PRIVATE LENDING BRUCE E. DINGER
investor guidelines. They also limit the number of
investment properties that can be purchased by
one company.
On a new home purchase requiring renovations,
private lender funds will be allocated to the
purchase price, renovations, carrying costs, cost to
resell and a small buffer for unexpected expenses.
PROTECT YOUR LENDERS
Mortgages offer the banks solid, long-term, fixed
Each property acquired should be put through a
returns. The PML can put themselves in the
rigorous evaluation process in order to assess the
position of the bank by directing their investment
profitability before the property is ever purchased.
capital, including retirement funds to well-secured
“lntegrity" should be an essential part of the RR’s
real estate mortgages. Mortgages have ultimate
business.
safety because if default occurs, the bank can
should be provided these documents to secure their
recover its investment as the first lien holder on the
investment capital:
Also, for the PML’s protection, the PML
property.
Promissory Note: This is the PML’s collateral for
their investment capital
Deed of Trust/Mortgage:
This is the document
that is recorded with the county clerk and recorder
to publicly secure their investment against the real
property that the RR is providing as collateral
MORTGAGE
Hazard Insurance Policy:
This is where the
private lender would be listed as the “Mortgagee” for
their protection in case of fire or natural disaster, etc.
The RR would pay for a title search as well as a title
policy on the home just as would be done in a typical
transaction. For a rental investment with a long-term
note, the RR always keep a valid hazard insurance
policy on the property to protect against causalities.