All Forum Posts by: Rob Henry

Sorry this was poorly worded, as I re-read it - here's the background:

Seller is out of work, out of money, and needs some cash for basic living needs until the house sells.

The house is free & clear, the seller wants to tap into that equity but knows he cannot get a regular loan.

I would lend the money and secure the loan with a mortgage. Everything is spelled out up-front and the seller knows what he will be paying. There's no fraud involved, he is on-board with everything.

There is still plenty of equity available in the home so once it sells, the seller will get the lion's share of the proceeds.

My concern was the interest rate laws and how this would be viewed. I'm charging a flat fee rather than an interest rate. I realize it may be calculated as interest so that's where I thought of the performance mortgage. Or maybe some type of partnership/split equity agreement would be better?

Do you necessarily need a promissory note if you file a mortgage? Say for example, I lend someone $5,000 on a free & clear house (listed for sale with a Realtor) and file a mortgage for $10,000 once the house sells.

Would I need to fill out a promissory note as long as the mortgage is recorded with the county? Could I make it a performance mortgage with the "performance" being the sale of the house?

Also would this type of arrangement violate any usury laws? If there's no note I don't know if there would be any interest rate concerns.

I second the Warrior Forum thought, stay away from the WSO forum, stick to the Warriors for Hire section.

And as a side note, the company you mention is located in India and yet they say they are in the USA so that doesn't sit well with me. Plus their packages are way too expensive IMHO.

Which way did you decide to go Michael? I know the challenges are a bit hit-or-miss but they do work if you're persistent.