I'm curious about the process of becoming a private/hard money lender. I have a fair amount of equity in a investment property that I could use to invest but don't have the time currently to handle another property of my own. What is the process of researching becoming a lender? Thanks!
@Patrick Williams I would talk to a title company that does the documents for local hard money lenders.
@Patrick William's I agree with @Ned Carey to either use a local title company and/or attorney specializing in private and hard money lending.
A few things come to mind...you will want a promissory note collateralized against property, mortgage deed or deed of trust filed at court house which is signed and notarized, hazard insurance policy with you listed as "loss payee", and a personal guarantee from borrower.
I am curious about the types of properties you are investing in and where they are located.
I have a 3 flat not far from Berwyn located in South Lawndale/Little Village.
I will send you an colleague invite if you wish to speak further.
I use the BRRRR strategy and use private lenders for acquisitions/rehab. I use a note and mortgage to protect my investors interest. I also have been a lender as well. So I have been on both sides. There are many options to pick from; JV Agreements, LLC, note and mortgage and/or combination of them. Pm me if you need more information.
@Patrick Williams the first time through have an attorney draw up a note for you and make sure you are in 1st position on title. I have a good RE attorney if you need a referral. Essentially, you go through the same process of vetting both the property and the investor as a bank would. You might also want an appraisal on the property, or at minimum a BPO by an experienced agent so you know how much the ARV will be.
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