All Forum Posts by: Beth Johnson

@Jacob Whitbeck

I'm an investor and private money lender based in Renton. My husband/business partner said the covered patio outside Hyatt Regency at Southport was open and warmed with heaters. Might be a good spot to look into. I used to hold mobile office hours there with investors at the Market Coffee Shop inside the hotel a few times a year until covid. Super convenient and large outdoor covered space which is part of the Waters Table restaurant. Would love to join up too!

@Brad Kellerman

You may want to check that your extension does not exceed the maturity of the 1st lien. If it does and there is a balloon payment penalty and/or default interest, that could squeeze your equity buffer in a hurry.

@Andres Fung Zhan

Another vote for Rental Housing Association of WA. (Full disclosure, I'm on the Board of Directors) They have state wide forms and also variations for one-off municipalities like Tacoma and Seattle with special requirements. They update their forms with every new regulation passed (which seems like way too often lately) and also have training workshops (mostly virtual now) to help educate you on how to stay compliant and other landlording topics.

As part of you annual membership, you also have access to a free Resource Desk where they can answer your questions at a moments notice. A few years ago we had a tenant in Tacoma that called an emergency plumber on a Sunday to fix a sump pump issue that wasn't super critical and then tried to charge us the full bill. It was helpful to be able to call the RHAWA resource desk to confirm we weren't liable since the tenant did not give us 24 hrs to respond.

@Sherief Elbassuoni

We do 1st and 2nd position private money loans in WA state. While we are a little lower leverage than Eastside or Veristone but we can also cross collateralize with your existing real estate to help you with less money out of pocket.

@Jon Christian

I'd can it a business purpose loan since he's borrowing for an investment property. I would also recommend a deed against the property to make it secured rather than an unsecured loan. Additionally, I would suggest having more description around the actual interest rate, when installment payments are due and if there is default interest that's incurred. It mentions a balloon payment penalty but no mention of additional interest accrued from the maturity date until he actually pays off completely.

@John Williams

Check out the American Association for Private Lenders (AAPL). They have a conference every year in Vegas that's highly informative. I run a private lending business in WA state (we only lend in our state) and facilitate loans on behalf of a large group of note investors, many who use their IRA or solo 401k including myself. If you were to set up a mortgage fund, then yes you would be subject to SEC regulations regarding solicitation. We do "whole note" investing where our investors are individually named on the Note and Deed so there is more security and autonomy with less requirements. I think you are fine to advertise but as mentioned here, you don't really need a website. Just start networking with your local real estate investor associations and social forums. Happy to help answer any questions you may have. Good luck!

@David M.

If it's business purpose and not an owner occupied property, I don't think it's subject to consumer lending guidelines. Licensing depends on the state you lend in. In WA state where I own a private lending company, you are not required to be licensed.

@Curt Bixel

I own a private lending business in WA and support/source deals for many private money investor clients such as yourself. We don't do deals outside our state but would be happy to answer any questions you might have about getting started.

A few tips to add to what others have to say:

- buy and read the book Private Money Lending by Gustavo Gomez. On Amazon and extremely informative for those getting started. We gave copies to all our clients one year as a gift

- on top of title insurance, deed, personal guaranty, etc. make sure to also get a hazard insurance policy for 125% of the loan amount too. I've had a house burn down two weeks after we lent on it late last year. Our client would have been screwed and lost principal if we haven't done that for them.

- consider a rehab hold back when working with new borrowers if you want more comfort and security in their ability to perform on time and on budget.

- make sure you understand usury and licensing requirements for your state.

That's a starter. Lmk by email if you have more questions that I could help answer.

@Matthew T.

After considerable research on the matter a few years ago when we maxed our ability to manage on spreadsheets, we went with Lendingwise. LOVE this software for the flexibility and cost - inexpensive set up and monthly costs by comparison to others like Liquid Logics and the Mortgage Office. No servicing function yet but the loan origination and CRM are pretty darn good! Can do online application via your website, auto generated term sheets and loan docs, and pipeline management. Talk to the owner Chris Fuelling for a demo. Highly recommend. Lmk if you have more questions.

Only other one I liked was Bryt Software but they couldn't do much in the way of standardized loan life cycle task management (moving loans from application to document collection and review to underwriting and escrow and in-service). Also they can't support an online application.

@Jerry Chetrancolo

The chances of a principal loss depends on a few factors that matter less about how much you need to lend and more about HOW/WHO you lend to -

- how well you evaluated the project, property and borrower. If you don't do your due diligence, you could easily miss out on the equity buffer you expected/needed for protection and be subject to a principal loss or reduced ROI.

- how high of leverage (loan to value) you go up to. A lot of people starting out do "gap funding" which is up to 100% combined LTV (1st mortgage plus your money in 2nd position) which can go downhill very fast if you don't know what you're doing or your borrowers don't know what they're doing. Stick with a very safe equity buffer, when/if you can.

- if you lend unsecured rather than placing a mortgage or deed on the property (which I could never recommend).

- if you don't a "non-recourse" loan meaning you lend to a LLC and don't get a personal guaranty so you can go after the individual(s) in case they don't perform.

Get the book Private Money Lending book on Amazon by Gustavo Gomez. It's an excellent resource for newbie private note investor.