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January 23, 2014
Guest article by Fern C. Burr:
For more than 20 years, I have worked as a Realtor, a mortgage lender and broker, and a real estate investor. My reason for success is this – I always try to maximize my profits in a way that is as safe, secure, and as careful as possible. Now, however, I spend a lot of my time teaching other people how to be successful real estate investors.
While I still tinker in the stock market, I prefer investing in real estate. I was introduced to the concept of a self-directed IRA 10 years ago, the same time that NuView opened their office in Lake Mary, and I have been a client ever since. I am always happy to spread the word about self-direction and what a useful tool it has been for me and for many of my clients.
People think of a mortgage broker as someone who originates institutional mortgages for primary residences and for buy-and-hold rental properties. These types of mortgages are referred to as Conventional and FHA loans. While we do originate those products, we are also known in the real estate investor community as THE place to go for private money. These private funds often come from people who use their self-directed IRAs to invest in mortgages secured by real estate, in essence these people lend money from their IRA to the borrower.
Why do people need private money? Sometimes the property needs work or it won’t qualify for Conventional financing; other times, private money satisfies “the need for speed.” Recently, I got a call from a buyer on a Monday telling me his offer on a property was accepted. It was a great deal, but it had to close on Friday. Because the buyer got us everything we needed quickly, and because of the great relationship we have with the owner of the IRA and the excellent work relationship we have with the staff at NuView, we were able to close that loan in less than one week.
We treat our loan applications for private mortgages the same way we treat a loan application for an institutional mortgage: We get information on income, liquid assets, and a full tri-merge credit report. We also always get an appraisal on the property. The name of the game is Due Diligence. We want to love the borrower and love the property. Every borrower has to have some “skin in the game.” We gather all this information, then the lender just has to make a “common sense” decision.
Fern is a State of Florida Licensed Loan Originator/Mortgage Broker and Owner of Mortgage Professionals of Central Florida, and she is also a State of Florida Licensed Real Estate Broker. You can reach her at Fern@cfl.rr.com or 407-330-2855.