Trent "Hard Money" Dalrymple

Our complex had an informational meeting the other night about amending our by-laws and other paperwork to keep our homeowners association FHA approved, some of the owners were actually against it. I have been speaking with a few neighbors since this came up and here was their problem (keep in mind I was furious when I started hearing this), they thought it may attract buyers that were less than desirable due to the lower down payment required by FHA and if there were any special assessments they may not be able to afford them and eventually end up in bankruptcy or foreclosure. My blood began to boil and I vented my frustration towards the people making these ridiculous assumptions with the following facts:

1. If they ever have a problem selling their homes because approved FHA buyers can't purchase in our complex they only have themselves to blame.

2. When prices continue to drop because they can't sell to "even an FHA buyer", they're also to blame.

3. Once more homes become rentals (or vacant) because they can't sell it's all down hill from there.

4. Finally, what makes them think an FHA buyer is either less desirable or lacking money?

The attorney for the management company mentioned that up until a few years ago FHA accounted for only 5% of loan activity, today it's about 50%, they will be cutting out half of their possible buyers. One of my neighbors mentioned he had purchased his home with a VA loan, no money down and he was extremely offended that anyone would consider him less-than-desirable or lacking financial stability. Several other neighbors had stories about people they knew who were buyers or sellers that didn't care about the "type" of financing, just that it was available. Needless to say this stirred up an emotional debate and luckily we never had enough votes to go any further, we will return to the issue again soon for another vote. I'm volunteering to go door-to-door to explain the facts of our FHA approval requirements and to stop the mis-information snob scare tactics, the majority of our residents are 65+. Thanks for letting me vent.

If you're looking into buying mortgage secured Hard Money Notes, or any type of Note for that matter make sure you receive as much information as possible. When buying mortgage Notes you should require all of the information a conventional lender would expect, a recent property appraisal, full loan application (1003 is best), borrowers credit report, income documentation, title insurance commitment or policy, and all of the borrower's loan documentation, ie: Note, mortgage and disclosures. Make sure you receive assignments for both the Note and the Mortgage, the later must be recorded. The more information you have the more likely you'll be able to make an educated decision.

The Hard Money investor who purchases mortgage secured Notes should always receive a file containing the information I mentioned above from the hard money lender who is selling the Note. The most important element in these privately funded loans is the property appraisal showing recently sold comparable properties. Sale prices have dropped so quickly in some markets that any comps older than six months, even 3 months will be off the mark and the true value could be half of what you are lead to believe. As I've mentioned before I won't lend more than half of the appraised value and I don't accept anyone elses appraisals, it's my appraiser or nothing. If you fund with your self-directed IRA, the IRA custodian or administrator will give you a list of necessary documents they'll need such as the Note, Mortgage and Assignments to fund the mortgage investment through the IRA.

The financial crisis has closed off much of the real estate investor's ability to borrower through conventional means, unless there is a line-of-credit in place most will have to resort to unconventional lenders such as Hard Money or private money. The rates are typically much higher in Hard Money, and there are expensive closing and funding fees to be paid but experienced investors understand they'll have to pay a premium for this form of financing. In many cases Hard Money is cheaper than taking on a partner who wants to split the profit down the middle, or more.

Trent Dalrymple

Metro Mortgage Investments LLC

26789 Woodward Ave., Suite 107

Huntington Woods, MI 48070

(248) 547-3006

www.Metro-Mi.com

Trent@Metro-Mi.com

Over the years I have received numerous calls from stock brokers and the like asking me to look into their latest and greatest. My response has always been, "Truthfully, I don't invest in anything other than private hard money mortgages because that's my business, I've worked in hard money lending and real estate for the past 23 years and I understand it. I use my Self-Directed IRA to purchase 1^st Mortgage Notes and I'm not interested in putting my money into something that is not secured by a tangible asset and I require real estate." Unless I hang up first, that's usually the end of the conversation.

No one can argue that investments such as stocks, bonds, and mutual funds have lost money for investors and in some cases have lost everything through a bankruptcy or business failure, all you end up with is a worthless piece of paper. If anything goes wrong with my investment I end up with a property that I can sell or rent out and I cannot be wiped out through a bankruptcy or business failure.

The mortgage Notes I purchase are funded through my Self-Directed IRA. Most are purchase-rehab loans for investment houses and in some cases the house may already be owned by a real estate investor and they only need the rehab money. Make sure the rehab funds are always escrowed in a fund control to be paid out in releases after inspections are made. The Notes are written for a short term, typically 13 months, just enough time to finish the repairs and cover possible ownership seasoning requirements. The borrower can then refinance to pay off the mortgage or sell to an end buyer who will pay off the mortgage.

