All Forum Posts by: Jaki Ollango

I know the market is tough, but I'm sure you can find better than over 18%. Is there a reason you're OK with such a high rate? Have you tried HMLs or other PMLS?

If it's your only option since it's family, can you convert them to equity instead? That may work.

I will see if we can convert them to equity. We were okay with the rate because it is a one time charge (payable at maturity), 6 months without any payments and a longer maturity date. I do not know any PMLS but I am open to any referrals you may have. Thanks.

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Dallas, Texas

Quote from @Chris Seveney:

@Jaki Ollango

Is it owner occupied ?

No, investment property

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Dallas, Texas

Quote from @Alex Breshears:

This is a great question and likely something you are running into with the attorney is that the loan terms are considered illegal in that state. Each state has a set of laws called usury laws that outlines the legal maximums for interest rates and fees. Most states break down the limits according to the type of loan. For example, if you are an LLC lending to another LLC for a business purpose loan, that is likely going to have much higher limits (or none at all!) versus someone obtaining a loan for their primary residence. If the attorney you reached out to is familiar with lending laws in your state, and they are saying the loan is above those usury limits, you are treading into water that could lead to the loan being forgiven without repayment or the lender repaying all the fees to the borrower because it is an illegal loan. This is not a great scenario for the borrower or the lender, especially if the lender/borrower relationship is friends or family. Everyone is happy and thinks positively at the beginning of a loan, but when things go wrong, people get real ugly real quick when money is involved. Either consult another attorney to double check the loan terms are legal, or proceed with caution knowing this loan could be deemed illegal if ever challenged in court.

Thank you Alex. I thought we were just going to get a simple note in our individual names and put up collateral. But it turned out to be complicated so I don't even know what to do. If that rate is illegal then I guess I have to go back and notify the lender. Most likely she will not want to lend.

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Dallas, Texas

Quote from @Scott Wolf:

@Jaki Ollango what's the rate? Is it being held in an LLC? If the attorney says the rate is predatory, I would believe they would be right. Is it a RE Attorney you're dealing with?

Yes, we are dealing with a RE attorney. Loan will be held in individual names

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Dallas, Texas

Quote from @Account Closed:

As some comments have mentioned above, the lender should be providing docs. "predatory" sounds harsh. I would review the terms and see if I agree

She is family. Willing to give us the loan on condition that we get all the documents in place.

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Dallas, Texas

Quote from @Malcomb Stapel:

Was she able to provide you with actual data or law that says the rate is predatory? What is the rate?

I am in TX and anything above 18% is not legal (that's what she said)

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Dallas, Texas

Quote from @H. Jack Miller:

Very unusual, most lenders will have the documents drafted and send to you

The private lender is family so they told us the conditions they want and asked us to get them drafted/attorney/title to help

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Dallas, Texas

Quote from @Jay Hurst:

Quote from @Jaki Ollango:

Hi. I have a private lender willing to loan us some money. I approached an attorney to draft some documents for us and provided the collateral details. However, she said she cannot because the interest rate being charged by the private lender is predatory. Yes, it is high, but it is a one time overall rate and we are okay with it. My goal was to draft an agreement and possibly a mortgage for the collateral and see if title company could record it for us. How do you get it done and also make the private lender comfortable that their interest is secured or what are other ways to go about this? Both the collateral and I are in DFW. Thanks.

@Jaki Ollango Is the transaction not closing at a title company?

Hi Jay. It will close with Title Company but they had asked if I can work with an attorney to draft the docs and then they can do the recording/filing

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Dallas, Texas

Quote from @Jay Hurst:

Quote from @Jaki Ollango:

@Jaki Ollango Is the transaction not closing at a title company?

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Dallas, Texas

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Dallas, Texas

All Forum Posts by: Jaki Ollango

Jaki Ollango has started 6 posts and replied 29 times.

Post: Private Lending Question

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