To Lend or Not to Lend
Investor · Charleston, SC · Member since 2024 · 16 posts · 6 votes
To Lend or Not to Lend
Most Popular Reply
Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes
1yUrgency is often one of the first signs of a scam, @Kala Samuel. I know it’s easy to be cavalier over $15k, but why would you conduct business with a stranger for a property you haven’t seen? How did you meet this person?
Don’t be blinded by the percent return. You will be taking your profit to the bank in dollars, and it won't be much. Note that a 20% return over 90 days is an 80% annualized rate. You didn’t provide the state in which the property is located, but unless there is an exemption, this loan would almost certainly be deemed usurious.
How are you verifying this person’s background? Though I agree with @Rick Pozos about obtaining title insurance, the title company will not completely vet your borrower or the property. This is on you.
I’m always leery here when an inexperienced lender accepts loan documents from their borrower. Who will review them to ensure they're enforceable? Who will handle the mortgage recording?
How did you confirm the $25k construction budget and why did she blow it in the first place? What if more is needed? How did you confirm the construction schedule?
Like any other real estate loan, ensure you are listed as the mortgagee on her fire and liability insurance policy.
Get a document indicating she intends to sell this property as part of her business. Verify that she or a family member will not be moving in, and clarify the use of the funds in writing. Your money should be wired to her business account if she has one.
Last, with her approval of the invoices, you should pay the contractor. Not her.
29 Replies
- 1yMatthew CrivelliBusiness MemberLender · MA · Member since 2021 · 1k+ posts · 1k+ votesThe property is free and clear so if you put a 1st lien position on the house it's low risk. Use a closing attorney to draw everything up. If it was me, I would give them a 6 month pay back period. Everyone always under estimates the time it will take to repair / sell. Also 20% of 15k is only 3k. I would counter and ask for 5k and they pay for the cost of the attorney.
Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
Freedom Capital Funding, LLC523 Reviews - Lender · Nashville, TN · Member since 2024 · 700 posts · 284 votes1y
If your secured, why not. Seems like a good return.
- Investor · Charleston, SC · Member since 2024 · 16 posts · 6 votes1y
Quote from @Deven Ziertman:
Lending on a property with no existing debt can be a low-risk opportunity, but here are a few things to consider before moving forward:
✅ 1st Lien Position is Key – Ensure your loan is recorded as a first-position lien to protect your investment.
✅ Realistic Timeline – Renovations and sales often take longer than expected. A 6-month term instead of 90 days might provide a better buffer.
✅ Legal Protection – Work with a closing attorney to draft a promissory note and mortgage agreement to secure the loan.
✅ Interest Structure – A flat 20% fee on $15K is only $3K. If risk is a concern, adjusting the fee or requiring a higher return might make it more worthwhile.If everything checks out, this could be a solid short-term lending opportunity with a strong ROI.
She's sending over a drafted promissory note and mortgage lien. She showed the work she's already had done on the property. She's sending pics and numbers for the remaining work to be done, too. Honestly, she is just in a bind. Thanks for the input! I've never done private lending, so it's a little new sending chunks of money to strangers!!
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
oh i did not see free in clear in my other post - something seems up, why not get an equity line from a bank. How is she paying you back?
7e investments53 Reviews- Investor · Charleston, SC · Member since 2024 · 16 posts · 6 votes1y
Quote from @Chris Seveney:
Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
oh i did not see free in clear in my other post - something seems up, why not get an equity line from a bank. How is she paying you back?
She had another investor, but he had to pull out. She's already exhausted her funds and she needs it pretty quick. She has to pay contractors next week. I'm guessing the bank process might take too long.
- Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes1y
Quote from @Kala Samuel:
Quote from @Chris Seveney:
Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
oh i did not see free in clear in my other post - something seems up, why not get an equity line from a bank. How is she paying you back?
She had another investor, but he had to pull out. She's already exhausted her funds and she needs it pretty quick. She has to pay contractors next week. I'm guessing the bank process might take too long.
