Hello,
I am an experienced Real Estate Investor/REALTOR(R) in NC. I have a rental property in SC (free and clear) that I am looking for a 1-1.5 year loan on with it being collateral. I am willing to pay 15% Interest Only. The property is rented for $550/month, Managment in Place, $700 for taxes, $450/year for Ins.
I am expanding by business which is the reason for the loan.
Any suggestions on where to look for this type of scenario?
EHUNT
altered due to rules violation
Hi,
This is probable something better to advertise local to the location of your property in South Carolina!
I would put a bunch of small ads in any free publication where someone with $35k sitting in a local bank could potentially see it and would be in position to call then drive by and see the property for collateral! I would probable advertise “North Carolina Real Estate Agent seeking Loan as 1st Trust Deed against local South Carolina Home in beautiful community to expand a family business and home is currently paid off and mortgage free!” with your phone number and let potential lenders call you directly!
I think if you can get a private party to make the loan you could do a 10 year amortization at say 9% due and payable in 3 years! Make sure you give yourself extra time in your loan so that you have some leway in how and when you pay it just in case something happened that caused you to not be able to pay it in 1 to 1.5 years!
With an amortized payment you will pay down the loan amount with current rents which will reduce your balloon amount at the time of payment, it reduces principle by roughly 8.5% per year in the first, second and third year!
If you pay 15% interest only it’s a nice rate but much better than most reasonable people looking for better than savings returns would require to make this loan secured by real estate. Make sure you change your property insurance to cover the new mortgage!
GR
GR,
Thank you for the input. Do you know of any SEC rules I may violate if I used your suggestion? I kind of remember in a Private Lender course I had that I may have to register with the SEC to do something like that.
I will check into that now!
EHUNT
Hi,
You do not violate any securities laws as your looking for a loan for a real property to be secured by a 1st mortgage lien!
No, you do not need to register it as a securities as it is not a securities!
A securities is marketing to sell multiple stock shares of a corporation normally unsecured or multiple unit’s (Fractional ownership) of a Limited Liability Company normally unsecured!
A mortgage secured by real property is not a securities!
GR
Hi,
How much cash were you looking to use funding the business expansion? how does that figure compare with your rental property’s value?