Real Estate Professional · San Francisco-East bay, CA · Member since 2013 · 340 posts · 50 votes
Hi Folks,
Not sure if this question is appropriate here. ( Mods - Please note!). Let me know otherwise.
I am looking to ask a loan from an individual or group of people with specific %age per annum return to them. I will be using this amount to buy/rehab property, which I would flip and plan to return the money with specified interest rate. I may have notarized promissory note and any documents to do this legally.
However, Is it legal to take loan from individuals or group of known people to buy and rehab properties? Should I only take it from accredited investors?
@Naveen Desai Each state has laws that govern lending. Some states require that a mortgage broker be used. As to the accredited investor laws, I don't know a lot about them, but I do know it is based on the amount of the investment, etc.
From your post it seems as though you are wanting to borrow money from friends, which would be a private loan. Again, the devil is in the details. How many would be loaning the money, what is their security, etc. There too states have varying laws. Some states allow multiple people on the note, others won't.
Maybe someone with more knowledge on lending will chime in.