Whether the loan is $15k or $500k, the credit risk is the same - only your exposure and expected loss changes with the loan size. A bad credit doesnt necessarily become a good credit because you have a smaller loan. I say this because the small loan size doesnt mean you dont have to properly analyze and underwrite this loan. Run through the 5C's and see if the deal objectively makes sense.
I'm very concerned by the fact that the borrower is flipping a house but doesnt have enough liquidity to come up with $15k. She should be able to take cash advances on a couple credit cards or a personal loan that would be faster, simpler, and cheaper than what's being proposed if $15k for contractor payments is all that's needed. Also, DOM in CHS is creeping up and is currently around 40-50. Expecting to finish construction, list, and sell/settle in under 90 days is likely unrealistic. Lastly, the margins are a little tight.
All of this leads me to believe this is an inexperienced investor. Id really dig into the ARV, carry costs, and repair estimates. This doesnt mean it isnt potentially a good deal, but I'd say that extra caution is in order.
I would not use the borrower's docs as is without at least having your own attorney review them. I would also get a title search and lender's title policy and have your attorney review the chain of title and title policy. The closing attorney is unlikely to review title for you or advise you - they do not represent your interests. You will likely spend $1,000 - $2,000 on a set of documents, including note, mortgage, PG, pledge of leases, affidavit/statement of business purpose/use, and closing instruction letter from an attorney. Get an opinion on title and commitment from your attorney. You'll probably need to redline several of the title policy exceptions, especially since this is a flip and was recently acquired - your attorney can advise on this. Also, if an entity is involved, you'll want to check that it's in good standing an confirm ownership/control with entity docs. If there is one more than one member/owner, get a copy of the operating agreement to ensure that the borrower has authority to encumber/take on debt on behalf of the entity.
Last thing - get listed as mortgagee and loss payee on the property insurance prior to Closing. Insure that the correct policy type and coverage limits are in place. A standard homeowners policy isnt going to work on a vacant investment property that is undergoing rehab.
I personally would validate the outstanding contractor invoices and would disburse to the contractors directly at Closing to settle the invoices. I would not just cut a check to the borrower at closing and trust them to pay the contractors. If she doesnt pay them and uses the money for something else, they could file a lien that may prime your mortgage.
This is a just a high level recap of what's needed to do this properly. If you don't complete this actions, just understand that you're incrementally increasing your risk with each thing you omit.
- Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes1y
I would definitely do a title search with a title company. It should only take a few days. Close at a title company. This way you have insurance if something goes wrong. The title company makes sure that she is the actual owner of the house. They check ownership. They check her drivers license. They will know if something is not right.
Just think if I went to you asking for 20k for a house that I saw was under construction and said that it was mine. Lend me some money, I will give you a lien. If it is a stranger, do you really know if it is their house????????
- Lender · Los Angeles, CA · Member since 2009 · 1k+ posts · 2k+ votes1y
Urgency is often one of the first signs of a scam, @Kala Samuel. I know it’s easy to be cavalier over $15k, but why would you conduct business with a stranger for a property you haven’t seen? How did you meet this person?
Don’t be blinded by the percent return. You will be taking your profit to the bank in dollars, and it won't be much. Note that a 20% return over 90 days is an 80% annualized rate. You didn’t provide the state in which the property is located, but unless there is an exemption, this loan would almost certainly be deemed usurious.
How are you verifying this person’s background? Though I agree with @Rick Pozos about obtaining title insurance, the title company will not completely vet your borrower or the property. This is on you.
I’m always leery here when an inexperienced lender accepts loan documents from their borrower. Who will review them to ensure they're enforceable? Who will handle the mortgage recording?
How did you confirm the $25k construction budget and why did she blow it in the first place? What if more is needed? How did you confirm the construction schedule?
Like any other real estate loan, ensure you are listed as the mortgagee on her fire and liability insurance policy.
Get a document indicating she intends to sell this property as part of her business. Verify that she or a family member will not be moving in, and clarify the use of the funds in writing. Your money should be wired to her business account if she has one.
