private money

[Dan Ossman]

If I know of someone that is in contract on a property but can not find financing for that property. If I where to bring them a private money lender to make their deal possible, should I ask to be compensated for connecting the two? and how much? Lets say that the private money lender is bringing 100k to the deal. thanks

[Ben Dunavent]

Originally posted by @George Krajacic:

Hi Dan,

I do not know Ohio’s lending laws and regulations but in California most of the private money loans are made thru the brokers just as hard money loans are. The reason being is by using a broker private lender can avoid usury law and charge higher interest rate. Broker arranging the loan charges points for the effort. So the broker can share portion of his/her points with you (0.25 to 1.0 point). However if you do not have a real estate licensed you are not allowed to discuss loan terms or be involved in any loan negotiations. So the best way to get paid discuss your finder’s fee with broker first and if you come to an agreement than introduce borrower to the broker. Since you are in Ohio above might not apply. The best thing would be to talk to few hard money lenders in your city and find out what are the rules for paying finder’s fees.

Good luck,

George

 I do agree with George. I am currently seeing brokers charging 1-4 points. In some states the have to be Lic. Such as NY, however in some states they do not.