Listen to this episode
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Mistakes that I made (and lived to tell):
- I used the title company’s attorney to draft the loan documents (Deed of Trust and Promissory Note) – Lesson: use YOUR own attorney who drafts the docs for you
- I wasn’t a stickler for payment on time (didn’t charge penalties) which told the borrower it was OK to pay late
- I trusted the borrower’s assessment of the property’s value rather than looking just a little deeper myself
Things to take away:
- Always get a copy of the Driver’s License and Social Card from ALL borrowers, members of an LLC, INC, LLP, etc.
- THIS WILL ANGER LANDLORDS, but I prefer to discount rental properties when determining the Loan To Value I’m willing to accept on a property.
- Don’t be afraid to exercise your rights to foreclose if a borrower doesn’t perform as agreed
- Remember, its your money. You should only loan money on deals that make sense to you, and that make you comfortable. If you’re comfortable, ask somebody for help (second set of eyes) or walk away
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