Last, with her approval of the invoices, you should pay the contractor. Not her.
- Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes1y
Quote from @Jeff S.:
Urgency is often one of the first signs of a scam, @Kala Samuel. I know it’s easy to be cavalier over $15k, but why would you conduct business with a stranger for a property you haven’t seen? How did you meet this person?
Don’t be blinded by the percent return. You will be taking your profit to the bank in dollars, and it won't be much. Note that a 20% return over 90 days is an 80% annualized rate. You didn’t provide the state in which the property is located, but unless there is an exemption, this loan would almost certainly be deemed usurious.
How are you verifying this person’s background? Though I agree with @Rick Pozos about obtaining title insurance, the title company will not completely vet your borrower or the property. This is on you.
I’m always leery here when an inexperienced lender accepts loan documents from their borrower. Who will review them to ensure they're enforceable? Who will handle the mortgage recording?
How did you confirm the $25k construction budget and why did she blow it in the first place? What if more is needed? How did you confirm the construction schedule?
Like any other real estate loan, ensure you are listed as the mortgagee on her fire and liability insurance policy.
Get a document indicating she intends to sell this property as part of her business. Verify that she or a family member will not be moving in, and clarify the use of the funds in writing. Your money should be wired to her business account if she has one.
Last, with her approval of the invoices, you should pay the contractor. Not her.
@Jeff S. I saw this comment after writing my own. Pretty much mirrors my own thinking.
- 1yDoug SmithPro MemberLender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
I don't know usury laws in SC, but you'll want to check the usury (highest interest rate) you can charge in SC. I'm sure you're fine and you're an individual, so I doubt if the state is going to come after you even if it is over the max rate in the state, but as the carpenter says "measure twice and cut once". Some states have really low maximum rates that you can charge. Keep in mind, you're talking about 20% for 90 days...that's 80% annualized interest. You don't want to give their attorney a defense if things go sideways. Does anyone know off the top of your head what usury is in SC? We don't do much business there and when we do, we're only 9-11%, so I honestly don't know.
- 1yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Doug Smith:
I don't know usury laws in SC, but you'll want to check the usury (highest interest rate) you can charge in SC. I'm sure you're fine and you're an individual, so I doubt if the state is going to come after you even if it is over the max rate in the state, but as the carpenter says "measure twice and cut once". Some states have really low maximum rates that you can charge. Keep in mind, you're talking about 20% for 90 days...that's 80% annualized interest. You don't want to give their attorney a defense if things go sideways. Does anyone know off the top of your head what usury is in SC? We don't do much business there and when we do, we're only 9-11%, so I honestly don't know.
Usury laws when violated allow the borrower to counter claim for treble damages.
So one could end up losing principal if challenged.. although very few borrowers even know what usury is and its state specific.. Like in Oregon there basically is no limit to % charged but loans have to be 50k and higher.. Although I suspect there is a first on this property i highly doubt they own it free and clear. small seconds behind larger first on a construction bail out are about as risky as they come. @Jeff S. - Investor · Charleston, SC · Member since 2024 · 16 posts · 6 votes1yI looked it up, it's 8.75. Do I suggest extending the payback period to get the interest rate lower? I saw someone post 6 months
Quote from @Doug Smith:
I don't know usury laws in SC, but you'll want to check the usury (highest interest rate) you can charge in SC. I'm sure you're fine and you're an individual, so I doubt if the state is going to come after you even if it is over the max rate in the state, but as the carpenter says "measure twice and cut once". Some states have really low maximum rates that you can charge. Keep in mind, you're talking about 20% for 90 days...that's 80% annualized interest. You don't want to give their attorney a defense if things go sideways. Does anyone know off the top of your head what usury is in SC? We don't do much business there and when we do, we're only 9-11%, so I honestly don't know.