As a licensed mortgage lender our company goes through all of the usual paperwork; we take a loan application, run the borrower's credit, verify income, have the property appraised by one of our appraisers (I also personally inspect the property), close and insure the transaction through a local title company using a full set of mortgage documents, much like a conventional lender's loan file. The most I will lend is 50% of the current appraised value so we have plenty of equity protection.

If you need more details or have a question about hard money or private money lending and using a self-directed IRA please e-mail me at Trent@Metro-Mi.com or call my office at (248) 547-3006 or my cell phone at (248) 854-0625.

Trent Dalrymple

Metro Mortgage Investments LLC

26789 Woodward Ave., Suite 107

Huntington Woods, MI 48070

An investment not mentioned often enough is Hard Money Notes, and I would suggest sticking with individual 1st Mortgage Notes secured by real estate (not a pool or fractionalized interest, I'll explain why in my next article). Many Mortgage Note investors have been real estate investors in their past lives but are now looking for a more passive real estate investment.

Purchasing the right Mortgage Note is the trick. Do you want high returns with a security feature such as an investment property? If so, then Hard Money 1st Mortgage Notes are what you should consider. You can find individual Notes as small as $15,000, $20,000 or $30,000 all the way to $100,000, $200,000 and up. Where you buy Notes and who you deal with will usually determine how stress free your investment turns out but the amount of documentation you have on the borrower and property means everything.

I suggest receiving the following information before you buy:

•1. A current appraisal for the subject property (check the comps and other details).

•2. The Note seller/lender should have personally seen the property, its interior and the neighborhood.

•3. The title policy that insures you have 1st position, avoid 2nd mortgage Notes.

•4. A recent credit report on the borrower ...do you really want be involved with this borrower?

•5. Income documentation to prove your borrower has enough income to make the monthly payments.

The best you can do is put all of this together and weigh the positives against the negatives but the appraisal is the most important component in my view. Let's face it, if the credit crisis and the sub-prime meltdown are not a perfect example of what not to do, I don't know what is. Don't lend too much, with too little equity protection, without good credit and no proof of income, it's as simple as that. You can find short term Notes in 1st position that generate over 12% yearly returns and more. These days you shouldn't be higher than 50% loan to value, not now anyway. If the borrower fails to pay on the loan, you will have to foreclose. If they let the insurance and/or taxes lapse you'll have to pay those expenses to protect your investment and if you lend through your Self-Directed IRA, all costs must be paid through your IRA. In the end, the worst situation would be that you or your IRA now own a property that you can rent out or sell. If you do your homework, 1st Mortgage Notes can be a lucrative investment to add to your self-directed IRA or your personal investment portfolio.

Trent Dalrymple, Metro Mortgage Investments LLC - Hard Money Lending for Detroit Real Estate Investors

www.HardMoneyMi.com

Office: (248) 547-3006

Cell: (248) 854-0625

Diversify your portfolio with a Secured Local Investment - Hard Money 1st Mortgage Note, $65,000 bridge loan for a real estate investor (prior client), 13 month term, 50% LTV, 15.9% rate! Please consider these details:

Here's the information on our latest 1st Mortgage Note. The loan amount is $65,000, the house appraised for $130,000 after-repaired-value, that's 50% LTV. Due to the lack of available lenders real estate investors are willing to pay higher rates, the rate to the Note buyer is 15.9% ($861.25 a month), term is 13 months and 3 points ($1,950) are paid back to you when funded. Servicing management is provided at no extra cost, we stay in the middle to make sure everything continues smoothly during the life of the loan.

I have worked with this borrower in the past with an excellent track record. The borrower has been a field tech for the past 7 years for a telecom company as well as a real estate investor, his middle credit score is 667. Borrower is buying this house as an investment property for $73,500 and will bring in about $42,000 to close. The house needs about $25,000 in repairs (drywall repairs, paint, floor coverings, new windows, repair plumbing, gutters and a new garage door) to be held in fund control and released after inspections.

This house was built in 1970, it's brick, 2 story, full basement, 4 bedrooms, 2.5 baths, 2,824 sq. ft., and 2 car attached garage located in a nice area of Southfield, Michigan. The new appraisal is available, just call if you're interested. Perfect for your Self-Directed IRA.

Any questions please give me a call or send me an e-mail.

Trent Dalrymple
Director, Investor Relations

Metro Mortgage Investments LLC
26789 Woodward Avenue
Suite 107
Huntington Woods, MI 48070-1334

Office: (248) 547-3006
Toll Free: (877) 854-0602
Cell: (248) 854-0625
Fax: (248) 547-2107
www.Metro-Mi.com