All Forum Posts by: Frank Y.

@Randy Rodenhouseundefined, Hi, Randy. Thank you for your response. The IRS 1098 rules has exceptions. 
[You need not file Form 1098 for interest received from a
corporation, partnership, trust, estate, association, or
company (other than a sole proprietor) even if an
individual is a coborrower and all the trustees ..... ] 

@Eric Veronica Thank you!

@Jeff S. Hi, Jeff, thank you so much for your timely response. Very appreciate it. Another question, tax season will start soon. Do private lenders issue 1098 to borrowers? We just reported interest received as normal interest income.  Thanks. 

Hello all: We lent money to a LLC (two members) last month, and now the LLC wants to change its structure to C-Corp. What impact do we have to our current Mortgage and Note, or what do we (private lender) need to do? All inputs are very much appreciated.

Thank you. 

Frank

I will be very honest with you that it will be very difficult to find a private/hard money lender for down payment, because that will put the private lender as 2nd position (because the commercial mortgage  will take 1st position). And many commercial banks would not accept your down payment is from a loan. Thanks. 

You will need a Mortgage and Promissory Note. Any Real estate attorney can draft that. When you refinance and pay off the private lender, the private lender will issue a Mortgage Satisfaction Piece or Mortgage Discharge and get that recorded. Then a new Mortgage and Promissory to the new lender/bank you refinance with.  Pretty straight forward. Good luck. 

Hello, all. I have a borrower who is going to borrow for fix & flip property. He is the sole owner of LLC, but his credit is not the best. He offered to have his wife, who has good credit, to co-sign. Our loan document include Mortgage, Promissory Note, and Guarantee Agreement. Where do I need the co-signer to sign? On all of these loan doc, or just sign on a separate one page Co-sign agreement where the co-signer will promise take all the liabilities of the loan document, if the borrower default? Please advise. Many thanks.

Frank

@Saravanan Saravanan

Thank you very much for your response.

Hi, private lenders, do you file and provide Form 1098 to a LLC who paid interest to you? I have a borrower (LLC) asked for 1098. But IRS Instruction says "You need not file Form 1098 for interest received from a corporation, partnership, trust, estate, association, or company (other than a sole proprietor) even if an individual is a coborrower and all the trustees, beneficiaries, partners, members, or shareholders of the payer of record are individuals." Please share your experiences. Many thanks.