All Forum Posts by: Frank Y.

Yes when you fix and hold. However if you fix and flip which normally should have the house sold and pay off the private money, it may cost more apply a loan from a bank with all the fees.

Couple tips: up front fee; too low interest rate, do not need your credit report or collateral.

Here are my advice: always be 1st lien, make sure borrower has skin in the game, have all legal loan documents to protect your money, private money rate is between 9 to 15%, plus 2 to 5 points depends on borrowers experience. Good luck!

Just add one more point: the borrower pays all loan documents preparation fee and wire transfer fee. All these will show on the HUD sheet. Lender has to approve HUD sheet before closing.

I am an private money lender in East PA (Allentown, Reading, Harrisburg, Lancaster, West Chester, Schuylkill Valley, Lebanon .....) and the way we do is much simpler. Our attorney draft mortgage, notes, guarantee agreement based on the terms lender and borrower agreed upon, and sent to closing company a day prior to the settlement. Once we get the title insurance, HUD sheet, and properties insurance confirmed, we will wire the money. We don’t need go to the settlement. The settlement company will distribute the money, and FedEx us the signed loan documents, check for the points to us within 48 house after the closing. The closing company will keep the original mortgage to record to the court house. Couple days later, we will receive the recorded mortgage in the mail from the court house.

I would prefer do each one individually, this way gives you more flexibility when you want to sell just one or two.

Hi, @Michael Ede 1) A lot of lenders do have interest reserve, but not to 6 months, normally 1 or 2 months of interest. The only reason is that make sure the interest get paid. 2) Rehab draw is practical because lenders want to make sure the money has been spent on the property.  3) If the lender want to buy the property from you, that is a red flag and it is conflict of interest.  

Have an attorney draft Mortgage, Promissory Note, and guarantee agreement (If your LLC is the borrower and you will be the guarantor). The mortgage will be recorded as the private lender as the 1st lien holder. Good luck.

Originally posted by @Copelon Kirklin:

@Richard Licon

My company is a private money brokerage. I arrange financing for residential and commercial deals nationwide, with the exception of a few states. I'm located in Kenner, LA and in this state, we're not required to have a broker's license to broker loans as long as it's non-owner occupied investment properties. Just my 2 cents to add.

 Here in PA you don't need a broker license as long as non-owner occupied. I think there are only 12 states require license for private lending, including CA, CO. 

There is a so called Certification program online. What they do is charging you thousand of dollar and providing some lectures and materials.  This certification is not recognized anywhere.  If you really want to be into mortgage business, get a license.