SAFE Act applies only to residential mortgage lending which I generally don't do. I've done a couple of owner financed mobile homes which is exempt from licensure requirements. Biggerpockets is a great resource for these type of legal questions. I've given plenty of business to an RE attorney who answers these questions for me.

You are probably right. I can definitely see the potential of acquiring a home and seeing that there's a mountain of rehab work to do that could make my perceived LTV incorrect. Thanks.

1. You have to do a lot of networking. Mortgage brokers and RE attorneys are going to be your main source of notes. Real estate investment clubs will be your second source. Finding some hard working flippers will keep your funds working for you as well. There is a dearth of money in my area and borrowing is really hard even if you have a decent financial situation. I only know of one other HML guy in my area. There just aren't that many that have the bankroll and know about lending as a form of investment.

2. Yes, I was the 1knl guy. I've gotten a new PC and figured it was a good time to reset everything to keep me paying attention. Sorry notes are gone, but I do remember you being a 13/10 guy.

Go to biggerpockets and do a bunch of reading. There are a lot of good threads on "Lonnie deals." If you don't know who this is, amazon for "Deals on Wheels." Florida and Texas have the best markets for mobile homes in the country. General advice is to do your homework. If you're serious, it would behoove you to get a consultation with a RE attorney in your area. It will cost you $200-$250 for an hour or so, but just tell them what you want to do and if there are any legal concerns you should have regarding financing. Maybe lease options are a better option? Maybe rent to own? Ask the RE attorney. Find out what the procedure is for repossession in all of those cases. Eviction versus foreclosure and the expenses associated with each. Good luck.

I just checked out biggerpockets-- looks like a great resource.. like the 2+2 of REI.

Paying $200 for an hour of advice seems ridiculous but could be +EV for quality advice vs meh advice and time spent doing my own research.

I'll compose a list of questions/topics to ask a RE attorney.

Thanks for the advice!

Have you ever done or looked into car title loans?

1 bad loan could wipe the profits of 10 other loans.
1 break even loan cost you 12-15% / year in opportunity cost.

Each property visit is only 10 mins.

I know because I am good friends with a large volume hard money lender and have seen first hand bad repossessions.

Any online resources you use to find borrowers?

What has been your business lending mistake thus far and what did you learn from it?

I know you are making some money on the points, but it seems that the costs of title insurance, deed filings and attorney fees would take up most of your profits on the smaller loans.

There probably are but I've never needed them. Sorry.

When you give the funds it's like any other closing. Part of the borrowers closing costs is paying for all of these fees. So, if I lend 50k and there are 5 points, typically the borrower walks away from the table with 50k - 2.5k (points) - .7 to .9k (closing costs/fees) leaving a little over 46.5k. At the end of the term, they will still owe me 50k. So, the answer is those items don't affect me.

I have always felt like this is a good way for me to make some money off of real estate since I don't know much about the building trade/ I am not handy.

I like your ideas on how to get referrals/ leads.

Thanks for the thread.

What type of ann% would you be looking for on a loan with the following characteristics:

50k for costs of REI severance project partnership in Chicago
7-10 month time frame
1 partner has done several successful severance deals, 1 partner has done 2.
70k salary, 40% TDSR, ~20k in equity in $200k property.
1st position on the property to be severed (assume $60k selling price and ~$75k market value)

Any update on how this example is coming along? Did they end up selling and paying you off or are you looking to foreclose?

Great thread, looking forward to more updates.

I am interested in learning more about hard money lending and what are the risks involved. How to get commercial hard money. I have a friend from college who runs a property company and one of the things they offer are loans to real estate investors. I have read some guidelines here https://nw-mortgage.com But it would be better if you advised me.

ugh, do you have any to lend me?

Are you familiar at all with land lease arrangements?

For instance a farmer sells his land to a group of investors, who then lease it back to the farmer. upon default I suppose the lease is terminated and deposits forfeited, and the property is sold or a new lesee found.

I cant pinpoint what companies engage in this sort of thing...though I've heard these arrangements exist.