All Forum Posts by: Zachary Richards

Hi Sam. I'm a private lender so a bit on the other side of most real estate transactions but I use Sulloway & Hollis out of Concord. They have a number of attorneys with a wide range of practice areas. They have a lot of focus on real estate law, zoning, commercial finance, etc.

I've been happy with them. 

Echoing Derek's post above. I also do not have any upfront fees payable to me prior to closing. Mt title company does require a small retainer to start the title search, but my borrowers pay that directly to them. 

At closing (i.e. on the HUD) is where I charge my points and processing fee.

Anyone requiring large fees up front is very likely a scam. They will either disappear after you pay their fee, or they will realize you're willing to pay and try to nickel and dime to you see how many fees they can get, and then they will disappear right before closing. 

Great points @Chris Policicchio 

I mentioned purchasing the property in an entity because in a lot of states (where I lend in NH is one), this loan needs to be a business purpose loan to be exempt from the TILA and SAFE Act licensing requirements. A business purpose loan is one that is not for "personal, family, or household use" and taking title to the property in an entity whose business purpose is for the commercial acquisition of property will satisfy the state's banking commission that the loan is indeed for commercial use and that the lender likely doesn't need to be licensed. I don't know about Kentucky specifically but that is how we have to do it in New Hampshire. 

However, a good attorney will know how to be sure it is exempt. 

You can do whatever you both agree to. But please please have him find an attorney that knows private lending. Even though he's a family friend, things can go wrong and you could still be sued. 

He'll want a first-position lien on the property, personal guarantee, and you'll likely need to purchase the property in an entity (such as an LLC). You will also want to have insurance on the property and also pay for your lender to have a lender's title policy. These are all things a good attorney will know. For multiple projects I would do a separate loan for each property.

Typically payments are interest only, and you can agree to pay points or not. You should expect to cover all of the attorney's document prep fees as well. 

See if he'd be willing to lend to you out of a self-directed IRA, that will let him avoid paying income taxes on the interest income now.

Fantastic event, as always. Looking forward to it!

Hi @Jonathan Bombaci I'd love to attend on the 18th if there's still room!

Hey @Kam Lau. I'm a private lender (I lend my own money), and the single biggest red flag is being asked to pay any up front fees. Most reputable lenders only charge fees at the closing table. One exception is some title companies require a small deposit for them to start the title work, or perhaps an appraisal (I do not require them).

Any fees you pay up front should be payable to a third party only. 

Also see if they have references from other borrowers or have done prior deals. Some borrowers I know have their lender ditch them at the last minute, and although it's not a scam, it can cause you to have to scramble to find another lender or lose the deal. 

Great Question. (Im not a lawyer) but I formed my NH LLC myself in 5 minutes online. In fact my attorney recommended that i do it myself instead of having him do it anyway because it was so simple.

These events mentioned are all great. 

I also really like this one in Manchester, NH https://www.meetup.com/NH-Real...

Great thanks @Jeremy Wirths. Looking forward to it!