Equity Lender

How can I make money as a hard money lender (aka equity-based lender)?

I’m not asking about the legal or securities implications. My concern is with the economics of the transactions, where to find deals, how to avoid getting screwed, etc. Ideally, the answer will point me to a comprehensive reference on the subject. I am having a hard time sorting the wheat from the chaff, as most of my online searches seem to turn up advertisements and companies who are wanting to lend money. That is not very helpful because there is no way to tell which of those companies is trustworthy and which ones just want to take a person’s money.

I am not sure what level of investing you plan or want to do. Do you want to find the deals as well as fund the deals, you will need some type of license in the state in which you reside no matter which you decide to do.

Once you have a license simply advertise that you are now in the business of doing loans in your local paper. That will get you many inquiries of which you have to qualify them under your guidelines.

You will be required to complete the loan package, draw credit reports, secure appraisals, do all the escrow work and other necessary things to be a lender, issue approvals or disapprovals according to federal and state laws. You will also be required to prepare a set of loan docs. (There are many companies that will gladly do this for you for a small fee and a little information about the loan.)

The other way is have someone do the hard work for you and bring you the deals for your approval. This way the appraisal, credit report, escrow and other items are already in the loan package. You will have a complete loan package in your possession.

You will have to contact mortgage brokers listed in your telephone book tell them of your services. You can do this by fax, mail or telephone. I normally call, get their fax number and fax the information to them.

You can lend on 1st and 2nd mortgages or one or both. That they should send a complete package for your approval, what you are seeking in a loan package, the Loan-to-value you will lend on as well as the loan amount highest and lowest. If you charge points and other fees. You will again be required to prepare the loan docs.

If you need additional information by all means contact me.

I hope this has been of some use to you, good luck.

“FIGHT ON”

Hard money equity lenders