Different Types of Investment Property Loans – Cโ˜•ffee with Carl EP-1 ๐Ÿ‘‰(NEW Series)๐Ÿ‘ˆ


(upbeat music) Hello and welcome to Coffee with Carl. This is our first episode so the intent of the Coffee with Carl is to bring up some basic issues that we hear a lot of questions about frequently asked questions and some of the more simple things that come across in everyday life for us as attorneys at Anderson. I’m Carl Zoellner, I’m one of the attorneys
with Anderson Advisers many of you may know me from the classes where I’ve answered
your platinum questions for those of you who are clients and those of you that are considering becoming clients I encourage you to give us a call and we’re always happy to have that free initial consult. As you can probably guess our subject of today is going to be loans. Want to go through some of the basics with loans today as well as talk about some of the different versions of loans that are out there, number one is when we
are dealing with loans, and it’s loans to an outside party or not from say yourself to your business, we want those to be secured loans. So inside your business there’s some wiggle room simply because you are on both
sides of the transaction but outside we definitely want those loans to be secured and secured just means you are taking back collateral in order to have a security in that loan. So let’s talk about the two pieces of a loan first. First and foremost we have the promissory note, promissory note dictates
the terms of loan. So this talks about or this refers to say the total amount of the loan, what the interest rate is, when it’s due, in those terms they basically give the guidelines or paint the corners if you will of what this loan entails and what the person
who’s lending the money expects to see back. There’s lots of little
different intricacies within loans themselves, I’ll touch on a few of them towards the end here but that’s our first piece and it’s gonna be the promissory note. Second piece we’re gonna look at is what we call the security. So this is what makes it a secured loan. So if I’m trying to secure a loan and I’m lending to somebody who’s doing a real estate deal I’m securing that loan by putting a lien on the property in which I’m lending the money on. So and normally that lien is either referred to as a deed of trust or mortgage and depending on what state most states at this point, almost all of ’em, recognize deeds of trust you’re gonna be most familiar with this but some states are still
mortgage only states. Function the same way they are both liens, they both show up on title if somebody would run a title search, and it basically helps you to ensure or give you additional guarantees that you’ll be paid out when that property sells so we want to secure our loans. Now there’s another type of lien you can put on or for collateral if say you’re lending to a doctor even a contractor that has valuable equipment in this case we would use something called a UCC 1. UCC is just short for
uniform commercial code and it’s in section 1 of that code. Basically what it does is it functions almost the same way as a deed of trust or mortgage against real estate except it’s against equipment instead of real estate. So from a legal terminology we’re talking real property versus personal property. Equipment being personal property, real property being real estate. So it’s important that we have those two pieces so we’re secured in that loan so that if that property sells we know we are getting paid on it and hopefully no hiccups occur from there. Now I also told you I
would touch on a couple of different kinds or
some intricacies involved with loans there’s a few different kinds of promissory notes out
there that are actually pretty neat tools that you can use in different scenarios. So you still do the security interest but there’s also things called say a participating note, meaning that you can take a percentage of the profit in the project versus say getting an interest rate so maybe I would have
lent a hundred thousand dollars at 6% well maybe
it makes more sense if I wanted to actually get a percentage of the profit since I’m loaning that amount of money that I say I want a 50% return or 50% of the profits on the amount I’ve loaned for the amount I’ve loaned to this project. So instead of saying I just want a 6% interest rate I say I want 50% of the proceeds of the project. Cool tool there. There’s also something
called a convertible note. Where I can put money in or loan money to somebody but I have the option at a future point to convert my profit interest or my
interest in that project from debt meaning the loan, to equity meaning ownership. There’s lots of tools out there that are available we
actually have a lot of ’em on our platinum portal
in our forum section for our clients to utilize and ask about and we’re always happy to answer questions for clients if you are considering becoming a client I would encourage you we
do a free consultation you can ask your questions and we can get you all set up with what you need. We also put out a ton of free content, Toby, Clint and Michael the partners of Anderson tend to put out a lot of advanced material. This is more my space, I like having coffee with yall taking up a short video and asking some of those frequently asked questions. So I think my time is
up on this short video, it’s been a pleasure
talking with you today I look forward to catching you on the next episode. Come see me again with Coffee with Carl. Bye. (upbeat music)

One comment on “Different Types of Investment Property Loans – Cโ˜•ffee with Carl EP-1 ๐Ÿ‘‰(NEW Series)๐Ÿ‘ˆ”

  1. Sarah Jane Mc Carthy says:

    Hi Carl i deposited a deed of trust in the US not so long ago and would like to get an interest free loan, how should i best go about this? Thanks

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