Does anyone do loans against real property?

jonsi

legendary

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Quote from: ?? on ??

I think that investing in property is always a good idea.
...

This has nothing to do with investing in property. This is about loans (in crypto) and collateral and they don't match.
The volatility of crypto makes it impossible to use property as collateral as it can't be sold quicly enought. If the borrower defaults, then the loaner is left with the property and if the value of crypto spiked, then the loaner will get way less in term of crypto back. If the value of the crypto has droped, then the borrower will pay much less to return the loan and the loaner will get less in terms of fiat value.

As you can see, this trade is only beneficial to the borrower so for this reason, you will not find someone to lend you crypto based on property collateral.

TheCryptoMafia

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Common aim is stronger than blood

Quote from: Bajula on March 21, 2018, 04:45:21 PM

I have a small house (free and clear) a little over 20k (1100 sq ft 3 bed 1 bath - just way out in the country in a low population county which is why the low value - last time someone sold a house near here the banks computer model valued the house at just under 60k, and I should have gotten a heloc then, but.. I waited so now computer modelling doesn't value the house at all since no sales in the area for a while so the value is listed as what the tax rolls count it as) which is too small for banks to even look at - looking for something equivalent to a bridge loan, or heloc. looking to get a 14k loan - have a renter waiting to move in, but it needs a little work before that. The fixing up will also bring the value up enough to get a regular bank loan on it, I would like the loan to be at least a year primarily because nothing ever goes right when you are remodelling - it should take quite a bit less time than that, but... just in case right?

Not even sure if anyone would be interested in this, but pm me if you are.

I would consider it, if your property was in the UAE.

Quickseller

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Quote from: Bajula on March 21, 2018, 06:24:25 PM

Also never thought of the paperwork issues dealing with after the loan is paid off. Like bob gets his money and just forgets to remove the lein, me thinking the lein is gone go to sell the property later (or go to the bank to get regular heloc or mortgage and they are like "hey what's this?!?!) So yeah I can see some issues here,

It could be more complex than the lender not releasing the lien (this would be a fairly simple thing to fix), there may be issues if there is a discrepancy in the legal description, there may be issues with referenced recording information, if there are any issues with the release of the lien and the lender died before the issue is resolved, there may be additional steps needed to be done in probate court.

Quote from: Bajula on March 21, 2018, 06:24:25 PM

was worth looking into though.

You are able to keep this thread open for as long as you wish if you want to.

As mentioned previously, I would advise both you and a potential lender from pursuing this for the reasons posted above, unless you are confident the lender knows what they are doing, and are experienced with these types of loans.

I am not sure what bank(s) you have applied with, nor what county you are located in, however you might want to inquire with smaller lenders who might be more willing to make the kind of loan you are seeking.

Bajula

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Quote from: Quickseller on March 21, 2018, 06:09:56 PM

A handful of people have asked for these types of loans in the past, however to my knowledge, no one has funded this type of loan on the forum.

In addition to the issue you mention that the value of the property needs to be documented, and higher than the amount of the loan, someone making this type of loan will need to ensure the paperwork is done properly (such as having specific terms in the security instrument, and properly recording the security instrument, among many other things). A lender who does not handle the paperwork properly, in accordance with local law, the lender could potentially find himself with an unsecured loan, and even if the loan is paid off in a timely mannor, the lender not knowing what he is doing paperwor-wise could potentially cause you (the borrower) to have title issues down the road, that can be expensive to clean up.

I see, I figured a lein would be easier, never thought about jurisdictional issues though. Texas is pretty good to lenders, so maybe I get lucky and someone "relatively" local feels like going in on this. Also never thought of the paperwork issues dealing with after the loan is paid off. Like bob gets his money and just forgets to remove the lein, me thinking the lein is gone go to sell the property later (or go to the bank to get regular heloc or mortgage and they are like "hey what's this?!?!) So yeah I can see some issues here, was worth looking into though. Sucks when you have assets siting around that could be bringing in income but due to silly circumstances (banks don't like tiny loans on homes for instance) you can't do anything with.. drives me crazy.

Quickseller

copper member

Activity: 2996

Merit: 2374

A handful of people have asked for these types of loans in the past, however to my knowledge, no one has funded this type of loan on the forum.

In addition to the issue you mention that the value of the property needs to be documented, and higher than the amount of the loan, someone making this type of loan will need to ensure the paperwork is done properly (such as having specific terms in the security instrument, and properly recording the security instrument, among many other things). A lender who does not handle the paperwork properly, in accordance with local law, the lender could potentially find himself with an unsecured loan, and even if the loan is paid off in a timely mannor, the lender not knowing what he is doing paperwor-wise could potentially cause you (the borrower) to have title issues down the road, that can be expensive to clean up.

Bajula

member

Activity: 166

Merit: 16

I have a small house (free and clear) a little over 20k (1100 sq ft 3 bed 1 bath - just way out in the country in a low population county which is why the low value - last time someone sold a house near here the banks computer model valued the house at just under 60k, and I should have gotten a heloc then, but.. I waited so now computer modelling doesn't value the house at all since no sales in the area for a while so the value is listed as what the tax rolls count it as) which is too small for banks to even look at - looking for something equivalent to a bridge loan, or heloc. looking to get a 14k loan - have a renter waiting to move in, but it needs a little work before that. The fixing up will also bring the value up enough to get a regular bank loan on it, I would like the loan to be at least a year primarily because nothing ever goes right when you are remodelling - it should take quite a bit less time than that, but... just in case right?

Not even sure if anyone would be interested in this, but pm me if you are.

Topic: Does anyone do loans against real property? (Read 372 times)