Hard Money lending.. who's doing it right now??

[bigpokey]

that's only like 5 million though when you round down

 

[needtogetaas]

That's a bad scene... Stay clear. There are RARE RARE cases where a loan like that could be suitable, but 99.999999999% of the time, it's bad planning that puts a person in need of one. And if that's the case, getting a hard money loan will not fix the bad planning, and it will only put it off and make it come back shortly and much deeper and worse. I had a landlady in the 90s, who owned 30 homes outright free & clear, and she didn't manage them right. She got a divorce and kept the houses. After a couple years, she started borrowing no-qualifying (hard money) notes on them to live by, and to pay back taxes, etc. The lenders never even asked her if she took in enough rent or had whatever income to pay back. By 2004, the last one of those houses foreclosed, and as far as I know, that landlady is in a county home for the aging. That's an extreme (extremely sad) case, but it is a perfect example of what can happen when people take out hard money loans. Think about it another way: If getting a loan is a good idea, there will be banks beating down your door trying to give you one at the lowest interest possible.

I'm not just blabbing out idealistic crap here... Been there done that.

My wife and I could make a ton of money if we invested in something like that, but I didn't like it when I was on the other end, so we're not going to do that. And I don't care if someone offers me a $10 million property for $3 million cash, if I have to close it in 10 days and would need a no-qualifier loan. I won't borrow hard money even to make a potential $7 million capital gain in a couple months. If I were into that, I'd just go buy a bunch of lottery tickets or go to Las Vegas.

Charles

My friend with loans like this you have to be smart. Place your self in the opportunity to be able to seas propriety and Fixed assets, Cars tittles, bouts, Jewelery, gold, a business its self, anything of value...

Its the same concept as car titles for cash only on a much larger scale... If I was to give a loan to sa a farmer I would make sure I have clam to the farm is not paid. I would set the deal up in advance letting other investors know I have the property and I am pretty damn sure they are going to default on the loan so I would have the property sold already before I even give the loan... I would network and work to find people looking for the kind of fixed assets I would acquire if the loan was defaulted. Or have a business place already set in place if I am to gain ownership of the company...

You are completely 100% right that 99% of the time some one would sooner or later default on this kind of a loan. That is why you count on it and plan for it to happen.
These places that give oy loans for your car tittles ... They want you to not pay the loan. They would love for you not to pay the loan. They got a team waiting to come take your care and they have the care sold already... Again its the same Idea only on a much larger scale. If you know something is going to happen or there is a huge chance it will that is fucking money in the back if you plan it right...

 

[EarthRider]

not like you can take your money to the grave, have fun with it

 

[IncredibleHoss]

Haha ya. I never understood people. Ie mark zucjerberg or any guy worth shit (50 mil) + just to spread the love and enjoy life.

Steve jobs was different but worked till the day he died. I'm sure his family is set for life but wow if I was worth millions I would spend time with love ones and accomplish everything before I pass on

 

[ceo]

Haha ya. I never understood people. Ie mark zucjerberg or any guy worth shit (50 mil) + just to spread the love and enjoy life.

Steve jobs was different but worked till the day he died. I'm sure his family is set for life but wow if I was worth millions I would spend time with love ones and accomplish everything before I pass on

Not sure I understand. Are you saying Jobs did or did not spend a lot of time with his family? And how do you know? Maybe he didn't at all, then he found out he had cancer and started spending more time with them the last few years of his life.

Anyway, maybe people still have goals they want to accomplish so they keep working. We still don't know exactly how much time they are spending with loved ones.

 

[SpyWizard]

update, it's way too easy finding people/businessmen that are short on cash and need money to compete a project, what i've learned these last few months is you need an attorney that is always available to put a device (legal lien) on property or contracts, gets complicated but a needed evil..

 

[kx250rider]

As I said in the earlier post, I'd steer clear as a borrower or a lender/investor. The issue isn't so much whether or not there is a demand, or risky for the borrower or investor, or whether it's a fair or unfair practice. The fundamental issue that bothers me, is that it's poor planning which often leads to the demand for a hard money loan. If I were a building contractor who wanted to finance a huge project, I'd plan it in a way as not to need a hard money loan, just as I plan so as not to need a hard money loan for any business I am doing. What I mean is that I'd develop a good relationship with my bank, and I'd earn a great track record, keep perfect credit, and I'd know ahead when I'm ready to do something bigger. Then I'd write a prospectus, and let my banker find me the best way to safely finance my project at a fair interest and safe terms. That would take much longer, but the peace of mind is worth more to me than any amount of money. I'm far from perfect, and I could probably have tons more money if I wanted to do riskier things, but I like security, and so do investors. I guarantee that no seasoned group of businesspeople would let a partner on board who had used a hard money loan to get into whatever the business venture is. They'd wait for a partner with a record of good planning. But on the other hand, if all businesspeople felt this way, the economy would be as strong as ever, and there would be no national debt, and nobody would need health insurance, etc etc. So I concede that I'm not the typical businessman of 2012, I guess. I don't have an AMG Mercedes, and I don't belong to any country clubs, but I have no debt and I won't face foreclosure if I lose my job today! People get jealous when they find out I'm 45 and in the shape I'm in, and in an great marriage, and am not hurt by the bad economy, and I don't have a boss to answer to (other than my wife and myself). There is a reason this is the case, and it's not an accident, and it's not luck. It's planning, priorities, ethics, karma, and patience.

I have a friend who got into a really "successful" investment business in '02-'03, and he was making $2,500,000/year for a couple years, and what his group did, was get people to take out huge loans on their houses, then invest together in big ventures, and get a return of maybe 40% after borrowing the money at 10%. No fraud; totally legal. Sounds great, but then howcome he's now in a trailer park in Victorville, CA, and none of his partners or investors will speak to him anymore? Maybe he's OK with that, and maybe he plans to do it again when the opportunity arises... If it does, and if he lives long enough. Meantime I'm happy not to be frustrated in a trailer park hoping to have a chance at the next "get rich quick" opportunity.

I know how I got where I am, and I would like to see others get there too, and when I see people doing things, or thinking things, which I used to do or think at one time; which did anything BUT make me successful, I feel the need to tell them. I wasn't always in a big house ontop of a hill.... I have slept in a Toyota truck, and had to ask friends for cash to get groceries when I was in my early 20s, and that was after starting a business at 18 and running it into the ground and going broke. I've been there! And I've managed to figure out what I did wrong, and I made it back. I know what kinds of things will destroy the best intentions in business, and some tings that won't. Hard money loans, and loans of any kind for the purpose of reinvesting, are just not a smart idea for anyone; lending or borrowing, IMHO. They symbolize urgency, and urgency does not lead to security or success or wealth. It is a symptom of poor planning or impatience, in 98% of cases. That's what this and my previous post in this thread are about....

Charles

 

[wootoom]

not like you can take your money to the grave, have fun with it

Exactly

 

[eddymerckx]

I have a few clients that are hard money --or secured private equity lenders...what do you want to know?

 

[SpyWizard]

had questions earlier, but now that' i'm doing it not really an issue, i've done *in the mid/late 80's hard money real estate.. the difference now is it's to businesses only and it's all about the deal.. since im' brokering it, and i've brought 1 investor in, my risk/liability is pretty much 0