Jay: We do not have brokers licenses.... our brokers do. As does the real estate attorney we work with, title, escrow, servicing co., etc. To avoid being in violation of certain lending laws, we tell the broker what our criteria is, step back, and they do the negotiating with the borrower, manage the docs, etc. This way we are compliant with CA usury laws and stay on the DRE/BRE's good side. We are considering obtaining a broker license in the future, but for now we just let the brokers on our team do all the work.
Daren: See response to Jay above. In our case, the private money lender is the broker. We are the bank (money source), but we make the decisions, meaning we tell the broker our underwriting criteria and how we'd like the deal structured, and the broker goes to work for us, "for points". We get the interest payments from the borrower (through a licensed servicing company). The servicing company/escrow pays our OPM sources (other people's money) first, and we keep the rest (the spread). I LOVE this business because we play such a passive role.
