Lenders

Private Lenders

Do Any Of The Following Describe You:

You've been solicited for money by individuals that have found you on the public records?
You're an experienced private lender and you want some additional information to make sure you're closing your deals correctly?
You're thinking of becoming a private lender because of the high returns but you're not sure of all the risks?

If So, Read On...

As a private lender, you face an enormous challenge -- you need to obtain the highest rate of return on your money while maximizing the safety of that money. This is not easy when wading in the shark-filled waters of real estate. But with years of experience underwriting, documenting and closing private/hard money loans, I can help you meet that challenge by:

-- Acting as your trusted adviser and answering any questions you may have about private lending;
-- Assisting you with structuring and closing clean private lending deals; and
-- Exclusively representing your interests (and not those of the borrower) in your private lending deals

A Lesson From The Golf Course

A young man was golfing with an older man who had great success in life. The young man wanted to know how to replicate the older man's success, so he decided to ask. Here was the conversation:

"What do I have to do to be successful like you?" asked the younger man.
"You must make good decisions to be successful," the older man replied.
"Okay, but how do I learn to make good decisions?"
"You must get experience to be able to make good decisions," the older man offered.
"Ahhh, I see," said the young man, "then would you tell me how to get experience?"
"No problem," said the older man. "Make bad decisions."

Unfortunately, many people jump into the world of private lending lured by the high yields they offer, only to suffer through one or more unfortunate experiences, including some that result in financial loss. Having been on the front lines of private lending for years, I know the following to be true:

First, there are many good private lending opportunities, but there are just as many, if not more, bad opportunities -- either because the borrower or the property is inappropriate for a private loan.

Second, if you don't properly underwrite or document your private loans, it's not a matter of if but, rather, when you will get into a bad situation. And,

Third, once you're involved in a bad situation, it will be very difficult to get out and, if you do, it will likely be without all the money you originally put into the deal.

Here are a few ways you could unknowingly place yourself in a bad situation:

The borrower misrepresents or doesn't understand the value of the property and you inadvertently lend too much against the property;
The borrower misrepresents or doesn't understand the amount of work the property needs and then runs out of cash and the deal stalls or goes into default;

The borrower gets the wrong insurance policy and a loss occurs that isn't covered;
The borrower violates zoning laws or local building codes during the rehab of the property and the property loses significant value;
The borrower commits fraud with the specific intent of stealing your money.

And this is just a few of the many ways your money could be at risk.

Is Private Lending For Me?

Perhaps you're thinking you want to avoid private lending at all costs. In truth, private lending is not for everyone. I have, on occasion, counseled clients to stay away from private lending for various reasons. But I have many other clients that, once properly educated as to the risks and rewards, find private lending to be a great investment vehicle. After all, private loans have many benefits that other investments often don't have:

They produce high yields (ROI usually exceeds 10%).
They are secured by liens against real property and personal guarantees.
They offer predictable returns because the rate or return doesn't fluctuate as with other types of investments.
The loan amounts are usually low compared to the property value, so there's often a big equity cushion in the property.
The returns can be tax-free if structured properly.

The point of this information is not to scare you away from private lending but, rather, make it clear that private lending is serious business with serious consequences and that, if you don't take the proper precautions, you're placing your hard-earned money at unnecessary risk.

Private loans are like any other investment. You must first understand all the risks and rewards of private lending and then make a decision as to whether it’s the correct investment vehicle for you. If it is, and you properly minimize your risk, there's no reason you can't enjoy years and years of successful investing and great returns!

So how do you minimize risk and increase your chances of success?

Knowledge + Experience = Success

I have been personally involved in millions of dollars of private loan transactions, and I have spent years lending my own money as well as representing the interests of other private lenders. In that time, I've learned that most problems or losses related to private loans occur as a result of ignorance -- and by ignorance I don't mean stupidity. I only mean that the lender was not properly educated as to the risks associated with private lending and, therefore, could not make proper lending decisions.

So it only makes sense that if you want to enjoy all the benefits of private lending while minimizing your risk you need to:

1) get as much education about private lending as possible; and
2) surround yourself with professionals experienced in private lending.

How I Can Help

I can help you answer key questions like:

Will I be able to go after the borrower’s personal and marital assets if the borrower defaults?
How do I handle the construction process?
Have I properly underwritten the 4 “C’s” of each and every deal?
What constitutes “default”?
Have I properly protected myself against fraud?
Do I need to worry about any lender licensing requirements?
Does the title insurance policy protect me in the event of a title claim?
Are my loan terms legal?
What is the foreclosure process and how long will it take? What do I need to do with the property in the meantime?
Can I use an Escrow Deed?

I can also help you identify the biggest ways you could lose all your money through private lending, including the following:

---> Title & hazard insurance Issues
---> Legality of the loan
---> Identification of fraud in the transaction
---> Issues surrounding mechanic's or tax liens
---> Capacity Issues
---> Construction Issues

Benefits of My Services

Here are just a few of the benefits to using my services:

I can custom tailor a loan document set to your exact needs on each and every loan so you don't need to rely on boilerplate documents;
I can help you set up ways to participate as a partial owner of someone else's private note or even share your private notes with other private lenders;
I can review the title report, hazard insurance and/or borrower entity documents;
I lend my own money for hard money deals, so I understand the risk associated with this type of lending;
I have over 25 years experience with real estate, so you can learn from the mistakes I've seen;
I can close your loans so your money doesn't have to travel to an unknown company.

AND HERE'S THE BEST PART: Most times the borrower pays for my services at the time of loan closing. That means you get my experience and skills without having to pay for it!

Thank you for visiting my site. I hope to have the opportunity to help you with your private lending. Contact me at the number below if you should need any of my services.

Happy investing!

Jeff Shiller, Attorney