasing Disadvantages of Bridge Loans

  • Buyers are often qualified by a lender to own 2 homes and most may not meet this requirement.
  • Making 2 mortgage payments plus interest on a bridge loan may cause stress
  • Bridge loans will cost much more than a home equity loan.

Bridge Loans In Arizona

If you are looking for bridge loans in Arizona, Brad Loans by eMortgage can help. We offer bridge loans, hard money loans and fix and flip loans in Phoenix, Arizona and the sourounding cities.

Translate »