All Forum Posts by: Ann Bellamy

There are very few states, if I'm correct, that have series LLC's. I don't think NY is one of them. But definitely check with a good real estate attorney in the state where the property will be. And not just a title company that does conventional real estate closings. You need an attorney knowledgeable about complex real estate structures and deals.

There are several "hard money lenders" in NY who make a business from the deposits, not the loans. Sounds like you found one of them.

To your question - most hard money lenders are not licensed, because most of the reputable ones work with real estate investors who run a business. In order to lend to individuals, under the new SAFE act, they must be licensed. Licensing includes requirements such as working as a loan originator doing residential lending for 5 years, or other requirements particular to a state. Therefore, most "national hard money lenders" lend to companies only. Even local hard money lenders follow that protocal. So you will likely find that they are not licensed.

You can file a complaint with the Attorney general of your state or the Banking Commission, as Chris says. But is is likely that the cost of recouping your loss will exceed the loss. Therefore, you are probably screwed, in a practical sense.

Going forward:
1. Always google a person or company, to find the complaints before you plunk down your money
2. Ask around at the local REIA or your other real estate investing buddies (you now have a bunch of them on Bigger Pockets) for references to local hard money lenders
3. It is not unusual to have SOME up front fees. In my case, we charge a deposit ($1000) for the attorney and title work. If you don't close, someone has to pay for that work, so the fees are applied to that. You get anything back that isn't used.

In 2009 the SAFE act was passed. It is a federal law that regulates many things regarding mortgages. On of the new requirements is how a residential mortgage is defined, and the licensing requirements for lenders. It also required that each state pass it's own version of the SAFE act, which could be stricter than the federal version, but not less so.

Check with a local attorney (a very experienced private lending or real estate attorney, not the garden variety title company) and find out the requirements in your state.

In the two states I do business, which are New Hampshire and Massachusetts, my attorneys tell me that selling a house with owner financing to an end buyer is now regulated, and prohibited by, the SAFE act, unless that seller, (who is now considered a private lender) is licensed by the state to lend. Not a licensed broker, but a licensed lender.

We have had numerous discussions in my area.

Since the advent of the SAFE act, most hard money companies require you to take title in an entity, because now all lenders doing even ONE residential loan, must be LICENSED. (This includes selling to an end buyer with owner financing, by the way) The licensing is expensive, a hassle, and has requirements that private lenders probably won't meet. Therefore private lenders and hard money companies lend to entities only - LLC's and Corp's.

So this is another consideration.

And remember, if you contract with a P&S in your personal name, and then want to take title in a company name, sometimes the seller won't agree - especially if it's a short sale and the shorting lender has to approve the change.

I could go on and on about the complexities, because it's a hot topic these days. But I don't want anyone to think I'm practicing law. :-)

Hi Lisa, and welcome.

I'm an investor and lender in your area, and like to connect with local investors in MA and NH.

I [will be] at a local REIA in Chelmsford on Wednesday - www.newenglandreia.com

Maybe we'll get a chance to meet there. I can introduce you to a lot of investors who might be of help to you.

I haven't run the numbers, but I would first make sure that to arrive at NOI, they included all expenses, not just taxes insurance and maintenance. Water/sewer, management, and other utilities are frequently left out of the calculation, resulting in a higher NOI than the property actually generates.

He'd probably file a complaint with the system on the living conditions. Ha! See how far that would fly.

This is very disturbing. It's particularly disturbing that one landlord inherited the tenant when she bought the building. There is no way to screen for that. It's probably why the seller sold in the first place.

Bonnie, you might find people reluctant to answer your question because it involves giving tax advice.

You want to ask an accountant about tax deductions for mortgage interest and for property taxes.

In general, spending money to save money doesn't work.

That's like saying: "I saved $1000 on these diamond earrings that were on sale, and only had to spend $2000 to do it."

I agree that the forums are hard to find and use. And they are my favorite part of BP. I post a blog, but I enjoy the forums, when I can find them.

I recently posted a topic in "Off Topic", because I couldn't find the topic "Technology" in the drop down.

I suspect most lurkers are new investors, and are afraid to look stupid. Maybe the suggestion about chats and topics is a good one. How about every Sat AM, choose a topic, choose a moderator, and have a live conference call, members only, to discuss the topic. No advertising, just questions answered. 30-60 mins max, depending on participation. The participants could type their questions in a chat format on a gotomeeting type of format, and then the mike for that person could be unmuted so they could elaborate on the question. Then people could chime in with answers or discussion and be unmuted in turn.

Maybe this is to complicated, I'm getting carried away, but you probably get the idea.

Yes, or if you've turned off your phone. In both cases you are SOL, but I still think it's WAY better than nothing.