All Forum Posts by: Jaspreet Baveja

@Upen Patel & @Chris Mason - Would you guys be open to discussions around this on a 1:1 basis?

Chris - I am local to the NCAL Bay Area, and would love to have a short call around this approach, and possibly leveraging your services for an upcoming deal.

Upen - I know that we have talked in the past about a deal I had in the works at that time, but, have since pivoted and would love to talk about my new approach!

No, these are not about how to become a Mortgage Broker, but, Financing related and most def Real Estate / Notes related! Thanks guys and look forward to a favorable response!

@Ron Todd - same here. Agreed 100%

Private Lending, Private Money, Private Notes- all sort of references to the same thing. Non professional lenders who are providing funds to real estate professionals as a mortgage against a property. Since these are individuals, every single lender's requirements, rates, terms, types of deals they fund, min and max loan amounts, points (if any) and risk tolerances are completely different. If you can lend against the Purchase price of a discounted property, you will usually end up close to 50% to 60% LTV, and I find that to be a safe spot. Then again, I've never yet had to foreclose, and I pray I never do, but would I know what to do with that property if I did? Yes! I've got a team that does flips in the same market, and have held rentals there before too, and those would be my exit strategies. You may add other safeguards into place as well to keep your capital safe. Just plan thoroughly and act! Best of luck!

If you can find an alternative, a medium ground, let's say 3 to 6 months terms on Private Notes, then you're not fully liquid, but that short term / duration elevates your chances of having liquidity fairly quickly if needed. Worst case, you're taking back assets you wanted anyways, and best case, you've got your cash back with some generous returns ready to go buy the assets you so desire now...  That's what my current strategy is.

@Amy Hietala - You're most welcome! If you have any questions about it or need help getting started, please do feel free to reach out. Best of luck!

@Paul Kim - I've held properties in CA before that I moved out of, and barely was break even for a couple of years, but I was in the strong belief that the market would keep going up. I was right, and was able to pull out $120k more by waiting 2 more years (tax free)! However, I didn't put that cash down towards another Primary. I rent now, and use all that equity to lend my money out to other investors for a safe and passive return. If you want to be in REI, use that $$ to invest and not dump it to take half your mortgage off. Generate cashflow... Good luck!

@Julio Velazquez - I'm not sure your original question was answered here properly. If you are an occupant/buyer of the home with Seller Financing, and the Seller then has Financing on the home, how would you make sure that the payments you're making are making their way to the Lender on the property. Right? I would think that if the Seller stops paying the Loan, the Lender will foreclose and take over the contract they have with the you (occupant-owner) instead. The monthly payments from you, whether to go through a mortgage servicer or direct to Seller, would then get redirected to the Lender once they prove they've Foreclosed on this contract. If there is a gap in between what you still owed the Seller and what the lender is owed, the Lender would have to go after the Seller directly, and cannot cloud your Title to the property.

Hope that helps and let me know if you have further questions. I lend money to sellers so that they can further Seller Finance the homes as well. Even do Refinances for Seller Financed homes with enough equity in them! Good Luck with what you decide!

If you want to focus on the Plumbing business while generating double digit passive returns on your cash, I might even suggest being a Private Lender to a successful Real Estate Professional with a proven track record in the industry! You can do as long/short of a loan with a reasonable down payment, points, and rate requirements in place. I'm not saying it's the only option, or the most lucrative, but it will help you generate passive cashflow on a monthly basis without having to be involved in the deal. If you maintain 1st position lien, have a sound legal document protecting your interest, Insurances in place and due diligence on the borrower (& the asset), you would be in a much safer position than as a LP in a syndication or just plain investing into Stocks/Bonds/Mutual Funds/ETFs etc. that are completely out of your control and not something you have any risk mitigation against. Best of luck in whatever you decide!

Hi NaDean, I would say that I definitely started with about that $ amount, have always been in 1st position lien across over 40 loans in the past 18 months and it is about 50% LTV and most times 80% LTP. A recorded Note & Mortgage, like any traditional bank loan, are the most basic, industry standard and expected levels of protection. You can have the Title Company draw them up, or have a lawyer draw it up, or if you have an experienced borrower, they may already have a template as well (have it reviewed by an independent lawyer for validity in the state you're lending in). Usuary laws are good to know, market rates, building a relationship to actually make it a Private Loan vs just a Hard Money Loan etc. You're welcome to reach out as well if you'd like to discuss further and maybe even a phone call down the road could be beneficial.

I, myself, as a Private Lender, would prefer to always lend to an entity, for exactly the reasons that @Odie Ayaga mentioned.