All Forum Posts by: Steve Hiltabiddle

@John Jacobs I require my borrowers to have policies that cover replacement cost.  Actual cost takes into account depreciation so complete destruction of a property could leave you under water in terms of the amount paid for the loss. Replacement cost would be what it costs to replace the structure.  

good luck

Steve

@Chris Seveney While I'm not at that level to be able to provide personal experience I will follow to see what others respond with.

One question I would have is, 'What is your current loan volume today?'   I'd also want to know the average loan amount to determine how many more loans are needed to go from today to $5m/month.  Finally, access to funds. Is that available to scale up and if there are investors,  resources to manage that side if the business.

I imagine a $60M/year Lending business will need systems in place and more than 1 extra person. Acquisition,  processing, etc. perhaps.  Obviously one would still need legal and accounting support.  And your #3 touches on Marketing.  I would think a significant focus on marketing to fill the funnel would be needed to keep the volume coming.

Again, I can't share from experience but $60M/year isn't a one man show using Excel.  

Looking forward to other responses.

Thanks,

Steve 

@Benjamin Finney. Check with Geraci Law. They specialize in private lending. I personally have used their Lightning Docs platform for a number of loans

 https://geracilawfirm.com/

good luck,

Steve

 Yeah, I do a happy dance when a borrower becomes a repeat borrower.

@Mike Grudzien. I agree with your point.  I feel like there had been an increase in these types of broad open ended type posts.  I'm not sure if folks are phishing for something or what but I appreciate you taking time to challenge the initial poster's post.

Steve

@Devin Peterson   I was curious what responses might be to this question as I've had folks ask about lending on a Foreclosure at a Sheriff sale (I'm in Pennsylvania).  My issue with this, again based on PA rules and my limited understanding, is you are basically providing an unsecured loan for a period of time as in PA deeds typically aren't issued for 30 days.  Additionally it's extremely difficult to fully understand the condition of the property, can often be occupied, potential title issues or defects etc.  While I'd be happy to cross-collateralize, often the borrower is looking for funding against the foreclosed property.  

Please share how you overcome the risks I'm familiar with when lending funds for the purchase of a foreclosure.

Thanks,

 Chris,  That's a very nice offer and I'll keep that in mind in the future.  Right now, I think I have some folks who can help me through these 2 I'm dealing with now.  However, if I feel they are coming up short, I'll reach out.    Again, the offer is greatly appreciated.    Have a great day.

@Jeff S.  Another sound reminder to leverage a team of experts.  Thank you.

I see a lot of posts from people asking how to start lending.  If one can learn anything from this thread it should be to use an Attorney knowledgeable in the laws of lending for the state you are lending in.  Make sure your loan documents are solid and hopefully you have a borrower where your loan documents stay filed away and they don't have to be referenced again.  

However, in my case, you'll be thankful they are well drafted so that Attorney can then protect your capital through default and perhaps foreclosure.  

These documents are the lifeline to your capital so as Jeff and @Chris Seveney have noted, don't skimp on the documents or the use of an Attorney to make use of the terms within those documents.

I once heard Gary Keller of Keller Williams note that legal documents shouldn't be called 'agreements' but 'disagreements' because they only become valuable when there is a disagreement between 2 parties. 

Thanks again for the great reminders.   I've contacted my attorney again for another request to file a Notice of Default.   

@Chris Seveney   Point well taken.  I think my father might have called my thinking, "A penny wise, a pound foolish."   

Thanks,

Steve

@Ryan Konen  Thanks for your reply.  I think your points cover my limited knowledge on this.   I've had the opportunity to see what the Attorney's version of the NoD looks like so if there was a situation where the borrower just needed their feet held to the fire and I didn't anticipate a need to go down the Foreclosure path, I feel comfortable sending an NoD letter myself, certified mail with noted stipulations to cure and outcome if not cured.  I know as the Lender, I always have the option to modify things but the NoD helps set the stage if the borrower doesn't act or respond in a way I feel is beneficial to getting the project across the finish line and me my capital back.     

I'll see if I can track down a suitable NoD template that I can work with for those very specific instances.

Thanks again,

Steve