Nuts and Bolts of Borrowing Private Money - Posted by Gary-NJ

Posted by John B. Corey Jr. on June 16, 2007 at 09:54:57:


I can pretty much cover the topic if you send me email. It is not that
different if you have done other deals.

There are only so many ways to protect the investors.

They can co-invest with your or they can lend you the money. The loan
can be secured or unsecured. How you deal with this can impact if you
wanted to get conventional financing. If you are paying cash then you
can offer the investors a 1st lien (mortgage or trust deed depending
on your state).

You want to keep it simple and you want it clean. Better to have a
lender than a partner if you do not want to spend time explaining why
you pick the paint color as you did, etc. If you need equity then they
need to be some sort of partner or unsecured lender (at least
unsecured on the building you are buying as you could offer a lien on
something else).

Consider if you expect to offer them title insurance if the build is
securing their interest. Also determine what rate of return or how you
expect to split the profits.

Maybe there are a lot of questions but not really anything that you will
not have considered when figuring out if a deal will work for you.

Get in touch if you have more questions. Assuming you used a real
email address you will get a copy of this response by email.

John Corey

Nuts and Bolts of Borrowing Private Money - Posted by Gary-NJ

Posted by Gary-NJ on June 16, 2007 at 05:55:19:

Hi. I have never borrowed private money. I have a deal under contract where I am going to need about $35K to get this thing done. Can anyone tell me where I can learn the basics and paperwork necessary to borrow money?

I realize that there are courses devoted to this but I don’t really have time to listen to 39 audio CDs in order to find the tidbits of information I’m looking for. If anyone knows of a clear and concise book or website devoted to this I’d appreciate if you could let me know.