TAILIEUCHUNG - Re Academic Press Private Real Estate Investment_9

Tham khảo tài liệu 're academic press private real estate investment_9', tài chính - ngân hàng, đầu tư bất động sản phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | CHAPTER The Private Lender The contemplation of difficult mathematics Wolfskehl realized was far more rewarding than the love of a difficult woman. Paul Hoffman The Man Who Loved Only Numbers p. 209 INTRODUCTION The two most common ways the private real estate investor becomes a lender are 1. Originate or purchase a loan for cash. 2. As the seller of investment property provide a buyer with financing for a portion of the purchase price by taking a note rather than cash in partial payment. There are ramifications associated with either strategy. Combinations are also possible an example being a loan made as part of a sale that is then purchased by another private investor. Like many real estate opportunities the permutations are numerous. In this chapter we will Examine motives of private investors who choose to become lenders. Discuss the difference between aggressive and conservative lending policies. Measure some of the true economic costs of private funds. Describe specific loan provisions that accomplish tax objectives. Warn against a few of the traps for the unwary that exist in the tax code. Lending requires a host of special skills. Local laws govern many of the conditions under which loans are made. This chapter is not about those legal details. Rather it is about the economic financial and tax ramifications of these activities. 237 238 Private Real Estate Investment THE HARD MONEY LOAN VERSUS THE PURCHASE MONEY LOAN A loan secured by real property made directly to a borrower via a cash advance from the lender is known as a hard money loan. Loans granted to buyers by the seller as part of a sale are referred to as purchase money loans. While this is our convention the language is imprecise. Some states consider cash loans from third parties purchase money simply because the proceeds of the loan constitute part of the purchase price. A common misconception is that because cash was paid for a hard money loan it should be held to some sort of higher .

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