- Contractor · Aptos, CA · Member since 2020 · 32 posts · 11 votes1y
A thought on Usury Laws governing high interest rates:
I'm learning that a way around this, and please correct me if I'm wrong, is to Joint Venture, JV with the borrower so you get paid an agreed upon portion of the profits. A fixed fee, as opposed to a percentage rate. By doing it this way, it is not considered a loan and not subject to SEC guidelines, Usury Laws etc.( I have not done this but am a student of the Gator Method and this is what they are telling me )
- Investor · Charleston, SC · Member since 2024 · 16 posts · 6 votes1y
Quote from @Matt Ellis:
A thought on Usury Laws governing high interest rates:
I'm learning that a way around this, and please correct me if I'm wrong, is to Joint Venture, JV with the borrower so you get paid an agreed upon portion of the profits. A fixed fee, as opposed to a percentage rate. By doing it this way, it is not considered a loan and not subject to SEC guidelines, Usury Laws etc.( I have not done this but am a student of the Gator Method and this is what they are telling me )
I like this idea. I'll have to research it. Thanks!
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y.
Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
Your comment: "I have been presented with the opportunity"
By a friend? By a relative? By a Sasquatch? By a "creative finance student"? By random email?- Investor · Charleston, SC · Member since 2024 · 16 posts · 6 votes1y
Quote from @Ken M.:
.Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
Your comment: "I have been presented with the opportunity"
By a friend? By a relative? By a Sasquatch? By a "creative finance student"? By random email?She posted in a creative finance real estate group for my state. We met via FaceTime. She did walk me through the property. She showed me the work completed and the work remaining. Her LLC is in good standing.
Next I need to verify the clear title
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yHave coffee with her, walk the property, have a property inspector with you, use an attorney for all paperwork. Personally I would go a step further and ask for documentation as to how much it will sell for when completed.
Quote from @Kala Samuel:
Quote from @Ken M.:
.Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
Your comment: "I have been presented with the opportunity"
By a friend? By a relative? By a Sasquatch? By a "creative finance student"? By random email?She posted in a creative finance real estate group for my state. We met via FaceTime. She did walk me through the property. She showed me the work completed and the work remaining. Her LLC is in good standing.
Next I need to verify the clear title
- Investor · Charleston, SC · Member since 2024 · 16 posts · 6 votes1yShe's upstate; I doubt I can make it for coffee. Would requesting her comps suffice?
Quote from @Ken M.:
Have coffee with her, walk the property, have a property inspector with you, use an attorney for all paperwork. Personally I would go a step further and ask for documentation as to how much it will sell for when completed.Quote from @Kala Samuel:
Quote from @Ken M.:
.Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
Your comment: "I have been presented with the opportunity"
By a friend? By a relative? By a Sasquatch? By a "creative finance student"? By random email?She posted in a creative finance real estate group for my state. We met via FaceTime. She did walk me through the property. She showed me the work completed and the work remaining. Her LLC is in good standing.
Next I need to verify the clear title
- Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes1y
Quote from @Kala Samuel:
She's upstate; I doubt I can make it for coffee. Would requesting her comps suffice?Quote from @Ken M.:
Have coffee with her, walk the property, have a property inspector with you, use an attorney for all paperwork. Personally I would go a step further and ask for documentation as to how much it will sell for when completed.Quote from @Kala Samuel:
Quote from @Ken M.:
.Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
Your comment: "I have been presented with the opportunity"
By a friend? By a relative? By a Sasquatch? By a "creative finance student"? By random email?She posted in a creative finance real estate group for my state. We met via FaceTime. She did walk me through the property. She showed me the work completed and the work remaining. Her LLC is in good standing.
Next I need to verify the clear title
Get her comps, but you should be coming up with your own. Her comps may add to yours or give you a starting point, but I wouldnt rely solely on them.
- Investor · Charleston, SC · Member since 2024 · 16 posts · 6 votes1yAgreed.
