I too would like some assistance with with how do become a hard money lender. I am a newbie and had done some reading so I know a little but not enough to feel confident.
Assuming I have the money and want to lend it to a rehabber in another state. I think that the loan should be backed by a RE property. Therefore, I will want the total loans in front of me not to exceed the value of the property. But besides checking the liens and the value of the property what else should be checked and how? Also, do I need some sort of licence? And how does one get around the usury laws? What kind of forms are used for this?
Since my company does HML in Texas I guess I would be suited to give some advise. First is your goal. If you want to do one deal at a time I would suggest you partner up with a invesor/rehabber you know and trust and start by doing one or two deals at a time. If you are highly capitalized (have lots of money or access to lots of it), you need to create a company and start building a reputation. The reputation will dictate the success of your HML business. DHLC is the branch of our company that is in Texas and we have been very successful by always having capital to fund deals and to do exactly what we commit to do.
Some pitfalls to beware of ; 1) people putting your through the entire document generation process and not closing loans for one reason or another, 2) Loaning on a property that needs fixup and the buyer does a lousy job on the rehab then walks on an upside down property, 3) and just like there are sharks for HMLs out there. There are shark investors out there that can take cash out of a deal and walk away from it with little or no recourse from you the HML.
There is a reason the rates are so high and that is because the risk is high!
Sorry,
To clarify why I think size of the business matters is because of the clientel you build up. Once you start doing a lot of deals we have found the clientel becomes more of the professional fix and flippers; therefore increasing your turnover. When I first started out we were working with new investors that took longer to do fix up work etc... It may not be the case always, but from everyone I have talked to it seems to go the same way. As your size increases so does the velocity of turnover.
My hard money lender has a course work and does seminars. I do not know his schedule, but you could email me and I could put you in touch. Look at my profile.
After you find a seller, what is the best and cheapest way to find an investor. How much do you charge for a commission and how do you handle the exchange of the money?
Leveraging someone who has these relationships with investors or institutions that purchase these notes is a good way to facilitate sale of note. I use local note purchasers. You can put an ad in the paper.
Do u want be a mtg broker or a private lender.
I too would like some assistance with with how do become a hard money lender. I am a newbie and had done some reading so I know a little but not enough to feel confident.
Assuming I have the money and want to lend it to a rehabber in another state. I think that the loan should be backed by a RE property. Therefore, I will want the total loans in front of me not to exceed the value of the property. But besides checking the liens and the value of the property what else should be checked and how? Also, do I need some sort of licence? And how does one get around the usury laws? What kind of forms are used for this?
Any help will be appreciated. Thanks.
Since my company does HML in Texas I guess I would be suited to give some advise. First is your goal. If you want to do one deal at a time I would suggest you partner up with a invesor/rehabber you know and trust and start by doing one or two deals at a time. If you are highly capitalized (have lots of money or access to lots of it), you need to create a company and start building a reputation. The reputation will dictate the success of your HML business. DHLC is the branch of our company that is in Texas and we have been very successful by always having capital to fund deals and to do exactly what we commit to do.
Some pitfalls to beware of ; 1) people putting your through the entire document generation process and not closing loans for one reason or another, 2) Loaning on a property that needs fixup and the buyer does a lousy job on the rehab then walks on an upside down property, 3) and just like there are sharks for HMLs out there. There are shark investors out there that can take cash out of a deal and walk away from it with little or no recourse from you the HML.
There is a reason the rates are so high and that is because the risk is high!
Steve
Sorry,
To clarify why I think size of the business matters is because of the clientel you build up. Once you start doing a lot of deals we have found the clientel becomes more of the professional fix and flippers; therefore increasing your turnover. When I first started out we were working with new investors that took longer to do fix up work etc... It may not be the case always, but from everyone I have talked to it seems to go the same way. As your size increases so does the velocity of turnover.
My hard money lender has a course work and does seminars. I do not know his schedule, but you could email me and I could put you in touch. Look at my profile.
Raybillion -
I would gladly help you get set up with everything you need to be successful with HML. Click on my profile and e-amil if I can be of assistance.
C-
Thanks to both of you!
After you find a seller, what is the best and cheapest way to find an investor. How much do you charge for a commission and how do you handle the exchange of the money?
Leveraging someone who has these relationships with investors or institutions that purchase these notes is a good way to facilitate sale of note. I use local note purchasers. You can put an ad in the paper.