Comments on: Is Private Lending Right For You? http://www.biggerpockets.com/renewsblog/2009/01/09/private-lending/ Learn, Network, Invest Sat, 11 Feb 2012 01:23:53 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Joshua Dorkinhttp://www.biggerpockets.com/renewsblog/2009/01/09/private-lending/#comment-63163 Joshua Dorkin Fri, 09 Jan 2009 20:09:52 +0000 http://www.biggerpockets.com/renewsblog/?p=3397#comment-63163 Great tips, Erika and Thomas! Thanks for the input. Great tips, Erika and Thomas! Thanks for the input.

]]> By: Thomas Phelanhttp://www.biggerpockets.com/renewsblog/2009/01/09/private-lending/#comment-63160 Thomas Phelan Fri, 09 Jan 2009 17:47:56 +0000 http://www.biggerpockets.com/renewsblog/?p=3397#comment-63160 Someone considering using an Self-Directed IRA for investing in another Company's "Trust Deed" portfoilo should also consider investing closer to home.For example working with a local Realtor who has clients with 25% - 35% down and are seeking a 1st Mortgage of 65% LTV - 75% LTV and willing to pay 7% - 9% interest plus a point or two.Another way is to lend the IRA funds as "Hard Money" at 15%+ plus 2 - 5 points. Fix and Flippers will pay this for quick access to cash.And the IRA can loan on a Non Recourse basis (very attractive) to another IRA that seeks financing with as much as 50% down and 50% LTV.Tom Phelan IRA Choices Someone considering using an Self-Directed IRA for investing in another Company’s “Trust Deed” portfoilo should also consider investing closer to home.

For example working with a local Realtor who has clients with 25% – 35% down and are seeking a 1st Mortgage of 65% LTV – 75% LTV and willing to pay 7% – 9% interest plus a point or two.

Another way is to lend the IRA funds as “Hard Money” at 15%+ plus 2 – 5 points. Fix and Flippers will pay this for quick access to cash.

And the IRA can loan on a Non Recourse basis (very attractive) to another IRA that seeks financing with as much as 50% down and 50% LTV.

Tom Phelan
IRA Choices

]]> By: Erika Napoletanohttp://www.biggerpockets.com/renewsblog/2009/01/09/private-lending/#comment-63159 Erika Napoletano Fri, 09 Jan 2009 17:25:40 +0000 http://www.biggerpockets.com/renewsblog/?p=3397#comment-63159 As someone who worked previously in the trust deed industry, I cannot stress enough the importance of due diligence. Treat each trust deed transaction as if you were moving forward with the purchase of your own home for your family.Make sure you have asked the company for (1) copy of the appraisal (with a date inside of 30 days on it!) (2) if the property is being pitched as "pre-leased" get a copy of the signed lease agreement (you're entitled!)(3) ask for the company's current default rate for their portfolio - if it's over 30%, keep shopping IMHO, and (4) have a clear understanding of how the company handles a potential default, know the foreclosure procedures (judicial, etc) for the state in which you're agreeing to make the loan, an how the company expects you to participate financially and consensus-wise throughout the process.Hope this helps! As someone who worked previously in the trust deed industry, I cannot stress enough the importance of due diligence. Treat each trust deed transaction as if you were moving forward with the purchase of your own home for your family.

Make sure you have asked the company for (1) copy of the appraisal (with a date inside of 30 days on it!) (2) if the property is being pitched as “pre-leased” get a copy of the signed lease agreement (you’re entitled!)(3) ask for the company’s current default rate for their portfolio – if it’s over 30%, keep shopping IMHO, and (4) have a clear understanding of how the company handles a potential default, know the foreclosure procedures (judicial, etc) for the state in which you’re agreeing to make the loan, an how the company expects you to participate financially and consensus-wise throughout the process.

Hope this helps!

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