Can I be a Hard Money Lender, With No Money, and Bad Credit????

22 Replies

LMAO,

Seriously, I was wondering what it was all about, and then I read some shlt and realized my mom and one of my uncles were hard money lenders back in the day. Seems like they only did it on commercial properties.

So anyway, how well funded does one have to be to get into this game? I'm sure there are loops to jump through, but what are they?

If you have enough money to fund a deal, you can be a lender.  Hard to be a lender if you have no money, though.  That's pretty much a deal killer.

I've got enough to fund hundreds of deals in Detroit, 2 or 3 in Philly, and ZERO in Manhattan.

Do I qualify?

How much interest can I charge?

Originally posted by @Joe Cummings :

I've got enough to fund hundreds of deals in Detroit, 2 or 3 in Philly, and ZERO in Manhattan.

Do I qualify?

How much interest can I charge?

There are limits to interest rates (usury laws) but you can up the rate by charging points on the loans. And don't lend to Owner occupants.

@Joe Cummings

  funny post... I am sure you can maneuver through a few Detroit loans an philly loans..

But as Jon said no money is kind of a non starter for a lender   LOL...

But if you send me 999.00 for my course on how to be a private money lender with no credit and non of your own money I will tell you the super secrets you need to know so you can be like others and be making 40k a month before you know it. !!

Hilarious post and responses.  

Jay,

But if you send me 999.00 for my course on how to be a private money lender with no credit and non of your own money I will tell you the super secrets you need to know so you can be like others and be making 40k a month before you know it. !!

You are a kind man:

If you will send me you bank info, social security number, date of birth and mothers maden name I will send you a check for your moneymaking course.  Look for the check as it will be drawn on the Bank of Nigeria.

I await your reply,

Thank you so much........


Truth be told, it is absolutely possible. Here's how:

1) If you are a licensed real estate broker, make hard money loans using other people's money (qualified investors) and make it a practice to take your fees and commissions in the form of equity in as many well-collateralized deals as you can

2) Whether licensed or not, you can buy notes with "hair" and solve the problems with either the debtor relationship, the documentation or the collateral. I've done this by purchasing via a "note for a note". 

Of course, if you don't have any money, you'd better have skill and understanding. Being connected to people with the problems and to the people with solutions is pretty important, too.

I'm still awaiting my check from my long lost saudi prince uncle so I can be a hard money lender.  I only had to pay to get my background checked, and inheritance taxes up front.  Should be here soon!

Seriously, my mother was worth maybe a million, but I don't know of her ever having more than maybe 3 or 4 hundred k in cash laying around.

Is that enough to be doing hard money?

Folks, times have changed, this ain't the Wild West any more.

The road some have suggested leads to up to 10 years in federal prison and/or $100,000 in fines, plus costs and very likely the loss of your loan.

Federal laws apply and no dang Real Estate Agent gets a free pass lending cash as a business, side line maybe and that is with your own money, not OPM.

Depends too on what you might loan on, owner occupied residence, might consider how bracelets feel with a stripped suit.

You can use funds from close family relatives, that is an exception to "your money".

How to do it? I suggest you find a licensed hard money lender or mortgage broker and go through them. Yes, they get a cut, but it's cheaper than being compliant with all the laws, rules and regulations.

Kind of odd thinking that just because someone has some money they think they can just enter into a profession and do it. If you have enough money, hire a professional, you probably don't represent yourself in court, operate on your own stomach or go mine diamonds? Hire professionals to do it for you, much cheaper and quicker to profit.

Now, I need to finish my book, How to Build A Space Ship, I'm going to fly people to the moon for vacations and I'm behind on building my ship. :) 

This post has been removed.

This post has been removed.

Although I thoroughly enjoyed reading the posts, I answer seriously.

Absolutely you can broker loans to private individuals without any cash or credit - the biggest piece is licensing and regulations in your area - study up on that, find the money then find the borrowers. You find the borrower and broker the loan to a private investor/lender. Not always as easy as described, but possible. 

Originally posted by @Travis Sperr :

Although I thoroughly enjoyed reading the posts, I answer seriously.

Absolutely you can broker loans to private individuals without any cash or credit - the biggest piece is licensing and regulations in your area - study up on that, find the money then find the borrowers. You find the borrower and broker the loan to a private investor/lender. Not always as easy as described, but possible. 

suggesting that anyone can broker loans isn't as easy as checking locally, there are federal laws involved and it depends on the type of loan to be made. No, it isn't easy, which was my point. Since  brokers go though criminal checks and credit checks, you need a clean record to be a mortgage broker, that leaves out the bad credit issue. So, no, you can't just broker loans to individuals without cash or credit. But, that isn't to say there are not plain old loan sharks dealing in back alleys using intimidation to collect debts waiting to rip someone off. :) 

@Bill Gulley

You just don't get it.

