All Forum Posts by: Ann Bellamy

Connect with @Marina Draper, she specializes in real estate investors.  She is also our speaker tomorrow at Black Diamond, https://www.biggerpockets.com/..., although the event is in Worcester and that's a hike for you.  But if you can make it, you can meet her and ask lots of questions.  She's normally at our Burlington meeting too, the next one is Feb 18.

Originally posted by @Lisa Eckman:

@Jeff Cichocki Thank you!! I think you may have answered my question about the difference between a HML and Private Money lender. Is the difference then whether you're lending on owner occupied vs non owner occupied?? Would it be safe to say that you could have a loan for each that are identical, with the only difference being one is OO (PML) and the other is NOO (HML)?

Lisa, No, do not use this as the difference.  I actually wrote a BP blog post on this topic. 

Hard money (and private money) loans are almost always non-residential, business purpose loans.  

Do I need a License to be a Hard Money lender in Massachusetts? If yes,

what’s the name of the license?

NationwideLicensingSystem

What type of attorney would I contact?

You need an attorney with many private lending clients.  Not just a real estate attorney.   Go to the registry, look up some private mortgages, and some times on the discharge there is a "Return to" field, which would be the attorney.  Although with electronic filing, there will be very few with this field.  Alternatively, call some of the larger hard money companies and ask them for the name of their attorney.  They might give it to you.

what department of Massachusetts would I call?

See link for NMLS above

can anyone send me a link that pin points exactly what I need to do to become a lender?

You will find that while the link gives you specifics, it's the questions you didn't ask that are more important.  Find yourself a good attorney.  The reason that a real estate attorney is not enough, is the attorneys who handle closings for institutional lenders only know how to close the deal, and are typically provided loan docs by the institution, because they have attorneys on staff to ensure compliance.  Real estate attorneys usually know nothing about lending compliance. 

I'm assuming that by 3-4 deals, you have over 1 million available for lending.  In general, in MA, if you don't have at least a million to lend (aside from your other assets toward retirement, housing, etc) then you don't have enough to lend.  All that networking and marketing, and then you are suddenly out of money.  Then you are telling all those people "oops, sorry, I can't do that deal right now."  Part of the reason to use a private lender is speed to close.  

You may want to consider finding 1 flipper or buy and hold investor you trust, and partnering solely with that person.  You two together can grow your portfolio significantly without spending time marketing for new borrowers.  Just an alternative to consider.  

I would focus more on an accountant who specializing in real estate investing, more than I would worry about where they were located.  I have worked remotely with my accountant for years.  States do have idiosyncrasies, but rules relating to real estate impact larger tax bills federally than just the state rules.  Accountants know how to read tax law in each state.  If you know of a specific oddity, by all means, alert them to save them time.  But proficiency in real estate investing tax law in general is far more important.  

@Robert Leonard

John sold his tax return practice to another accountant, and I have stayed with her for my returns.  I would still use John for strategy and tax legal issues.  She is in Ohio and I am very happy with her.  She is detailed and accurate. 

If you want someone local, I suggest reaching out to @Marina Draper.  She is in Worcester, not NH, but is focused on real estate investors.  I know others in my network using her and they are happy also.  She will be speaking at Black Diamond in Worcester on 1/21 if you want to get a chance to listen and meet her.  

You need to differentiate between conventional residential mortgages and conventional commercial mortgages.

1.  If you are buying a 1-4 unit property in your own name using conventional financing, you'll use a conventional residential mortgage, assuming no or not significant repairs needed.
2.  If you are buying a 5+ unit property, whether in your own name or in an entity such as an LLC, you'll use a conventional commercial mortgage, again assuming minimal repairs needed.
3.  If you are buying either of the above (perhaps because of significant repairs needed) using hard money, you'll normally need to take title in an entity.  If you are refinancing to hold long term, you'll then need conventional commercial financing for the take-out.
4.  There are other scenarios that don't fit one of these 3, but this covers the majority of transactions.  

When you start researching, you'll find the requirements, processes and costs are quite different.  You will also never find conventional commercial mortgages at banks unless you ask for the right department:  not the mortgage department, but the commercial lending department.

There is more to the topic, but now that you are aware of the difference, your questions should shift accordingly.
Good luck.

You will be violating the terms of the note in the Due on Sale clause.  They then have the right to call the note.  Whether they do or not is another issue, partly dependent on whether they know about it.  But read on.....

The other issue is that your homeowners insurance will now not cover the property, since you moved it into an LLC. You can't just change the name of the insured on your existing policy, the insurance company will refuse and tell you that you need a Business Owners Policy (which is much more expensive). When you switch over to a new policy, the insurance company will notify Wells Fargo that your original policy is cancelled. If you issue a new certificate to Wells Fargo with the name of the LLC as named insured, that will make it pretty obvious.

So are you "allowed" to transfer?  Well, you decide as long as you know t the likely outcome.  You'll probably need to refinance with a commercial loan.  Which, just a a commercial insurance policy, is much more expensive than a residential loan. 

But it all depends on what action Wells Fargo takes when you go this route.

There are dozens.  You'll find some on the Events page here on BP, and also check Meetup.  You can search by Groups>Mileage radius.
I host a large group alternating meetings between Burlington and Worcester called Black Diamond.  Our January meeting is posted here:  https://www.biggerpockets.com/...     February will be in Burlington.  
Attend as many as you can.  Where a meeting takes place is only partly indicative of the location of the attendees.  Many people travel to different groups based on the quality of the attendees and the topic presented that night.

@Mary J. to connect with someone, hover over their name or profile photo, and click the Connect button.  BP calls them colleague requests.  You have a better chance of getting someone to connect if you send a message with it.  Although connections on BP don't control what you see the way they do on FB.  But you can find the person more easily later.

I'm not aware of any networking groups in Cheshire county, although there may be one.  Networking locally is a very good way to meet wholesalers and other investors, so you might investigate to see if you can find a group, or start one.  Try the Events page here on BP, and try the Meetup website.

Good luck!

Also, Massachusetts holds the auctions at each property, so get on the mailing lists of each of the auction houses.