Quote from @Patrick Roberts:
Quote from @Kala Samuel:
She's upstate; I doubt I can make it for coffee. Would requesting her comps suffice?Quote from @Ken M.:
Have coffee with her, walk the property, have a property inspector with you, use an attorney for all paperwork. Personally I would go a step further and ask for documentation as to how much it will sell for when completed.Quote from @Kala Samuel:
Quote from @Ken M.:
.Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
Your comment: "I have been presented with the opportunity"
By a friend? By a relative? By a Sasquatch? By a "creative finance student"? By random email?She posted in a creative finance real estate group for my state. We met via FaceTime. She did walk me through the property. She showed me the work completed and the work remaining. Her LLC is in good standing.
Next I need to verify the clear title
Get her comps, but you should be coming up with your own. Her comps may add to yours or give you a starting point, but I wouldnt rely solely on them.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y
Quote from @Kala Samuel:
Agreed.Quote from @Patrick Roberts:
Quote from @Kala Samuel:
She's upstate; I doubt I can make it for coffee. Would requesting her comps suffice?Quote from @Ken M.:
Have coffee with her, walk the property, have a property inspector with you, use an attorney for all paperwork. Personally I would go a step further and ask for documentation as to how much it will sell for when completed.Quote from @Kala Samuel:
Quote from @Ken M.:
.Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
Your comment: "I have been presented with the opportunity"
By a friend? By a relative? By a Sasquatch? By a "creative finance student"? By random email?She posted in a creative finance real estate group for my state. We met via FaceTime. She did walk me through the property. She showed me the work completed and the work remaining. Her LLC is in good standing.
Next I need to verify the clear title
Get her comps, but you should be coming up with your own. Her comps may add to yours or give you a starting point, but I wouldnt rely solely on them.
Since you don't want to go to the property, and I've seen a lot of fraud over the years, and things can be faked pretty easily these days. I'd require the address, and thoroughly look at it on redfin, zillow and google maps, I'd have an uber driver drive by the address and take pictures of the property, and the work that has been done, and any contractor vehicles at the property and of the person who meets me there.
I'd require a text picture of the driver's license and auto plates of the person who meets the uber driver who says they own the house.
I'd look in county records and see who owns the property and what liens are against the property. I'd contact the city building department and check what permits & citations have been pulled, and what clean up orders have been issued. I'd want a copy of an electric bill for the property for identification. I might also ask for receipts for materials to show dates and amount and verify work has already started. That is where I would start, but that's just me.Just remember the Golden Rule of Real Estate Investing - "He who has the gold, makes the rules"
- Investor · Charleston, SC · Member since 2024 · 16 posts · 6 votes1y
Quote from @Ken M.:
Since you don't want to go to the property, and I've seen a lot of fraud over the years, and things can be faked pretty easily these days. I'd require the address, and thoroughly look at it on redfin, zillow and google maps, I'd have an uber driver drive by the address and take pictures of the property, and the work that has been done, and any contractor vehicles at the property and of the person who meets me there.Quote from @Kala Samuel:
Agreed.Quote from @Patrick Roberts:
Quote from @Kala Samuel:
She's upstate; I doubt I can make it for coffee. Would requesting her comps suffice?Quote from @Ken M.:
Have coffee with her, walk the property, have a property inspector with you, use an attorney for all paperwork. Personally I would go a step further and ask for documentation as to how much it will sell for when completed.Quote from @Kala Samuel:
Quote from @Ken M.:
.Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
Your comment: "I have been presented with the opportunity"
By a friend? By a relative? By a Sasquatch? By a "creative finance student"? By random email?She posted in a creative finance real estate group for my state. We met via FaceTime. She did walk me through the property. She showed me the work completed and the work remaining. Her LLC is in good standing.
Next I need to verify the clear title
Get her comps, but you should be coming up with your own. Her comps may add to yours or give you a starting point, but I wouldnt rely solely on them.
I'd require a text picture of the driver's license and auto plates of the person who meets the uber driver who says they own the house.
I'd look in county records and see who owns the property and what liens are against the property. I'd contacts the city building department and check what permits & citations have been pulled, and what clean up orders have been issued. I'd want a copy of an electric bill for the property for identification. That is where I would start, but that's just me.Those are all good verification points.
Her deed is free and clear. It's in her LLC. It's in good standing. Her business logo is literally her face lol.
