2 C’s and 3 Q’s To Polish Off EVERY Private Lender Deal You Close

FridayToday, it’s all about the warm and fuzzy… and believe it or not, the paperwork needed to finalize your private money deal can really leave your lender with those feelings – feeling welcomed, confident and appreciated.

In short, you’re going to kill ‘em (figuratively and in a super awesome way, of course) with kindness… and professionalism.

In my last post we talked about what to do when your lender agrees to fund your deal (high five), and we discussed how to best define and confirm the details of your private lender loan.

So, with all that good info, in the here and now, we’ll chat about the paperwork process that includes the strategic 2 C’s and 3 Q’s.

Make the calls: your 2 c’s to success

Your lender said ‘Yes,’ your deal details are in place, and now it’s time to get your investor’s paperwork in order.

It’s a dreaded necessary evil, right? Naaah. Let’s be glass half full here, friends, shall we? The paper process can be simple and seamless with these 2 steps:

1-Call your attorney and title company to inform them of the deal details including the investor’s information and how the investment loan is structured. Ask that the promissory note and mortgage/deed of trust be prepared for your investor, which are standard documents. Be sure to ask if your state uses mortgages or deeds of trust. Every state is different, and truth be told, you’re not the only one scratching your head. So when in doubt, just ask.

If you’re one of those people who sweat when you hear the word “attorney,” you’ve got to get over it. And I say that with love. Don’t be afraid to spend a few hundred dollars to ensure the required documents are drawn up accurately. So, don’t think big bucks when you hear “attorney,” think about being covered correctly.

2-Call your insurance agent to share the agent’s name and mailing address being used to make the investment. Be sure to ask your agent to fax/scan the insurance quote to the closing party – and it can’t hurt to ask your agent to send you an insurance binder that you can give your lender prior to close.

This will help make your lender feel comfortable and secure in the deal knowing he/she has a personal copy of the details. Remember, your insurance agent knows what to do, just ask the right questions.

Once you make these two vital calls (and you’ve confirmed they received everything) you will be well on your way to finalizing your private lender loan.

questions3 Q’s are a charm

With every transaction you complete, be sure to ask these 3 questions:

  1. Have the funds arrived at closing? If the funds are scheduled to be wired to closing, double check the wire information for the attorney and title company’s bank account. Be proactive and act conservatively! Ask the investor to wire the funds at least 1 day prior to closing to give yourself a little wiggle room. Better safe than sorry, right?
  2. Have the certified funds been made out to the attorney and title company? Explain to your investor that he/she has 3 delivery options. The investor can (1) mail the funds to closing, (2) hand deliver the funds personally or (3) have you pick them up and deliver them at closing. If your investor chooses to mail the funds, be sure the loan is mailed at least a week in advance, and request a copy of the receipt by either fax or email.
  3. Who needs to be present at closing? Bottom line is the investor does NOT need to be present at closing. Who knew, right? You will be there to finalize details, and they will receive their investment paperwork package after closing. Most investors will appreciate you representing them, but should your investor want to be present, just go with it.

Never underestimate the power of a warm welcome

Now you know who to call and what questions to ask… You’ve got your C’s and Q’s checked off your to-do list, and now it’s time to tackle the welcome paperwork package, which, if you recall from above, your investor will receive post-closing where you will be present to represent him or her.

Your welcome package should contain 5 key documents:

  • Welcome Letter
  • The Note
  • The Mortgage/Deed of Trust
  • Insurance Policy
  • Disclosure

Check out a copy of our welcome letter. We’ve done the work for you and created one heck of a warm and fuzzy, so why reinvent the wheel?

A note about the note – be sure to keep the original and make a copy for the investor. Also, when it comes to the mortgage/deed of trust, the original document must be sent to the local recording office so that the investor’s interest is secured. Keep a copy for yourself and your investor. With the insurance policy, ask your agent to provide evidence of insurance form at closing.

Now let’s talk disclosures. There a few keys factors to note here…

I highly recommend presenting your disclosure to your lender prior to closing, and send them a copy of the fully signed document. Some investors don’t use disclosures once that rapport is established with the lender, but why not ensure you’re protected at all times. Make it a best practice, and simply cover your butt when you can.

It’s all about relationship benjamins, baby…and relationship building

I’ll leave you with this final thought – securing private money is all about personal relationships and establishing trust. The more you cultivate your relationships with your lenders, and the more they feel you have their back, the more private money you’ll see coming down the pipeline… and everyone is a happy camper.

So go that extra mile, always be considerate of your investor’s time, and hold their hand when the job calls for it. In the end, you’ll get the Benjamins… and an investor for life who will sing your praises and pass the good word about the good work you do on to other potential investors.

Can you say cha-ching!?

Lemme hear ya

As always, leave comments below if you’ve got something brilliant, awesome, fun or informative to share.



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