PLP-022 – Lessons Learned

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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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713 Houston Area Real Estate Networking

Hosted by Landon Rothstein & Ray Sasser

About the author, Keith Baker

My ultimate goal is to create an economy for Real Estate (and other) Investors where banks are no longer needed. An economy where every day people look to each other for leverage and support. During the day I am an insurance adjuster for the oil field, where I handle millions of dollars of other people's money (OPM), and by night I invest in Real Estate and host this podcast. I hope you have an excellent experience and find real value within this website and the Private Lender Podcast. Please leave comments or submit your questions on the Contact Page.

I wish you prosperous, safe and happy lending and investing!

Thanks for listening

-k

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