When i say she walked me through the property, it was a virtual walk through. She didn't send me like some old photos. Her appliances and flooring are purchased and in boxes. I could see the foundation repair (brick house) also explains why she needs the exterior repainted. The bricks don't match.
I've got first lien position, promissory note, personal guarantee. I asked about JV, but since she's already in the middle it would cost her more to go to an attorney to add me. She's offered to jv with me on another project she's started. The seller hasn't accepted her offer yet.
Would a title company be willing to look over the documentation for me? The usury law is scaring me a bit.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y
Quote from @Kala Samuel:
Quote from @Ken M.:
Since you don't want to go to the property, and I've seen a lot of fraud over the years, and things can be faked pretty easily these days. I'd require the address, and thoroughly look at it on redfin, zillow and google maps, I'd have an uber driver drive by the address and take pictures of the property, and the work that has been done, and any contractor vehicles at the property and of the person who meets me there.Quote from @Kala Samuel:
Agreed.Quote from @Patrick Roberts:
Quote from @Kala Samuel:
She's upstate; I doubt I can make it for coffee. Would requesting her comps suffice?Quote from @Ken M.:
Have coffee with her, walk the property, have a property inspector with you, use an attorney for all paperwork. Personally I would go a step further and ask for documentation as to how much it will sell for when completed.Quote from @Kala Samuel:
Quote from @Ken M.:
.Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
Your comment: "I have been presented with the opportunity"
By a friend? By a relative? By a Sasquatch? By a "creative finance student"? By random email?She posted in a creative finance real estate group for my state. We met via FaceTime. She did walk me through the property. She showed me the work completed and the work remaining. Her LLC is in good standing.
Next I need to verify the clear title
Get her comps, but you should be coming up with your own. Her comps may add to yours or give you a starting point, but I wouldnt rely solely on them.
I'd require a text picture of the driver's license and auto plates of the person who meets the uber driver who says they own the house.
I'd look in county records and see who owns the property and what liens are against the property. I'd contacts the city building department and check what permits & citations have been pulled, and what clean up orders have been issued. I'd want a copy of an electric bill for the property for identification. That is where I would start, but that's just me.Those are all good verification points.
Her deed is free and clear. It's in her LLC. It's in good standing. Her business logo is literally her face lol.
When i say she walked me through the property, it was a virtual walk through. She didn't send me like some old photos. Her appliances and flooring are purchased and in boxes. I could see the foundation repair (brick house) also explains why she needs the exterior repainted. The bricks don't match.
I've got first lien position, promissory note, personal guarantee. I asked about JV, but since she's already in the middle it would cost her more to go to an attorney to add me. She's offered to jv with me on another project she's started. The seller hasn't accepted her offer yet.
Would a title company be willing to look over the documentation for me? The usury law is scaring me a bit.
You definitely need title, escrow and insurance.
Of course, a title and escrow company can't answer your question about usury, that requires an attorney.There can be a difference between personal loans and business loans. Credit cards for instance can be 29% in some places. Sometimes, there can be other cosiderations to make up the difference, as in a percentage of the profit.
- Investor · Charleston, SC · Member since 2024 · 16 posts · 6 votes1yI found an attorney! I'm meeting with him Monday. Thanks Ken
Quote from @Ken M.:
Quote from @Kala Samuel:
Quote from @Ken M.:
Since you don't want to go to the property, and I've seen a lot of fraud over the years, and things can be faked pretty easily these days. I'd require the address, and thoroughly look at it on redfin, zillow and google maps, I'd have an uber driver drive by the address and take pictures of the property, and the work that has been done, and any contractor vehicles at the property and of the person who meets me there.Quote from @Kala Samuel:
Agreed.Quote from @Patrick Roberts:
Quote from @Kala Samuel:
She's upstate; I doubt I can make it for coffee. Would requesting her comps suffice?Quote from @Ken M.:
Have coffee with her, walk the property, have a property inspector with you, use an attorney for all paperwork. Personally I would go a step further and ask for documentation as to how much it will sell for when completed.Quote from @Kala Samuel:
Quote from @Ken M.:
.Quote from @Kala Samuel:
I have been presented with the opportunity to Lend to an investor on a property she owns free and clear.
