Lets assume you can lend at such rates and maybe earn the points in addition. Do you know how to judge if a deal is a good one as a lender? Do you understand the paperwork involved in setting up the loan? Have you studied the foreclosure process so you know what to do and when?
I am not saying that you can not learn. Just that the way you are posting implies that you are a bit green. Remember that even if you get the points, earn a high rate of interest and have a lien on the property a foreclosure could mean you actually lose some of your principal.
Lenders who make private loans for RE deals commonly have a strong RE investing background or they go through someone else who does. In the second case they are still responsible for the ultimate decision as to if the loan is likely to be a good investment. What they gain is better access to deals that likely make sense. Still there are no guarantees.
You can not ‘get around’. What you can do is research the limits in your state. You may find they are set to 30%.
The usury rules apply to specific loans. Other loans do not fall under the rules so there is no limit.
If you lend to owner occupants you should assume there are lots of rules to protect the consumer. Usury is only one.
If you lend from a business to a business and the business is not using the property as their personal residence (hard to do if it is a company) then you may find that there are no restrictions in your state.
John, sounds like I should use a mortgage broker as the middle man. I indeed understand the foreclosure process in the areas I would like to lend. I also have investing experience. I do not have lending experience.
I’m trying to find out information about lending in Iowa, though the web has only offered up piecemeal information. Granted, trying to dig through the code of Iowa is a bit of a pain, but the information is in there, somewhere…
I was planning to lend in Colorado and Nebraska. Only if I can get a deed of trust/Mortgage and only if I don’t have to get a mortgage license of some kind. I have heard of people lending at 15% and even getting points as well as getting a deed of trust as collatoral. That is/was my objectives here. Thanks for the replies.