Becoming a Hard Money Lender - Posted by Dale

Posted by Chris on September 27, 2004 at 13:33:21:

Or just invest in a REIT!

Becoming a Hard Money Lender - Posted by Dale

Posted by Dale on September 20, 2004 at 17:06:03:

I have some money that I am not wanting to put back into the Stock Market right now. I was told I could use it to be a Hard Money Lender.

I understand what it is, and I really am interested, just want to know what sort of documents do I need to put in place to protect myself when I make a loan, do I file anything with the county against a property I loan on?

Are there any sample “Notes” or Contracts that I can look at or use in becoming a HML?

Thanks for any advice!


Re: Becoming a Hard Money Lender - Posted by GMann

Posted by GMann on September 20, 2004 at 22:09:15:

First off…you need to call your state’s dept. of financial institutions or who ever governs mortgages and see if you need a license. Most states don’t govern commercial loans, but if you are lending on a residential property you may need a license.

#2 If you don’t have a solid back ground in real estate and can tell what the REAL value of a property is, don’t lend any money.

#3 Find a real estate attorney that will protect your interests.

I know this sounds like a prospectus, but lending money on real estate may be illegal without a license and you may loose your investment.

By the way…Don’t listen to the people saying “Just do it as a commercial loan.” This is an unproven way to circumvent the law. If you are lending on a 1-4 unit property, you may still be have liabilities regardless if the loan was made to a business/corportation. Most state’s residential mortgage laws define residential property as 1-4 units, but don’t define what kind of borrower (person or business). Leaves too much to guess when you are lending multi-thousands of dollars.

I am not an attorney and this is not legal advice…Please seek an attorney for legal advice.