All Forum Posts by: Steven Lange

Bruce M., Isn't it 22 points because the loan is 6 mos long and not a year? Isn't it points plus interest that equal your overall interest paid annually?

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Jay Hinrichs, Mindy Jensen, Chris Mason, Thank you for your responses. I responded day before yesterday, but am just getting the hang of including your name/link in the responses. Please check out the discussion. Thank you.

Steven

Chris Mason, Jay Hinrichs, Mindy Jensen: Thank you for your advice and guidance. 

To offer some further explanation: The debt was secured by one home and used to purchase another higher priced home, thus taking any equity or profit out of the former home.  The PML is a lawyer and licensed broker, but has not practiced or renewed his licenses in years. He is retired. He has loaned us money on 3 properties this year and loans out to 2 other individuals simultaneously. On top of that, the lender lends for the construction costs on all his loans, but the lendee often is charged 1-2 points for each withdrawal from the construction fund. He rarely lets the lendee just have the construction money (also at 7%) without charging 1-2 points per 10k withdrawn at a time. If the construction loan is 60k, which on average it is, the lendee ends up paying 6-12 points on top of the 7%.   HE will not provide any accounting or statements of our payments, which he shouldn't HAVE to, I'm told, and I agree it is the lendee's responsibility to know what he's paid. But there are discrepancies which need to be cleared up. And lastly, access to direct communication with the lender was initially forbidden by the individual (the RE agent) who introduced lendees to the lender. With multiple loans out from one individual, coupled with multiple loans out for rehab from the same individual, it can be confusing, especially when they are relatively short term loans (6 months to 2 years, mostly 6-9 months) for higher end homes which have longer DOM. 

Three construction loans are due now and three homes sit on the market still: One completely, beautifully done and on the market a year now in Agoura Hills, CA, One not rehabbed because he promised to provided rehab funds for it, but backed out (we are subsequently unable to find a lender to finance the rehab because this purchase's deed was encumbered by a first AND second for the purchase). This particular asset was put back on the market and has a buyer offering 50k more than what we purchased it for. Additionally, this assets profits would have pulled us ahead and taken care of cumbersome debts and/or losses from the other two properties (PP 840k, ARV 1.25M, rehab 80k). And the third property is a condo halted at midstream in its rehab because funds were limited to 11k for a 25k rehab.

He has put a NOD on all three because lendee was late in April, making their properties even more undesirable to potential buyers, hindering their sales and is now considering on lending more for the condo's rehab to get it on the market.

When does a private lender cross the line? When does your need for the money to get the deal through get outweighed by the inconveniences a private money lender sets forth in your terms. My partner and I are at odds over some lending practices. One of us is willing to look the other way if the lender isn't licensed in the state of California as a loan broker. The other thinks it's not a big deal. One of us thinks the lender must abide by usury laws and the other is sure that a private lender--especially unlicensed CA lenders--can do what they will as long as 2 seemingly savvy investors agree to it. The other thinks it's a big deal. Here is an example of a loan we have: The PML cashed out an annuity worth 127k. There was a 14k penalty charge on his cash out. We agreed to pay that fee as an undetermined loan charge, yet to be specified or written anywhere in ink. So we got roughly 114k. On top of the 14 k charge for the use of the money, we are paying 7% for 6 mos. use of the money. Is there foul play here? Or is this just caveat emptor?

When does a private lender cross the line? When does your need for the money to get the deal through get outweighed by the inconveniences a private money lender sets forth in your terms. My partner and I are at odds over some lending practices. One of us is willing to look the other way if the lender isn't licensed in the state of California as a loan broker. The other thinks it's not a big deal. One of us thinks the lender must abide by usury laws and the other is sure that a private lender--especially unlicensed CA lenders--can do what they will as long as 2 seemingly savvy investors agree to it.  The other thinks it's a big deal. Here is an example of a loan we have: The PML cashed out an annuity worth 127k. There was a 14k penalty charge on his cash out. We agreed to pay that fee as an undetermined loan charge, yet to be specified or written anywhere in ink. So we got roughly 114k.  On top of the 14 k charge for the use of the money, we are paying 7% for 6 mos. use of the money. Is there foul play here? Or is this just caveat emptor?  

Can anyone in Detroit do a driveby to see the condition of the house?

They've approached us and requested to transfer ownership by deed in lieu of foreclosure. We must pay some delinquent property taxes, but after that it appears we own it. Still unclear as to what kind of hood its in. Its about 10 blocks south of the 8 mile (road). I'm not sure if the much aligned 8 mile district begins north or south of 8 mile road. Anyone out there willing to do a driveby for me to see if it' occupied or what kind of condition it's in??

Steven

Sure, I'll send you two the address that requested it. An update: contacted by the party that sold us the note and told they haven't been paying taxes and wanted to warn us we could lose the asset. Now what to do.... Pay taxes of course, but then does that give me any rights of ownership? Also contacted a lawyer who wanted a couple thousand to foreclose. k've heard you can foreclose for as little as $600, but I bet that's if you're local--which we are not--and you do all the filing....

the note was bought for 35k