"I am looking for a short term 90 day or less loan secured by the property for rehab costs of $15,000 @ 20% flat fee interest on a property I own free and clear. My goal is to finish the work in 30 days or less and then list it and sell it. We will do a promissory note with personal guarantee and a mortgage note lien to secure the funds you the house.
Purchased $190k
Repairs $25k
(I’ve put $10k of my own money in repairs already)
Selling for $279k"
what do i need to consider? Any tips?
Your comment: "I have been presented with the opportunity"
By a friend? By a relative? By a Sasquatch? By a "creative finance student"? By random email?She posted in a creative finance real estate group for my state. We met via FaceTime. She did walk me through the property. She showed me the work completed and the work remaining. Her LLC is in good standing.
Next I need to verify the clear title
Get her comps, but you should be coming up with your own. Her comps may add to yours or give you a starting point, but I wouldnt rely solely on them.
I'd require a text picture of the driver's license and auto plates of the person who meets the uber driver who says they own the house.
I'd look in county records and see who owns the property and what liens are against the property. I'd contacts the city building department and check what permits & citations have been pulled, and what clean up orders have been issued. I'd want a copy of an electric bill for the property for identification. That is where I would start, but that's just me.Those are all good verification points.
Her deed is free and clear. It's in her LLC. It's in good standing. Her business logo is literally her face lol.
When i say she walked me through the property, it was a virtual walk through. She didn't send me like some old photos. Her appliances and flooring are purchased and in boxes. I could see the foundation repair (brick house) also explains why she needs the exterior repainted. The bricks don't match.
I've got first lien position, promissory note, personal guarantee. I asked about JV, but since she's already in the middle it would cost her more to go to an attorney to add me. She's offered to jv with me on another project she's started. The seller hasn't accepted her offer yet.
Would a title company be willing to look over the documentation for me? The usury law is scaring me a bit.
You definitely need title, escrow and insurance.
Of course, a title and escrow company can't answer your question about usury, that requires an attorney.There can be a difference between personal loans and business loans. Credit cards for instance can be 29% in some places. Sometimes, there can be other cosiderations to make up the difference, as in a percentage of the profit.
- Member since 2025 · 2 posts · 0 votes1y
So a lot of people make great sense, and just so you know, when she has contractors already working on the home, that’s a nightmare because you have Broken priority and the Contractor can place liens on the home, and you might night get your Money Back, set up the money through title, who cares if the contractors are owed money, you need to Set yourself up for success, walk the property of your in the same State or City if not call a local Realtor or a Home Inspector and request an inspection before you wire the funds. Make sure you have lien waivers from all the contractors, each contractor is paid from the Title company with a draw inspection of the work. Let me know if you have any additional questions
Chris Davis
Barrett Financial Group
- Lender · Tampa, FL · Member since 2018 · 18 posts · 4 votes1y
Be cautious here as others have said, but you should set your own lending guidlines, and let it follow as such.
If this was presented to me, I would only offer my terms, not accept hers. Title has to be clear, my attorney will draft docs, held in an LLC, then 12% annual and 6% origination on whatever amount she needs.
Should they decline, that's on them, but will weed out any scams and ensure your capital is secure and you are not breaking any usury or other laws.
- Rental Property Investor · Member since 2018 · 70 posts · 38 votes1y
Sounds like a solid opportunity with a low LTV and a clear exit plan. A few things I'd want to confirm before moving forward:
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Title & Lien Position – Just to ensure I’m in first position with no surprises.
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Exit Timeline – 30 days is quick! What’s your backup plan if the sale takes longer?
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Legal Docs – Promissory note + mortgage lien are great. Would want everything properly recorded.
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Interest & Terms – 20% flat fee works, but let’s make sure the structure makes sense in case of delays.
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