Private Money Lending in North Carolina

[Don Antoncich]

I'm was wondering what is needed to be done and in what order when using private money to purchase properties in North Carolina. I have a friend who has a good amount of money and is always asking me to borrow it so his wealth can grow and I can buy property. I am thinking of going this way. My concern is what documents are needed? I have an LLC but I know the IRS will be wondering where tens of thousands of dollars came from. Can anyone advise me on the step by step process for borrowing private money that will be used for property in North Carolina and possibly out of state properties?

As far as I know he writes a check, I put it in the LLC account and purchase away. But I fear I'm WAY over simplifying this... or am I?

Thanks!

[Chris D.]

I've funded 2 loans in NC (Raleigh area). Had to search high and low for an attorney who would draft the docs the way that I have been advised them to be drafted here where I live - DC area (I use a commercial lending attorney). After MUCH effort I found an attorney in Charlotte by the name of Hal Berger of Berger & Kindberg Law, PA. As a lender, I wanted an Attorney who represents me and who would be my trustee. In my package, Hal prepared a DOT, a Promissory note, a Guaranty agreement, a limited liability company borrowing resolution, borrowers closing certificate and affidavit, collateral protection insurance notice an an affidavit and designation of commercial purpose. He reviewed the borrowers LLC operating docs and verified that the LLC is in good standing. He also reviewed the title work provided by the borrowers attorney (very important and something I wouldn't know how to do) and has followed up since settlement to check on the whereabouts of the title insurance policy for me. We were on a tight schedule and he was very responsive. He is more expensive than the other attorney but in my opinion well worth it.