All Forum Posts by: Kevin Amolsch

If you are brokering private money you will more than likely need two licenses. Seems everyone is mostly concerned with the mortgage broker license but you will also need a securities license unless you do a reg D offering or a limited number of transactions. You do not need a securities license if you are brokering your own money or institutional money. This is the information my attorney gave me for my business in CO and I know DORA is looking to crack down on unlicensed private money brokers here.

Be VERY careful with this. The SEC and state regulators do look for violations. Bryan's definition is correct about the efforts of someone else generating a return. After speaking with a few attorneys and the state department of securities my understanding is a promissory note IS a security. In some cases you will need a licence to ask an individual to loan you money and in some cases you would not need one. I wish this subject was easier with more clear answers but its not. That is why everyone suggests speaking to an attorney. Good luck.

I agree with both responses and have a few things to add. When you say offering documents that normally means private offering documents which would be when you want to raise lots of money and pool it together. i would say more than $500k and you would need an attorney to handle those. What Will is saying about a note and mortgage is by far the best way to go when you are getting started. I would not worry too much about a business plan. Lenders just want to know they are going to get paid back and that you have a plan to do that. I nice return is helpful :-)

The best way that I have found is to sit down one on one and just talk about it. Dont stress out about a big sales pitch but do anticipate questions and how you will handle them. If it were your money what would you want to know? Those are the questions you will get asked. Once you get one lender it is all down hill. People with money have friends with money.

Stay confident and good luck!

Can anyone recommend or is anyone part of this group a good appraiser and real estate attorney in AZ?

Use your banks bill pay service. It is most likely free and they normally withdraw the amount from your account and put it into another account to draw the check from. This way it will show you paid on time every time. It is also a good way to keep your personal account number to yourself if you wanted to do that.

Have you thought about doing bigger deals? 5+ units are commercial and are much easier to finance if you are a good borrower with multiple properties. I am not a commercial lender but I am sure there are several that would be willing to chime in.

If you dont get an answer you like from your CPA get a new one. Almost everything with-in the tax code is grey so you can really push it if you keep great records. I have reported it both ways. When I was just starting and had just a few rentals we separated business expenses equally across the rentals and it worked fine. As I started making more money with other real estate activities like referral fees, wholesaling and flips I started reporting on a Sch C. I am not a CPA so please check with your accountant but I would not worry so much about how it gets reported as long as it is reported and is legal.

Sounds like a lot of work. Can you make enough to make it worth it?

There are three ways to legally flip an nonassignable contract.

1) double close which has been mentioned. I see both "wet" and "dry" double closes. A wet double close is when the originally buyer uses flash cash and actually buys the home with their own source of money. Dry is when the end user's money funds both sides. It is almost always done with two different title companies.

2) Make your offers in an entity and then sell the entity. For example: get a house under contract with an LLC that owns nothing. Then sell your LLC to your buyer and let them close on the house.

3) This one is a little more risky because the banks dont always allow it. Add your buyer to your contract and say it is needed for financing reasons (which is true). Then close in both of your names and quit claim yourself off once you are closed. The buyer's lender needs to understand what is going on and sometimes there could be an issue with a title company insuring the deed of trust if it does not match the deed.

Can the owner refinance to pull some cash out to pay commissions allowing you to do a master lease. The better option would be a land contract and when you refinance you should be able to use actual value. It will all depend on the mortgage broker or bank you work with. Another idea, although you may not want to do it, is bring in a cash partner. Hard money will not work unless the owner is willing to carry the note in second position. Good luck