10% INTEREST ON MY MONEY

Hi Engelo,

It sounds interesting, who were they and do they have a web address?

What if the property values went down or failed to keep up with the rate of interest, so the borrower went into negative equity?

Even if you got possesion of the properties, they wouldn’t cover what your owed? Better than nothing though I spose.

My concern is they are risking your money, so how motivated are they going to be to do due-dilligence/make sure its a sound deal.

Speedy,

Excellent recap of what we do. our notes 90% of the time are 9% sometimes 10 and a few 11s… the 7 and 8's we do are on new construction that we either hold long term. Or are on properties that we are building in the Portland Or. market and standing inventory and then are sold with in 4 to 6 months. On these there is also an equity kick "not 50% of course" however makes for a yeild over 10. on a very safe solid investment. All first position loans just like any bank.

There are all sorts of brokers in the States that will broker your money like the original poster presented. Just like the turn key guys out there, YOu have to be EXTREMELY careful who you do business with. Many many millions is lost yearly with "brokers placing loans for their clients" only to have said loans go bad and the properties are not worth near what was lent on them.

Be very careful of anything that quotes 15% and up, these are the most desperate borrowers and the risk reward scenerio is very very high.

Any one can send me an e mail on this site and we can go into detail. Anyone looking to be a lender in the states I would be happy to go over some of the ground rules that you should play by and other things to look for. I am a NMLS licensed Mortgage Banker with well  over 25 years and 2,000 loans done most in the asset class that Aussies are buying in. So from the lending side and the ownership or equity side of the transaction I have been there done that in about half the states in the US.

had a nice lunch yesterday with a Bay Area client of mine who owns 200 plus houses in Dallas. he is coming to Atlanta and is going to get into our Note with equity program as he is just turning 70 and does not want to deal with the day to day of managing managers anymore. And my rates of return are as good if not better than he can do on his own with him paying all the costs. And he is a CPA by trade…… Funny guy walked him to his car  Nice 150k Astin martin and off he went.

shape,

good questions and simple answers.

1. You get an apprasial from a 3rd party independant apprasier and whats even more important is that the Broker or arranger of the loan is some one you have vetted and has impeccable credit reference's surety bond and NMLS licensed ( you can google NMLS  this is the new government licensing program you are subject to an "FBI background check credit check personal and company financial statements " before the license is issued. There were many many crooks in the mortgage industry and they created a good many of the problems with phoney loans.

2. Most lenders will only loan on a property that they would not mind owning for what they loaned on it.

3. IF company goes bust. As long as your a 1st position lender your a secured creditor and simply foreclose your position like the 2 million foreclosure that are currently going on in the states.

4. Because your a secured lender they cannot sell and get clear title without paying you off. Just like any other bank they have to be paid off when the property is sold. Now there is a scheme called SUBJECT TOO were properties are sold subject to the exisiting mortgage. In this case the beneficary of the loan will usually have an aleination clause which allows for foreclosure in the event of a change of title. So you can foreclosure just like you could for non payment.

At the end of the day lending is just as big of business in the states as buying rentals, Most folks that go the lending route just do not want to take the risk and hassle and down side of management. As been well documented on this site. especially foriegn owners that can get their clocks cleaned if they get hooked up with the wrong company thats selling low end rentals in the states.

Can you send me an e mail on this site, I have multiple web sites that explain not only our loan products however in addition our Equity participation net cash flow investments.

I think the moderators frown on posting one's web site.

Be happy to help you navigate the lending world.

Scott,

some probably think I am putting up Cr@p and others probably apprecaite the heads up to the risk's involved in lending and or residential real estate investment property in the US>

I know I have sure learned a lot.

Especially the perspective of OZ investors that are not experinced  in owning and running rentals. The US poses challenges in the low end rental markets that are akin to 3rd world countries and really probably worse because the tenants have RIGHTS……

I really do not expect to do any business with OZ investors as I have more US demand than I have product for. I see my contributions here more as charity, If I can keep one person from losing all their hard earned money following the advice of some nepherious property seller in the states and or really search's out quality folks then i think I have provided a service.

Now the topics have gotten into lending and I am dead certain I know more about lending in the states than 99% of any of the contributors on this site. Lending your private funds in the US can be very rewarding or you can completely get taken, just like getting talked into buying those choice properties in Rochester or downtown Detroit or any other war zone in any other big city in the US.

What happened in the US was the CRA rules the banks had to play by…. Its called Red Lining, IE they will not loan in certain areas. Well most of these areas tend to be minority, Black, Hispanic, etc…. Clinton really pushed for the CRA  Community reinvestment… Banks had to make a certain amount of loans in these neighborhoods Knowing full well that they were going to take loss's….

Well the loss;s happened in the form of millions of foreclosures the banks basically have given up and dumped these properties for ( as well advertised prices of cars) and the foreigners not knowing the difference and not really realizing the impact of the minority neighborhoods jumped in with both feet and their cash and have been buying them up by the thousands.

This led to all sorts of US and foriegn companies becoming US property experts…. ?For  everyone who post on this site a good experince and brags of 15% income there are 10 who got wiped out. I know this for a fact. I buy these foreclosures I know.

One can make money and we do in this asset class but its as a business we have to control both the ownership and management in house without that your going to risk losing a lot of money.

Any way… Cardinals won the world series tonight …..

Engelo just browsing back through old post. My company is completely funded by private investors.We do things a bit different. First the money is never sent to us but through a closing attorney and there escrow account,. We pay our private investors 4 points for 30 days , 8 points for 60days and 12 points for 90 days.  After 90 days we give the investor the choice to either take the property back or collect 1 % a month until it sells. It you got to our website and look at the deals every single deal is done through private lenders.

There is always risk but if the team knows what they are doing less risk.Worst case you get a property cheaper then if you were to buy it directly from a reseller like my self. We only borrow funds 3 quarters out of the year. As in the fourth quarter we don't really buy to many deals. instead clean up the company and get ready for the next year.

Alex
[email protected]
skype Alex Franks 2002 Location is Charlotte NC USA