tag:blogger.com,1999:blog-7800674.post111300663941351647..comments2023-06-22T05:23:55.920-07:00Comments on Shaun's Real Estate Adventures: Creating Money From NothingShaunhttp://www.blogger.com/profile/05654897560778650994noreply@blogger.comBlogger16125tag:blogger.com,1999:blog-7800674.post-67013451754447891172007-07-04T21:11:00.000-07:002007-07-04T21:11:00.000-07:00How about if they avail of mortgage for bad credit...How about if they avail of mortgage for bad credit? They may actually have a much lower interest rate plus they can further extend their payment period and they may not even have to use their home as equity.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1140539497727893522006-02-21T09:31:00.000-07:002006-02-21T09:31:00.000-07:00When I said "money from nothing", I was referring ...When I said "money from nothing", I was referring to the loan origination fee and points. Those are fees that are basically created out of thin air. If I lend my capital to earn interest, by definition, I am originating a loan. In charging a loan origination fee therfore, I am getting paid extra for doing something I would have done anyway. Same thing with points. So rather than earn just interest on my money, as I would if it were in a bank account, I earn interest and additional income in the form of fees. But I did no additional work to get those fees - money from nothing!Shaunhttps://www.blogger.com/profile/05654897560778650994noreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1140504129209283182006-02-20T23:42:00.000-07:002006-02-20T23:42:00.000-07:00I find it interesting that you use the words money...I find it interesting that you use the words money for nothing when you used both your time and capital to create the opportunity -- something for something.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1129905389870531212005-10-21T07:36:00.000-07:002005-10-21T07:36:00.000-07:00Xtian,Not really. You could try reading the Paper ...Xtian,<BR/><BR/>Not really. You could try reading the Paper Assets forum on richdad.com. The talk there is mostly about stocks, but there occasionally is some hard money lending info. You could always ask for some info there too.Shaunhttps://www.blogger.com/profile/05654897560778650994noreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1129851010743341702005-10-20T16:30:00.000-07:002005-10-20T16:30:00.000-07:00I saw your post on richdad and I am also intereste...I saw your post on richdad and I am also interested in hard money lending.<BR/><BR/>Looks like you had a great learning experience with little risk. I am wanting to start next year and maybe loan out about 5K-7K. Right now I am trying to learn about the basics of hard money lending, required documents, etc. Do you have any good resources/websites?<BR/><BR/>Again congrats on your lending :)<BR/><BR/>TC&GB,<BR/><BR/>Xtian/STGXtianhttps://www.blogger.com/profile/09554438552797295594noreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1113862253192222342005-04-18T15:10:00.000-07:002005-04-18T15:10:00.000-07:00I can't believe people are willing to pay such hig...I can't believe people are willing to pay such high interest rates! Oh wait, I just passed 10 "PayDay Advance" shacks on the way to work. Loan shark away! =)<BR/><BR/>Jonathan@<A HREF="http://www.mymoneyblog.com" REL="nofollow">MyMoneyBlog</A>Jonathanhttps://www.blogger.com/profile/13029410257409834187noreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1113234804131361402005-04-11T08:53:00.000-07:002005-04-11T08:53:00.000-07:00I understand that by not recording the document, a...I understand that by not recording the document, another lender can get in front of me. Perhaps I am being too naive in judging the character of the lendee.<BR/><BR/>As for being cheap, in Arizona, the cost for recording up to 5 pages is $9.00. Additional pages are $1 per page. From what I can tell, the fees for the county this person lives in are around $10 - $20.Shaunhttps://www.blogger.com/profile/05654897560778650994noreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1113230873170321812005-04-11T07:47:00.000-07:002005-04-11T07:47:00.000-07:00ok, I was the first anonymous. I agree with anon2...ok, I was the first anonymous. I agree with anon2. You are not secured. Your borrower could take down a second on the property, or they could file for bankruptcy and you would be subject to a cramdown with the other unsecureds.<BR/><BR/>The reason for perfecting is to give notice to other potential lenders. A private agreement with the borrower does not do that. You would have a legal claim against them, but typically that is worthless. Also, the amount you have at risk is far too low to justify hiring a lawyer.<BR/><BR/>Not trying to overcomplicate this, and I understadn this first deal was just to get your feet wet, but this is an area of law that requires a lot of attention to detail. BTW, I really enjoy your blog.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1113215627671080932005-04-11T03:33:00.000-07:002005-04-11T03:33:00.000-07:00Shaun, without recording your lien, you run the ri...Shaun, without recording your lien, you run the risk of the Borrower going out and borrowing money from other people. If they record liens, then in a default they will be in front of you and that $100K of equity could rapidly disappear. Also, I don't beleive that recording the lien would necessarily be "cheap". Typically it is a percent of your loan amount, and thus would eat in to your return - unless you asked the Borrower to pick up those costs, which is actually typical.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1113188262532414412005-04-10T19:57:00.000-07:002005-04-10T19:57:00.000-07:00Sorry, my previous comment referred to the "loan d...Sorry, my previous comment referred to the "loan document." Technically, it's a "promissory note."Shaunhttps://www.blogger.com/profile/05654897560778650994noreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1113188092806436822005-04-10T19:54:00.000-07:002005-04-10T19:54:00.000-07:00The process of giving public notice of a security ...The process of giving public notice of a security interest in a property is called "perfection." The loan document states I "will be listed as a lender on the title of the [house] whether or not [I] elect to perfect the security interest in [the house]." So, technically I do not need to record this document. However, should the loan go into default, my first step would likely be to record this document, thus "perfecting" the security. I could then proceed with legal recourse. I could proceed without recording and my claim would be just as valid, but recording would just add an additional layer of evidence as to my position. It would be cheap insurance.Shaunhttps://www.blogger.com/profile/05654897560778650994noreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1113179733308318332005-04-10T17:35:00.000-07:002005-04-10T17:35:00.000-07:00You didn't mention recording the loan as a lien ag...You didn't mention recording the loan as a lien against the property. If it is not recorded, how is it secured by the borrower's house?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1113133874304852192005-04-10T04:51:00.000-07:002005-04-10T04:51:00.000-07:00Good Thinking on your part. I'd of done the deal a...Good Thinking on your part. I'd of done the deal as well.Sellrealest8https://www.blogger.com/profile/07064838099097077396noreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1113080401380400212005-04-09T14:00:00.000-07:002005-04-09T14:00:00.000-07:00I loan money to people from my work. I works well ...I loan money to people from my work. I works well for me. Higher interest than sitting in the bank. Had no problems collectingAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1113063854837081112005-04-09T09:24:00.000-07:002005-04-09T09:24:00.000-07:00I'd probably use my HELOC or a credit card.I'd probably use my HELOC or a credit card.Shaunhttps://www.blogger.com/profile/05654897560778650994noreply@blogger.comtag:blogger.com,1999:blog-7800674.post-1113061406115692712005-04-09T08:43:00.000-07:002005-04-09T08:43:00.000-07:00Out of curiosity, how would you have handled it if...Out of curiosity, how would you have handled it if you were in his situation?JonnyQ888https://www.blogger.com/profile/02944801712068653124noreply@blogger.com