What I'm asking is at what point does it become profitable?

Loan amounts?

At 25,000?

50?

100?

If anyone thinks that I'm going to discuss my bank balance on a public forum, or with anyone I don't know personally,,,,,,

I'm beginning to think this forum is all big hats and no cattle

@Joe Cummings

@Rick H.

Joe,, Rick is absolutely correct in the 80's I owned a HML company in Oakland CA we had about 50 million under management.. and made great money and we had absolutely none of our own money in any deals.. Just like being a real estate broker instead of brokering real property your simply brokering loans.

To answer your question about being profitable that is all subjective to the individual I see many on BP say that they just want to get to 5k a month passive income and they could then retire... So it really depends.. Although in my estimation if your going to be in the lending business you need to make at least 150k a year plus.. and at 10 to 15% returns you can do the math.. But you will need licensure when required. And it needs to be your own money if your not licensed.

But many are probably happy just making their 12% on the couple hundred grand you describe that is your mothers nest egg.. and one would look at that as an investment not a business per se'.

in the HML business 5 million is really the minimum in my mind to have under management. if your making 2 to 4 points and brokering others money that will give you 100 to 200k a year with none of your own money.. and it really depends on what your lifestyle is. now Rick needs 5k to tune his Ferrari and my plane takes 700 dollars for one fillup ... so you can kind of do the math LOL

Originally posted by @Jay Hinrichs :

@Joe Cummings

  funny post... I am sure you can maneuver through a few Detroit loans an philly loans..

But as Jon said no money is kind of a non starter for a lender   LOL...

But if you send me 999.00 for my course on how to be a private money lender with no credit and non of your own money I will tell you the super secrets you need to know so you can be like others and be making 40k a month before you know it. !!

Does he need $40,000.00 for the personal mentoring after he takes your $999.00 course?

@Bill Gulley

  good point to get a NMLS license these days you must submit to a full FBI background check you must to the the Police department and get fingerprinted... And the state will run credit check along with a personal and business financial statement.

this is one of the reasons that so many MLO's are not in the business anymore they don't qualify based on the above regulations.

In CA.. you need only a RE brokers license and you do not have to get the third degree.

But every state is different. And owner occ loans are not worth doing unless its your livelihood.

Some states like WA if its commercial purpose loan then no license of any kind is required.. it is state specific but generally Bill is correct on all points.

@Richard Dunlop

  nope I mentor for free.. but I am choosy so far I have not chosen anyone to mentor.

actually truth be told when I do something with someone its the opposite they usually make a lot of money not spend it... !!  :)  But if I could be  a guru and get paid I would do it in a heart beat making a 5 to 10 mil  a year for putting my face up there and speaking a few times would be appealing... and I could care less what anyone on BP would think I would be too busy thinking about how to invest my money.. LOL

Pa says,

Line of Credit, Repurchase Agreement or Equivalent Mortgage Funding Capability of not less than: $1,000,000

So a million in bank deposits should cover that?

Well, not like I'm posting to help someone who made vialed threats to me and cursed at me in a previous post that was removed, but for the sake of other readers seeing that I was mentioned again;

Joe, you don't get it. I never asked how much you had, don't care, it's not about the funds available, I assume you have enough to ask in the first place, a $100,000 is plenty to start with. In fact, you don't want 5M sitting there if  you open the doors because you won't loan that out in a month to small investors.

If someone has bad credit, they don't need to try to be a licensed or registered lender. They need to clean up their credit.  

If I were to "lend" 100K, I'd get with 2 or 3 fix and fippers that were good but had no money and partner with them. You can take up to 50% as a partner, buy the house, provide construction money and sell it, I'd never worry about lending compliance issues or advertising, registrations, license, insurance (that a new lender probably can't get anyway) or chasing collections. You can't make that kind of money as a lender with 100K. Then grow the business side. Same with 1M!

If I never wanted to be active in operations, I'd drop off a check to a RMLO at 10-12% and sit back, go ride my bike bar hopping, I have a pro taking care of my money and his tail can be responsible.

BTW, Joe, I am a bean counter....educated, but I'm not 4' 11" at 92 pounds, I'm just over 6' and over 205 pounds, not really little. I don't have thick glasses, I do wear goggles on the Fat Boy, the Vulcan and a Trans-Alp. Fear is not a factor for an Army Ranger who taught hand to hand to Army pilots in training, so be assured, everything I have said I could say it in person. Now, let's start out on a different foot. :)  

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