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Updated about 1 year ago on . Most recent reply
Private Money Lending / CA Usury Laws
I have an opportunity to invest in a private money deal for a fix and flip with a 15% return, however, I was told that CA usury laws only allow 10% returns for private lenders. Does anyone have an insight on this?
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#5 Private Lending & Conventional Mortgage Advice Contributor
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#5 Private Lending & Conventional Mortgage Advice Contributor
- Lender
- Los Angeles, CA
Usury applies to all loans, @Jennifer Clark. Licensed CA real estate brokers, through the DRE, get a usury exemption if they originate the loan. This will enable you to charge any interest rate you can get.
It’s in your interest to use a CA broker since they will provide a separate set of eyes on your deal, and will also have access to vetted paperwork. Plus, CA RE brokers are fiduciaries, so they must legally act in your interest.
All CA private/hard money lenders will use a broker, so call around and ask if they will originate your loan for you.