Offering private money loans using LOC on commercial property

[Michael Andrews]

I recently purchased a 12 unit building which came with a very high appraisal value at $95k over the purchase price (which I put 20% down on). I found a local lender that is willing to do a LOC at 80% LTV on the property at the appraised value, and I am interested in finding creative ways to use that equity.

I was contemplating using that line of credit to offer private money loans to a local flipper/developer and start out in the note business. I was wondering if anyone has gone this route of using a LOC for private lending and what expertise is needed and legal ramifications there are for using borrowed money to make loans?

[Jay Hinrichs]

there are 12 states you need to be licensed in to lend money.. check that first.. not sure about WI...

but usually if you google HML in your state and if they have a NMLS number then its probably required if not probably not.