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Ad ID: 51663595
Visits: 100
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Location:
South Florida
Date Listed: May-15-08 Private Money Lending My name is Scott, and I own a Property investment company and a mortgage company. I work with a large number of investors who purchase property directly from the Bank and / or other entities that require hard money to close quickly. General rule of thumb in purchasing property from the bank is that they will take a cash offer from the bank VS. Traditional financing. Also, some property that needs repair doesn’t qualify for conventional financing. There are many reasons my buyers require hard Money. As I mentioned, I deal with seasoned investors and/or credit worth buyers only. Generally in the hard money business they base loans only upon a percentage of equity in a property. I base the amount we will loan on that as well but for added security for the private money lender we ensure they are seasoned investors and/or credit worthy buyers. What I do on each loan request we receive is as follows: For example: I receive a loan request for 200,000.00 for a property located in Ft. Lauderdale, Florida. Here is what I do…………….. · Pull credit on the borrower to establish creditworthiness and/or investment experience · Determine a preliminary value of the property using recent sold comps, active listings, property appraisers value….we also check cyber homes, zillow, and Bank of America sites to further compare value. If it meets the 65 % or less requirements, I will have a pencil search conducted by our appraiser to further confirm. · Within 24 hours I personally inspect the property, its condition, the neighborhood, and extent of repairs needed. · If the Individual and property meet my requirements, I then meet with the borrower to discuss their plan for the property. What I achieve there is what they intent to do with the property. Most borrowers generally repair the property to resell, some repair the property, and refinance the property conventionally…..then rent it. · If everything meets my criteria, I then gather the required data for my hard money lenders to review. This information includes the following: 1. 1003/1008 ( formal loan application ) 2. Copy of credit report 3. Copy of appraisal and/or copy of documents that substantiates the value of the property · I send this information out to the private money lenders that match. I send it out to one at a time. I request an answer in 24 hours or less. (All my private money lenders give me parameters such as dollar amount they look to invest and types of property). · Once the private lenders agree to fund the deal, it is sent over for our attorney to draft all the legal document, mortgage notes, etc., and prepare for closing. All the private money lenders receive documents to review for accuracy from our attorney prior to closing. One day prior to closing the private money lenders wire the money directly to the attorney for distribution. All the related fees such as document prep fees etc are all paid by the borrowers. Private money highlights: All private money lenders receive the following compensation: 2-4 points at closing Interest paid at 11-15% depending on the scenario. (Rates are set by me for each case) generally 12-14% average All loans are interest only for a one year term. The note balloons at the end of one year. Most private money lenders we work with like to have their money re-invested to benefit from the points collected at closing. For example……….on a $200,000.00 loan earning 3 point at closing the borrower collects $6,000.00 in points at each closing. If that money was reinvested 3 times they would make $18,000.00 just in points, not including the interest paid monthly on that money. This is a brief overview on how we operate with the use of hard money lending. If you have an interest to know more, or have specific questions, I encourage you to send me an email. I may also be reached on my cell. |
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