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re: Private Lender
Posted on 9/27/22 at 3:23 pm to TxWadingFool
Posted on 9/27/22 at 3:23 pm to TxWadingFool
Hire a good lawyer to prepare loan/lien documents and review the title policy, get a mortgage title policy on the property being used as collateral (if your loan isn't purchase money), and make sure the costs of lawyer/title policy are added to the loan amount.
IF he already owns the property and has started construction/remodeling, there is a whole bunch of stuff you have to do to make sure his subcontractors & materials vendors have been paid up, else they can have a lien against the collateral that trumps your lien.
Also make sure property taxes are current.
If he is buying property thru an LLC, make sure he personally guarantees the note as well.
Make him give you financial statements and credit report.
In other words, do everything a bank would.
Also, have your lawyer check if you plan on doing more than 1 loan like this within a 2 or 3 year period to see if you might run afoul of the mortgage broker licensing requirements.
IF he already owns the property and has started construction/remodeling, there is a whole bunch of stuff you have to do to make sure his subcontractors & materials vendors have been paid up, else they can have a lien against the collateral that trumps your lien.
Also make sure property taxes are current.
If he is buying property thru an LLC, make sure he personally guarantees the note as well.
Make him give you financial statements and credit report.
In other words, do everything a bank would.
Also, have your lawyer check if you plan on doing more than 1 loan like this within a 2 or 3 year period to see if you might run afoul of the mortgage broker licensing requirements.
This post was edited on 9/27/22 at 3:30 pm
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