Hard Money Licensing Requirements

[Kevin Blayne]

Thank you all in advance for your replies.

For the State of California, I understand the following:

In order to originate a Note for a first trust deed and receive rates greater than the stated usury levels one must go through either a real estate broker or mortgage broker.

However, I have several questions in regards to running a small business around this and actually getting paid.

The situation:

1. I do not want to start a fund or a mortgage/lending pool
2. I am not currently a mortgage broker or real estate agent/broker
3. I want to bring family and friends into these opportunities and get compensated for doing it, will not be bringing in funds, trusts, etc.

A specific example:

I have a friend who wants to invest $100K in a first trust deed and I have a fix-and-flip relationship with a contractor who wants access to that hard money. Through a broker I am able to arrange a 13% interest note with 3 points being paid. Since I am not a real estate broker I will pay the broker for originating the note.

Now here are my questions:

I want to get paid for doing this and all parties have agreed on my compensation of 2% and 2 points. HOW DO I GET PAID? Do I need to be a real estate agent under the broker or can I just get paid normally through the servicing company when they receive the monthly interest payment from the borrower.

So in a nutshell in the state of California how does one get paid, who is not a broker, for such a transactions?

Secondly, do I need to be registered and licensed for anything particular in the state of California?