I want to lend money to investor for 6,12,18 or 24 months (collateral are properties) what APR should I ask 4?

Question

I want to lend money to investor for 6,12,18 or 24 months (collateral are properties) what APR should I ask 4?

Answer 1

Prime plus 200 basis points

Answer 2

You want to be a bank?

It depends on the risk of the borrower and the property. Have you by chance been watching the news over the last year or so. Banks are losing billions each quarter from real estate lending. Why would you want to be a lender?  

If I was nuts and decided to be a lender, I would prob charge a rate relative to the credit risk, specific property, and make sure that the person has CLEAR TITLE to the property.

If the investor does not have clear title, you prob won't get diddle if he defaults. (Hint. The bank that has the mortgage on the property owns the house until it is fully paid off).

I'd be doing more homework than just asking what rate to charge. Get a real estate attorney to help you with this.

PS 200 basis points is 2.00%. I was thinking of 5-10% over prime for the higher risk. If he could get the money from a bank, he would do that at a lower rate assuming he qualifies. He can't (hence, here you are as a lender), and that should tell you the credit risk you would be looking at.

Answer 3

Make sure the properties are legally his/hers and you're not being scammed out of your money. He could walk off with your money and leave you with a bunch of worthless paper.

Ask for as much as the law in your state will allow you to charge. You could easily get into trouble with the law if you make a wrong move. I wouldn't do this without consulting a lawyer. Especially where properties are involved!