private lenders

[happyardy 0]

Guys,

A lot of creative real estate websites have a link called "Investors". It usually calls for private lenders, promising 10% or more on their investments secured with a first mortgage etc.

 

All you pros, who do raise funds from private lenders; would you be willing to share with us how you do it? How does it work from our side(the creative investor's) ? I mean, from, once you get the money from them to the day you return it etc. , how do you go about the whole thing?

 

I may have friends who might be interested in lending me some money for a good return, but at this point I dont know how it works fully.

 

thanks

- Ardy

[Jonathan RexfordFL 8]

Ardy,

 

From a marketing stand point, I advertise and use a report that I give potential lenders then follow up. My plan is simple. I pay 9 & 11% secured by either a 1st mortgage or 2nd mortgage with a Max LTV of 80%. Private lender gets a mortgage against the property, Hazzard insurance, Mortgagee's title insurance, Appraisal for the property. I set it up the same way the banks do.

 

I do have some lenders that just send me the check or drop off the cash without a note or mortgage. I get it secured very fast.

 

In case you are wondering about the rates. 9% is 1st mortgage and 11% is 2nd mortgage by the way I make no payments on 2nd mortgage for the 11%.

 

I am currently looking at my properties and I see that I am leveraged 62.35% LTV. Which I am pround of.

 

HTH

[happyardy 0]

Ardy,

 

From a marketing stand point, I advertise and use a report that I give potential lenders then follow up. My plan is simple. I pay 9 & 11% secured by either a 1st mortgage or 2nd mortgage with a Max LTV of 80%. Private lender gets a mortgage against the property, Hazzard insurance, Mortgagee's title insurance, Appraisal for the property. I set it up the same way the banks do.

 

I do have some lenders that just send me the check or drop off the cash without a note or mortgage. I get it secured very fast.

 

In case you are wondering about the rates. 9% is 1st mortgage and 11% is 2nd mortgage by the way I make no payments on 2nd mortgage for the 11%.

 

I am currently looking at my properties and I see that I am leveraged 62.35% LTV. Which I am pround of.

 

HTH

 

Jonathan,

Thanks for the info.

Say, I have 4 friends who are willing to loan $10K each to me.

How would I go from there ? I guess if they need their money to be secured by 1st mortgage, then they need to come up with a lot more cash than that, right ?

 

I have a few people who might be able to loan only small amounts to me. Can you describe what my options are in that case ?

 

Also, for how long do you keep those loans ? What is the term ?

 

Anything else that you can let this newbie know about this area will be much appreciated.

 

thanks

- Ardy

[Jonathan RexfordFL 8]

3-5 year term on most cases.

 

As far as your friends. Your Friends need to create an LLC and then make the loan from LLC for there money to be secured.

 

Small amounts of money is great for holding costs and sub2 transcations or short sale of a second mortgage.

 

But you need to make sure that your LTV's are in check.

[tracy5963 0]

Johnathan I was wondering about the Sub 2 Houses I keep runnig into Sub 2s that are higher on the LTV scale some got more loan than they should have How if any way do you use Private money to get those and stay safe for investopr . I guess stay away form the house . They are so willing to give deed.

[Jonathan RexfordFL 8]

I will buy sub2 as high as 85% of market value for a house that needs know work if it has a good loan and is a great house. If they owe more than that then the seller will need to pay me.

[Rich08 0]

I will buy sub2 as high as 85% of market value for a house that needs know work if it has a good loan and is a great house. If they owe more than that then the seller will need to pay me.

 

 

I have tried that. Haven't found anyone to eager to pay me to buy their house yet though. Now that is a motivated seller. Those are actually the ones I usually end up with an option on.