Sources Of Capital For Hard Money Lenders
Using their existing loan portfolio as collateral, where could a hard money lender go to raise more funds to lend out?
Are there any institutional financing sources available that work with these types of companies?
I go thru my local community bank. They are more than happy to use that type of collateral.
too many cooks for me.
Does not sound like note buying. SOunds more like investing in a real estate investment group
These days, I would question the value of the underlying collateral. In other words, how much can you LOSE if the owner defaults? What would the property bring at a fire sale?
I have personally viewed hundreds, if not thousands, of properties in foreclosure that do not bring even 50% of the mortgage loan balance at courthouse sale.
As long as the scam artists can shove bad paper downstream, they will continue to buy junk property, do shoddy rehabs, over value appraisals using unrealistic comps, lend to questionable investors, etc.
An attorney offered me 18% on 1st mortgages, he is keeping the up-front 5 points. I reminded the attorney that I spend a lot of time buying foreclosures.... and I have seen many of his "investor loans" with $90K mortgage balances sell for less than 1/2 that at the courthouse.
The situation you describe is ripe for the above manipulations. I am suggesting you evaluate the down-side before you spend your money.
[addsig]
are you asking for the paperwork to have your family lend someone $$ secured by real estate?
a Note
A trust deed (many title companies have these on their web site)
A lawyer or title company can help. I have done it myself.
Then record them, and make sure no usurious rates are changed or other illegalities.
It would be a loan for me and my wife to buy investment property (from my in-laws). It would cover 15 or 20% depending on what works out best. I wanted to amortize for 30 years but have an escape clause where the in-laws could ask for full payment after 3 years. Is the note and deed enough for this? Where do I write the escape clause?
This is the best way I could come up with to finance 95 or 100% at a low rate. Does anybody have better suggestions?