I've been researching private money lending and I have a few questions for experienced private lenders:
1) Are you requiring title insurance, and fire and liability insurance?
2) What paperwork are investors typically providing in pitching you a deal?
3) What legal documentation is typically apart of the deal?
4) Outside of the deal itself, what other considerations relative to the investor are you taking into consideration (i.e. track record, credit, etc.) Basically, what else are you evaluating to determine if you should lend to an investor?
5) Are you establishing LLCs with your investor(s)?
@LaShae M. Good questions. You might want to join the American Association of Private Lenders. Or go to a conference sponsored by one of the organizations that does them (PitBull has one in AZ coming up next week), if you want to learn about the lending world.
We require the borrower to be an entity and the loan purpose to be for business use (i.e. flipping). We require title insurance, hazard insurance, 1st position lien, deed of trust, and obviously a Promissory Note. We have the borrower submit a loan application on our website. You can feel free to check out our website to get a sense of it all...Oakwood Lending (we do loans in NC--so things might be different in D.C.).
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