How To Start A Hard Money Lending Business

So you want to start a hard money lending business, but are not sure how it will be taxed or structured? In this video, Clint Coons, Esq. will explain how to start and structure a hard money lending business in less than ten minutes.
There are a few steps that you need to mind when setting up this exciting new venture in your life.
"How do you determine which way to go?" 3:22
There are a number of decisions and routes one can select but having the right information is vital in making the right choices to ensure your success.
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Clint Coons, Esq. is here to give you the insight you didn't even know you needed to help you get your hard money lending business off the ground.
Find yourself in the winner's circle through your own hard work and the teachings of this video.
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Until we release our next video, we are wishing you luck and fortune.
Show Notes:
0:00 Intro
0:53 Two-Sides
2:44 S or C Corps
4:47 WY LLC
6:17 The Lender
8:46 Outro
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ABOUT CLINT COONS
Clint Coons, Esq. is one of the founding partners of Anderson Law Group, Clint has grown his legal and tax firm to over 400 employees by assisting real estate investors with creating and implementing solid entity structuring plans. His success in these regards is in large part due to his personal investing experience. A successful attorney, real estate investor, and speaker, Clint has used his innovative and dynamic strategies coupled with knowledge borne from experience to help thousands of people save millions of dollars and build real wealth.
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The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice.
#moneylenders #businessstructure #hardmoneylenders

[@bobd2960]

Clint, Great video as always. Would you be able to do another video on how hard money lending would be affected by the Dodd/Frank bill?

[@wr85487]

This is fantstic! As always, thank you for great content.

[@ClintCoons]

Glad you enjoy it!

[@jamesdupuis4140]

Love the info!! Gonna file for my Wyoming LLC

[@organizer14]

Please give Washington DC and US gov as example of gov regulations or registration requirements that must be complied with please.

[@ayoa7080]

You are killing it with all these creative strategies. So Wyoming LLC will have its bank account, the Biz LLC will have its own bank account that will accept the loan deposit. Both entities taxed as S or C Corp. The UCC is filed as encumbrance to inflows coming into the Business LLC in the amounts of loan made. (1) So physically what paper trail do you need to keep for the loans? (2) where would you make the physical filing of that UCC? and (3) Do u file a UCC each time you make a loan to the Business LLC in the loan amount?

[@ClintCoons]

The lending LLC would be a partnership or disregarded. The UCC would be one filing with the secretary of state where the operating company is organized. I would only make one filing for a blanket loan commitment.

[@alliesteamc3546]

Thank you for doing this! Also how to answer each question in the Application for new EIN from asset protection viewpoint

[@ClintCoons]

Carefully. 😂 No really, you provide your information as the responsible party. No hiding from the IRS.

[@abubakarkinene]

Thank you for that message

[@buzybill]

This is very interesting! I'm your client at Anderson. Do you suggest UCC1 from Wyoming holding LLC or create disregard LLC in the states I'm lending and the create UCC1 to S or C Corp? Since, in order file claim in case of lawsuit to S or C Corp, you have to register in the state your are doing business?

[@oleopathic]

Same question.

[@organizer14]

No one on KZbin has posted all the Wash dc or federal requirements or regulations for starting a lending business despite the many KZbin videos on the topic. It would be very helpful to do so. Many thanks!

[@marcelomancini3066]

Clint, thanks for creating such a great step-by-step guide. This is fantastic. I do have one doubt and wanted to make sure I understood this correctly. Let's say the lending biz is a Florida LLC, (could be Sole or multimember LLC) and taxed as a c corp. Since we are lending it would make sense to show who the members are just like you said in the video and we would get paid as employees via W2 (saw it in another video). For the WY LLC, it would be member or mgr-managed since it does not matter and we would use the UCC1 with the lending biz in FL. Would you set it up as a disregarded entity for taxation or partnership (K1)?

[@ClintCoons]

I would set up the FL LLC as you described and the WY LLC as manager managed treated as a disregarded entity for tax purposes.

[@marcelomancini3066]

@@ClintCoons Thank you for the response. In other videos, you talk about using Delaware instead of Wyoming if one was doing commercial or multi-family RE. This would be holding RE but lending but let's say we may look into holding some in the future. is there a video where you go into detail on the two?

[@ClintCoons]

@@marcelomancini3066 Not yet

[@ImRAM428]

Thanks for the info, Clint. Wondering if going through all these entity steps is feasible for someone just getting started with 10k? I’m in Cali and have an opportunity in Memphis.

[@ClintCoons]

Maybe get your first deal done then consider the setup.

[@philippedros7752]

Great information! Question, what do I state the purpose of the Wyoming LLC as?

[@ClintCoons]

Private lending and note investing..

[@zackdiaz6375]

Very interesting

[@mandralliance]

Solid info

[@renoloanprobycpc]

Great Video !

[@ClintCoons]

Thanks for the visit

[@marcelomancini3066]

Hi Clint, I went back and watched your video and had an additional question. In the scenario provided the holding company was to hold funds and then loan yourself (Lending LLC) and execute a UCC1. Let's say I plan to use my funds but would also consider using other people's money ( family and friends) would their funds flow (via loan) into the holding LLC or directly into the lending LLC.

[@ClintCoons]

This one would require careful consideration to avoid securities issues.

[@marcelomancini3066]

@@ClintCoons Agreed, loved your video on syndication where you touch on Reg D etc. Assuming all that followed it could flow directly into the lending company but what if it goes int WY holding to ensure everyone’s interest is covered all with the UCC1.

[@ClintCoons]

@@marcelomancini3066 UCC1 does not cover real estate only non-real estate assets.

[@ellenoir5678]

Ight coach!!!

[@presidualist4587]

The 2013 debeat which one should I obtain first?

[@ClintCoons]

I would start with the LLC

[@oleopathic]

How can a general partnership be setup such that one partner (of two) retains their qualification for medicaid as the general partnership earns a profit as interest on private money loans ?

[@ClintCoons]

You should consult an elder law attorney.

[@oleopathic]

@@ClintCoons that's a good idea! Who would you refer ?

[@ClintCoons]

@@oleopathic I do not know of one but check with your local bar association.

[@oleopathic]

@@ClintCoons thank you for pointer!

[@ShoreFC-s]

how much money would be needed to start such a business?

[@ClintCoons]

It would depend on your market and the average home price investors are paying for flips.

[@joshbenjamins]

In Hampton Roads, Virginia we are able to cover a purchase $90K and rehab $35K for a total loan of $125K. If you use your SDIRA to lend the money out it’s totally tax free returns. I would also say it depends on where you are lending. San Diego California you’re looking at $500K purchase and $250K rehab!!! 🙏🏽

[@777cayman]

Gonna make you an offer you can’t refuse...

[@andrestriveno8565]

How do you raise money to start lending?

[@alexashworth3119]

👍

[@therobparisi]

Looking for capital!

[@oleopathic]

Not convinced a lender needs asset protection via LLCs. He's not selling a product, nor engaging in dangerous behavioir. He's not a doctor, etc. Just seems like overkill. Please convince me to the other side of the argument!

[@ClintCoons]

Bam you kid just ran his car into a 3rd grader in a crosswalk. You are correct in your initial assumption. The asset protection threats will not materialize from the lending - they will materialize outside of the entity.