Hard Money Lending Because I Need the Security of Real Estate!

By
Mortgage and Lending with Texana Bank

Over the years I have received numerous calls from stock brokers and the like asking me to look into their latest and greatest.  My response has always been, "Truthfully, I don't invest in anything other than private hard money mortgages because that's my business, I've worked in hard money lending and real estate for the past 23 years and I understand it.  I use my Self-Directed IRA to purchase 1st Mortgage Notes and I'm not interested in putting my money into something that is not secured by a tangible asset and I require real estate."  Unless I hang up first, that's usually the end of the conversation. 

 

No one can argue that investments such as stocks, bonds, and mutual funds have lost money for investors and in some cases have lost everything through a bankruptcy or business failure, all you end up with is a worthless piece of paper.  If anything goes wrong with my investment I end up with a property that I can sell or rent out and I cannot be wiped out through a bankruptcy or business failure.

 

The mortgage Notes I purchase are funded through my Self-Directed IRA.  Most are purchase-rehab loans for investment houses and in some cases the house may already be owned by a real estate investor and they only need the rehab money.  Make sure the rehab funds are always escrowed in a fund control to be paid out in releases after inspections are made.  The Notes are written for a short term, typically 13 months, just enough time to finish the repairs and cover possible ownership seasoning requirements.  The borrower can then refinance to pay off the mortgage or sell to an end buyer who will pay off the mortgage.  

As a licensed mortgage lender our company goes through all of the usual paperwork; we take a loan application, run the borrower's credit, verify income, have the property appraised by one of our appraisers (I also personally inspect the property), close and insure the transaction through a local title company using a full set of mortgage documents, much like a conventional lender's loan file.  The most I will lend is 50% of the current appraised value so we have plenty of equity protection. 

If you need more details or have a question about hard money or private money lending and using a self-directed IRA please e-mail me at Trent@Metro-Mi.com or call my office at (248) 547-3006 or my cell phone at (248) 854-0625. 

Trent Dalrymple

Metro Mortgage Investments LLC

26789 Woodward Ave., Suite 107

Huntington Woods, MI 48070

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Tags:
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Rainmaker
693,307
Pat Champion
Coldwell Banker Camelot Realty - Mount Dora, FL
Call the "CHAMPION" for all your real estate needs

Seems like a great way for you to invest and make money-there is money to be made if you make the right investment choice.

Jan 23, 2010 02:46 AM #1
Rainer
41,307
Suzy Morris
The Morris Team - Carlsbad, CA

In my opinion, hard money lending through your self-directed IRA is a safter bet than the stock market.  With the stock market, you are dependent on other people you have never met or spoken to to turn a profit.  You are dependent on accounting agencies to verify the numbers weren't cooked up. 

Jan 23, 2010 02:47 AM #2
Rainmaker
386,800
Trent Dalrymple (248) 854-0625
Texana Bank - Bloomfield Hills, MI
Allowing Mortgage Professionals to Lend Nationwide

Pat, When dealing in Hard Money it's all about the underwriting, I'm talking about performing your own and not relying on the broker to tell you about the property and borrower.  If you don't get all the information you require then just turn down the file and find another broker.  If you know how to read a credit report, basic income information and the appraisal you'll be able to make an educated decision about the investment before you buy the Note.  This is not "rocket science".

 

Suzy, It's like I said, I know my business but I'm never too sure if the stock broker knows their's, it's usually a guess on their part and who knows what will affect the market from day to day.  Did any of us believe that one day the largest and most stable blue chip corporations would go bankrupt?  Did any of Bernie Madoff's investor's know he was running a Ponzi scheme?  Of course not, but if the investors had owned a mortgage that liened a house, the broker could be gone and you would still own a mortgage on a property that you would control.  Control over your investments is everything. 

Jan 23, 2010 04:49 AM #3
Rainer
69,156
Sue Wettstein Brazzel & Dipper Wettstein
Howard County, MD - RE/MAX 100 - Columbia MD - Columbia, MD
"Fast, Efficient, Hassle-Free Service!"

Trent,

I had never heard the term "hard money lending" before reading your post!  Thanks for the introduction.

Sue

Jan 25, 2010 10:29 AM #4
Rainmaker
386,800
Trent Dalrymple (248) 854-0625
Texana Bank - Bloomfield Hills, MI
Allowing Mortgage Professionals to Lend Nationwide

Sue,

Hard Money Lending was the original form of lending for purchasing a house, at least before the banks.  Unless the seller was willing to "take back a Note" the only way you could buy a house is to get an individual to lend you the money and they would lien the house with a mortgage... basically that's hard money.  Literally hard money just means "cash", unlike the mortgage backed paper sold by the stock brokers in derivatives, etc.  Thanks for the comment.

Jan 27, 2010 08:12 AM #5
Rainer
63,760
yanni raz
hml investments - Los Angeles, CA

Hard money loans are the best way to go for sure. I think you are doing the right thing and wish you all the best.

Great blog my friend.

Feb 06, 2012 09:33 AM #6
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Rainmaker
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Trent Dalrymple (248) 854-0625

Allowing Mortgage Professionals to Lend Nationwide
Ask about my fast lending for mortgage brokers
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