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, Deb, I can only tell you a little about some people I know, and I’m sure there’s a whole world of private lenders that I know nothing about. My example here is Lee Arnold, operating from Idaho, with a nationwide network of deal finders/brokers (who he trains) so that the deals can be vetted, and made available to his network of private lenders — for which he’s done the legal and financial background work so those private lenders don’t have to cough up the money and effort to duplicate what he’s already done.
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, This January he took on this year’s 50 new broker trainees at a cost to them of about $2,500 (plus any travel involved for a few days of live training) to keep the flow of deals growing that come in his nationwide PrivateMoneyExchange.com — where just about anyone with funds looking for a better yield can pick and choose among the hard money candidate deals his people have found. That’s far easier and less costly than doing all the legal, regulatory and financial research to set up one’s own private lending company. I’m looking at a screenshot I saved from his early January recruiting webinar where he stated that he has the nation’s only private money lending certification program. A couple of years ago he held his annual training in the Dallas area for about a thousand dollar price. This year it’s again in Dallas in mid-April, but all 50 slots should have already been filled. I learned on his January webinar that he has raised enough capital (some via Wall Street, but around $100 million total) so that his needs for incoming deal flow (called sourcing the deals) have grown significantly. As you shop around for ways and cost levels to enter the private lending business, Lee’s operation provides an interesting standard to assist your comparisons. In the meantime, anyone with funds can connect with his deal flow machine, but become a trained broker with him would have to wait until next year. Good luck in your search. –Dee
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,Deb
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, It is my understanding that in addition to the Federal laws, each state has specific laws about lending money. I suggest that you talk to a real estate attorney to get the details about the rules in your state. They could also create a document package for you.
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, The people who borrow from you would always be closing at a title company, escrow office or attorney office. You would need to send your documents to the title company for them to use for the loan. You could also talk to several title companies about getting documents and a checklist.
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, Of course each deal would be different, sometimes you’d lend for a certain interest rate, sometimes you might get a piece of the equity, etc
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, And if you are using any Roth or IRA money there are a whole set of rules that they have.
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, BE CAREFUL! I know a lot of people who have been burned by lending money to others. Even people you think you know and trust can screw you over. Be especially careful about lending money across state lines.
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, A lady in Florida lent $100,000 to a guy in Jackson Mississippi 8 years ago. She has not seen a penny in payments or any return of your money let alone any interest.
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, A lady in California lent money to a guy in Arkansas. She has not seen a penny of payments, no accounting, and no return of her money in 6 years.
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, A guy in California lent $250,000 to a different guy in Mississippi 7 years ago. No payments, no return of money.
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, I had a battle with a guy in Houston that my Roth lent money to. The property was in a trust. He changed the asset that was owned by the trust. Then sold the house without me getting paid off. The title company let it slide right through. It took me several years to get a return of my money – with no interest. (by the way, the guy is a GURU now)
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, And remember how Lonnie Scruggs got cheated out of $500,000 by a preacher in Virginia. When people throw in how they are a Christian — be super cautious.
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, I would hate to see you lose your money or get tied up in a legal battle. Maybe it would be better to invest that money in to real estate that YOU own and YOU control
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, Deb, you might also take a look at this title, just released last fall about hard money lending on residential projects:
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, http://www.amazon.com/Making-Yield-Estate-Lending-Uncovered-ebook/dp/B00NOC0MYA/ref=sr_1_1?s=books&ie=UTF8&qid=1454095495&sr=1-1&keywords=Making+the+Yield
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, The reviews are overwhelming favorable, and there’s even a Kindle edition for access in just a few minutes. (I don’t use the handheld Kindle device — I prefer using Amazon’s free software to read Kindle editions on my desktop machine (using a MUCH larger monitor) so I can take screenshots, print out selected pages (or the whole book, if it proves to be worthwhile), etc.
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, –Dee
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