YOU could end up owning the house, so you need to protect yourself on all levels.
Thank you so much for your replies. A bit more
The moment you accept money from an investor you have a duty to perform and to opearte prudently.
65% LTV is fine, but is that 2015 Air Max White
ALL rehab projects are different, some very complicated and some easy. If you have not done this type of investing before, I would pass until I knew more.
They are charging the borrower 11% and that it? No points?
You sound like a very green investor and I would suggest likely too green. (well that and you said you were new) Perhaps spend some time with the broker on a deal or two and learn a bit more about the industry and read through BP to get a better understanding of your role and your rights and responsibilities when you invest in a loan.
Capital is hard to come by most of the time, you hold all the cards, the broker right now and the buyer need you more than you need them.
Hello, On the surface this sounds like a good deal. (depending on how much rehab has to be done)
The other point here, for being a short sale with minimal repairs 12 months is a long time. There is an undertone of lack of confidence in ability to exit this property which is an issue. Loc said the prevailing term in California is 6 months and the broker wants to issue 12. Remember just because you can convey title to the property for 90 days does not mean you can not market the property. A buyer should be lined up in 90 days if the borrower knows what he is doing. That is plenty of time to gain sufficient market exposure to garner decently high percentage of value.
your own. That is how investors decide when and in what to invest. Air Max Tavas Grey Junior Assuming even the broker has the best intentions in the world you still have a duty to yourself to learn how to do some due diligence.
I would tell you pass on the deal. To be honest, the fact that you came here to ask if you should make the loan means you should not. You need to learn a bit more, IMO, no offense. Spend some time with the broker to understand how he underwrites the deal (if at all). Speak with other investors and use BP to come back and ask questions when as needed.
That changes at the closing table when that duty has been fulfilled. When that note is signed the broker has a fudicary responsibility to the investor, to do those things to safeguard that investment. I don know of any broker that would tell an investor, lend me or invest with me and I lose your money for you.
of the ARV? How happy are you with their due diligence in knowing that property will be worth X (and therefore your loan will be nice and safe at 65%)?
those flips have been funded by that broker. The loan would be the only lien; however the loan would be made by 3 investors; including myself. According to the broker :" i choose to write the loan for 12 months. If I write the loan for 6 months, and if it takes alittle longer than 6 months to close a resale, then I might have an expired loan on my books."
It broker beware! They are exposed to liability from both sides.
That like saying a bank has no duty to depositors and has a duty to the guy who doesn pay his car payment on time because he is their client.
The broker is brokering you the loan. You still need to do a bit of due diligence on Air Max Tavas Size 5
I hope this thread gives you some tough questions to run yourself and the deal through to make a good decision.
These questions are only part of a list I would want to know the answers to prior to putting my money out.
Good luck with whatever you decide. The details were not provided in the thread. If you have $100k to invest, then the property value would be assumed to be $153k. It looks like you live in California and for that state that is a low value so perhaps a not so nice property.
One thing no one has mentioned is are you the ONLY investor for this product? What does the rehab list of repairs look like? Who did the inspection on the property for this list? Do you have written bids and cost projections?
There is one thing I can tell you, this is not the only deal out there now or into the future you have time to approach this with a better set of tools and knowledge than you have today.
You are not the only investor the broker is putting into the loan and the property value is higher.
Information. The broker chargers the borrower 3 points for the loan. The borrower has done many flips; but 5 of Nike Air Max Thea Womens Beige
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