Got one signed, hard money question????? - Posted by Rich Hyams

import · September 13, 2003, 6:54pm

Posted by Brent_IL on September 14, 2003 at 19:36:18:

Rich,

Since you are using your lawyer as the closing agent, make out one check for the full amount payable to his law firm. He will cut the checks to the seller and the lien holders. If your guy is willing to go to $150K, I?d take it. You might need your money for overruns.

Chattel is an old French word that has been adopted by the English legal system to mean personal property that is movable. It can refer to mobile homes because they are not attached to the land, and ownership doesn?t revert to the landowner that way that improvements do. It sometimes means real estate interests that are less than fee, e.g., leases or mortgage liens. When you see it in a contract, just think of it as personal property.

If the couple of cool forms that you intend to use are adequate and you study the first one or two, you?ll be able to do much of the work yourself. When it is only you and the seller, the forms are straight forward. Someone still has to take care of title insurance. I let the title insurance companies close the simple ones where the seller is out of the picture after closing. If there is any post-sale involvement by the seller, and there usually is, or if any other players are involved, I close in the office of my attorney. It?s written into the purchase contract. It is one of those things that the more you do, the cheaper the fees get.

Regardless of who does the settlement, it is imperative that you read all of the closing documents yourself. There are times when items and clauses that were intended to be cut-and-pasted are not. Sometimes items are omitted by design. You need to be sure that the documentation reflects your true intentions. No one else can do that unless they are well trained in your methods.

Brent

import · September 13, 2003, 6:54pm

Got one signed, hard money question??? - Posted by Rich Hyams

Posted by Rich Hyams on September 13, 2003 at 18:54:36:

Paying 151k, 220k arv, small amount of work needed, 5k. I am looking to use 130k in hard money. I was talking to one of my clients/builder. He builds schools and I supply the computers and networks, we have known eachother for five or so years.

Unaware of my current efforts to get into REI, he saw the signs on my truck and said that he would buy all I could get my hands on. He would like to partner on some. I told him that I could get hard money, on jibs like this, I don’t need a money partner, hard money is much cheaper…if I get a 500k+ house, a money partner might be needed, but I am going to use hard money for deals this size.

He’s done this before, not regularly, but has done it. THis is my first, I don’t even have the experience to know what a hard money guy actually gets in terms of security? Filings? Liens?

How does that work?

I know its not a standard mortgage, but I am also sure that it liens the house.

I told him what the hard money rates I was dealing with were, over 100k, 15% and 3 points. He told me that he has 2mm cash and is looking to use it for mortgages and other REI, like hard money loans. He was pretty loaded last night when we first spoke. This morning we spoke more and he said that he would give me 12% and 2 points on anything under 150k.

I guess we are ging to use our title/lawyer guy to write up whatever we need, but what is it that we need?

Closing on the 25th, what day should we get the money and what else do we need.

By the way, the home and my business is located in Broward county, Florida…luckily missing Isabell

This time I freely and wholeheartedly admit that my inexperience is showing!!

import · September 13, 2003, 9:31pm

Re: Got one signed, hard money question??? - Posted by Brent_IL

Posted by Brent_IL on September 13, 2003 at 21:31:02:

Use his money. 12%/ 2 pts is a good HM rate and the $150K LTV is superb. The security agreement for many HM loans is the same as any other residential mortgage loan because they are a product of state law. He may want a UCC-1 filing on the chattels. There are ?high risk? loan regulations, but they apply to home equity loans or consumer loans. Given a choice by the state, lenders will want to put the property in trust to avoid judicial foreclosures.

I think you could be the major benefactor of the arrangement. Since your client has cash and access to the construction trades, I would concentrate on marketing on both sides and signing up deals, and I?d use him for every deal that I couldn?t or wouldn?t want to keep. He gets a place to park his cash, his workers have a chance to bid on side jobs, and you get paid the big bucks for putting it all together.

The ideal time to get the money is the day of closing so you only pay interest from then on. Bring a cashier’s check to settlement. Let the lawyer handle the paperwork.

import · September 14, 2003, 4:12pm

Re: Got one signed, hard money question??? - Posted by Rich Hyams

Posted by Rich Hyams on September 14, 2003 at 16:12:16:

Does it matter who the certified check is to?

I figured on getting the HM check a day or two before the closing, going to my bank and getting one check for the whole amount. I am only using 135k HM and the rest mine.

I wish I knew what a “Chattel” was.

I thought that maybe there were a couple cool forms we could sign, notarize and record and that would be it. I guess that it probably isn’t much more than that and after I see a lawyer do it a couple times, I could probably handle it.

You guys that do several jobs a year, how much of the closing and associated paperwork do you do yourself?

Or do you just basically lat a lawyer do it?