Thinking of becoming a private money lender? Vet your borrower properly!!

[Jonathan Chan]

If you're interested in adding real estate lends as another tool in your toolbox, these are the steps I've learned you should take to vet your borrower before looking at any of their opportunities!

• Background check
• Credit check
• Past performance. Look at purchase HUDS, statement of work if it was a renovation and the sale HUD to make sure they made money on the deal.
• An organized and easy to navigate borrower's package.
• Security documents to collateralize the loan against real, tangible property.

I also like to throw in some communication clauses with consequences for ghosting.

Cheers!

[Chris Seveney]

@Jonathan Chan

I am all for communication - but how do you enforce that communications policy? You gonna put someone in default because they didn’t answer a phone? I

when underwriting we also want to know the exit strategy of the borrower to make sure they are not limiting themselves to a single exit