All Forum Posts by: Account Closed

Chirs: I'm saying that i know the difference is irrelevant to my question. I'm not sure what you are saying in the first part of your paragraph, I'm certainly not talking about deception, but your comment "If you are asking because it is better to market as one or the other, then, I would say that Hard Money lender has connotations that may make some investors nervous where private lender does not." answers my question perfectly.

I know what the difference is but that’s irrelevant. What matters is what borrowers think. Assume two individuals had their own money to lend, on exactly the same terms, one called himself (herself?) a hard money lender and the other called himself a private lender, which would borrowers be more likely to want to work with. I’m thinking borrowers would be more comfortable working with the private lender.

Is there a difference between the two?

If the loan terms were the same, would you be more likely to work with a private lender or a hard money lender?

Hard money lenders use private money, so to my mind they are the same. I'm just wondering how investors perceive the two.

All I'm saying is that the cost and work of a blanket mortgage is the same as separate mortgages, so why do a blanket mortgage.

This is not exact but the loan amount would be roughly $200k, $100k against one rental (valued at $200k) plus $100k against the other rental (also valued at $100k) … 50% LTV is very comfortable. All properties are owned by borrowers LLC so all loans would be to the LLC with personal guarantees.

I’ve thought about Future Advance Blanket Mortgages but I’m having a hard time seeing the advantage over separate mortgages and notes. It seems to me that with a blanket mortgage/dot every property needs a separate title policy so there is no, or very little, cost advantage. Every time a property is released or added there is some kind of new papers drawn and recorded so there is no, or very little, administrative advantage. I did this one time in the past (one note and two dots) and there was very much heightened attention to detail with the closing agent, in other words it was a pain. And, if separate, notes could be sold easier. I’m not criticizing these techniques, I find the fascinating actually. On the up side, fees are less for borrower (bad for broker) since only one origination.

Partnering with borrower via an LLC is another subject with separate issues. I haven't done one but I would just throw out there that that can be accomplished with a Shared Appreciation Mortgage avoiding much of the liability associated with ownership.

That was a very broad question, let me be more specific.

I have a guy that wants to borrow money to do fix and flip, but he doesn’t have any cash, but he does have two free and clear rentals. He could make fix and flip offers contingent on hard money financing and use the purchase as collateral, but he wants to make all cash offers to be more competitive.

I could write two separate notes and two DOT's and get two title polices, one for each property, which I'm inclined to do because I understand it and I could sell the notes separately.

How else could I structure this?

Does anybody know of a good read to better understand cross-collateralization and blanket mortgages?

I get the basic idea of offering more than one property as collateral for a loan, and have actually done a loan with one note and two deeds of trust as collateral, but the more I think about it the more complicated it gets.

Some example questions: Can you have one note and one deed of trust with two legal descriptions, or do you need two DOT's each with its own legal. Do you need two title insurance policies or can it be done on one. Does each dot secure the entire amount of the note or only part, when does each dot get released. You could, theoretically, have one note secured by one dot, one note secured by multiple dots, multiple notes secured by one dot, multiple notes secured by multiple dots. You could have one note secured by multiple dots, each dot given by a different entity. The list goes on.

womensinvestclub dot com meets once a month in the San Fernando valley. I've gone a couple times now and think it's a great place to learn and network.

i know you guys cover title errors, that's a super business model, really cool.

the trustee sale investors i talk to are seeing rescission of sale more and more. an eviction attorney i heard speak the other day said he had one where the trustee sale was rescinded 6 months after sale, or at least an attempt was in the works. another problem is the obama law, where you can't kick out renters that have a lease, renters have figured this out and are manufacturing long term leases to foil reo lender/trustee sale buyers efforts to take possession after sale. have you guys run into this kind of thing and, if so, how are you handling it? this is a title problem of a sort.

if trustee sale buying was risky enough already, it seems to worse.

Jake: Hi, yes, i remember the presentation. you guys seem to have a solid operation, very respectable. do you know of a title co offering insurance for a trustee’s deed in CA? not sure why you say it would be ineffective or why a need for blanket policy. i would envision something more akin to the traditional policy where title, perhaps in real time, generates a list of outstanding liens to confirm you are not bidding on a second when you thought you were bidding on a first, for example, then issues a policy for a fee if/when you purchase. A traditional closing only charges for the policy if title transfers, not for the preliminary title check. I’m not saying such a thing exists, it just seems to have raised its head in this thread.
It’s my understanding title co data has about a 1% error rate. Even if you have access to title data and are the best title searchers in the world you can’t be perfect, you can’t be better than the data you rely on. if I have title insurance those errors are covered. Trustee sale buyers use real money, not money that will eventually be paid back with government bailouts if mistakes are made. Having said that, title insurance companies are probably like all insurance companies … making a claim and actually collecting are two different things.