Quote from @Ken M.:
Quote from @Kala Samuel:
Quote from @Patrick Roberts:
Quote from @Kala Samuel:
Quote from @Ken M.:
Quote from @Kala Samuel:
Quote from @Ken M.:
Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
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Your comment: "I have been presented with the opportunity"
By a friend? By a relative? By a Sasquatch? By a "creative finance student"? By random email?
She posted in a creative finance real estate group for my state. We met via FaceTime. She did walk me through the property. She showed me the work completed and the work remaining. Her LLC is in good standing.
Next I need to verify the clear title
Have coffee with her, walk the property, have a property inspector with you, use an attorney for all paperwork. Personally I would go a step further and ask for documentation as to how much it will sell for when completed.
She's upstate; I doubt I can make it for coffee. Would requesting her comps suffice?
Get her comps, but you should be coming up with your own. Her comps may add to yours or give you a starting point, but I wouldnt rely solely on them.
Agreed.
Since you don't want to go to the property, and I've seen a lot of fraud over the years, and things can be faked pretty easily these days. I'd require the address, and thoroughly look at it on redfin, zillow and google maps, I'd have an uber driver drive by the address and take pictures of the property, and the work that has been done, and any contractor vehicles at the property and of the person who meets me there.
I'd require a text picture of the driver's license and auto plates of the person who meets the uber driver who says they own the house.
I'd look in county records and see who owns the property and what liens are against the property. I'd contacts the city building department and check what permits & citations have been pulled, and what clean up orders have been issued. I'd want a copy of an electric bill for the property for identification. That is where I would start, but that's just me.
Those are all good verification points.
Her deed is free and clear. It's in her LLC. It's in good standing. Her business logo is literally her face lol.
When i say she walked me through the property, it was a virtual walk through. She didn't send me like some old photos. Her appliances and flooring are purchased and in boxes. I could see the foundation repair (brick house) also explains why she needs the exterior repainted. The bricks don't match.
I've got first lien position, promissory note, personal guarantee. I asked about JV, but since she's already in the middle it would cost her more to go to an attorney to add me. She's offered to jv with me on another project she's started. The seller hasn't accepted her offer yet.
Would a title company be willing to look over the documentation for me? The usury law is scaring me a bit.
