Forums / Getting Technical / Finance / If I have money to lend how do I find borrowers

1-Day Millionaire Mastermind Workshop - Only LIVE Training in 2019!
Viewing 20 posts - 1 through 20 (of 38 total)
  • Ben
    Participant
    @benjohnson
    Join Date: 2018
    Post Count: 3

    A fool and his money are soon parted so in light of that maybe a strange question but I have some money to lend and want an advice on how to find a borrower.
    I have done private lending before on a first mortgage basis at 10-12% p/a so fully aware of how it works and use solicitors who specialize in private mortgage documents preparation and management.

    There are a lot of courses on how developers can find private funders but not many on how private funders can find decent projects to back.

    Any thoughts on the subject would be appreciated.

    Profile photo of Arman_SArman_S
    Participant
    @armans
    Join Date: 2019
    Post Count: 0

    There are platforms which allow you to connect with borrowers. I know of https://alternativedebt.com.au/lender/ although I am not affiliated with them.

    Also RateSetter if you’re looking for unsecured or a smaller sum.

    Arman_S | Lending Clinic
    http://www.lendingclinic.com.au
    Email Me | Phone Me

    My comments are general in nature and are not to be taken as advice.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    Have you got a credit licence?

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Ben
    Participant
    @benjohnson
    Join Date: 2018
    Post Count: 3

    No, I don’t have the credit license
    Also, to answer previous comment RateSetter is a bit of a joke. Unsecured lending at 3% p/a is the same as you would get at the bank. What I am looking for is first and second mortgages where loan is in my name.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    You will need to get a credit licence and once you have that you can start to advertise, approach brokers, etc

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    You will need to get a credit licence and once you have that you can start to advertise, approach brokers, etc

    Only if you offer Coded loans over 62 days.

    We run a Private Mortgage Fund with over 300M FUM now and there are certainly plenty of deals out there.

    Helps of course being on a couple of Aggregators panel though.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Arman_SArman_S
    Participant
    @armans
    Join Date: 2019
    Post Count: 0

    Only if you offer Coded loans over 62 days.

    Out of interest, can you extend the loan / refinance it into a new loan of another 62 days, without ACL?

    Arman_S | Lending Clinic
    http://www.lendingclinic.com.au
    Email Me | Phone Me

    My comments are general in nature and are not to be taken as advice.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    Yes although only under certain restrictions within NCCP.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    Good point Richard. Get around it by just not lending to natural persons buying resi property.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Ben
    Participant
    @benjohnson
    Join Date: 2018
    Post Count: 3

    I am invested in the Richard’s fund so can vouch for him. I think he has set up a very clever scheme where loans are advanced to multiple borrowers and not for development purposes. 3-6 month loans at 17% interest in my opinion are safer than first mortgages for 12 or more months advanced for construction at 10-12%. So well done Richard. My only “dissatisfaction” with his fund is that the rate to investors is fairly low, that’s why I would prefer to invest directly in the similar pool of mortgages as his fund. I understand that it requires experience but you can’t get experience by just sitting and doing nothing so it makes sense to start small with less return lower lvr etc. and learn as I go.
    Any thoughts on how to start?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    Hi Ben

    When you consider that the compliance costs of a Retail Mortgage Fund are well over a $1M per annum I don’t think the rate we offer our investors is too low at all.

    Whilst you don’t need a Credit License to do a Non-Coded loan going forward you may well need to register with APRA. We were forced to register with them last year and of course that it itself does not come cheap.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of StevenSteven
    Participant
    @steven1982
    Join Date: 2017
    Post Count: 155

    Only if you offer Coded loans over 62 days.

    What if you just want to Angel invest someone?

    Eg: you have 50K sitting in bank doing nothing. You have a friend who wants to do a flip and need some renovation money. You and you friend agree (both get lawyers to write up loan documents) to lend you 50K for 3 – 4 months and you friend will return 50K + 10% interest and the end of 3 – 4 months.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    Breach of NCCP if the loan is for personal purposes.

    Heavy fines for doing so without an ACL.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of StevenSteven
    Participant
    @steven1982
    Join Date: 2017
    Post Count: 155

    Breach of NCCP if the loan is for personal purposes.

    Heavy fines for doing so without an ACL.

    Cheers

    Yours in Finance

    Are you able to elaborate a bit more? A bit confused here. It sounded almost like it is illegal for someone to lend money to a friend and expect the money to be returned in the future?

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    Yes it is illegal to provide credit to anyone (To an individual for personal purposes) without holding an Australian Credit License or being a Credit Representive of an ACL Holder)

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of StevenSteven
    Participant
    @steven1982
    Join Date: 2017
    Post Count: 155

    Yes it is illegal to provide credit to anyone (To an individual for personal purposes) without holding an Australian Credit License or being a Credit Representive of an ACL Holder)

    Cheers

    Yours in Finance

    Well… that kind of sucks, and I have difficulty understanding the logic behind such laws. It is almost like saying “individual people are not allowed to help each other when it involves money”, and the law appears to setup in such a way that makes it purposely difficult for people to lend each other a hand.

    A typical scenario could be, I need some money to do some work, and my parents are willing to lend me a hand.

    Parents being parents, they will of course either charge me no interest, or if they have to, charge me very low interest compare to the kind of interest banks would charge. So naturally I’d be more inclined to receive help from my parents rather than banks.

    So in this case, then, how can my parents help me in this regard going by the legal path?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    Yes it is illegal to provide credit to anyone (To an individual for personal purposes) without holding an Australian Credit License or being a Credit Representive of an ACL Holder)

    Cheers

    Yours in Finance

    I don’t think this is the case Richard, (and you have contradicted your earlier statement about loans less than 62 days).
    Can you cite any legislation

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 11,992

    Terry, under NCCP a loan under 62 days in term is not classified as a coded loan irrespective of the purpose.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    a person not lending as a business wouldn’t be a coded loan either.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Ben
    Participant
    @benjohnson
    Join Date: 2018
    Post Count: 3

    I think Richard is wrong, as mentioned above, to be caught under the NCCP you need to be in the business of making loans. For example, if you have sold your property with vendor finance you don’t need a license for a one off event. Similarly, for a one off money lending to help your friends with finance you don’t need to be licensed. Once you start lending to ordinary folks you then deemed to be in the business of money lending and thus need to be licensed.

Viewing 20 posts - 1 through 20 (of 38 total)

You must be logged in to reply to this topic.