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transactional lending in Arizona

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Latest post Mon, Nov 22 2010 6:51 PM by harrylime. 5 replies.
  • Thu, Oct 29 2009 1:54 PM

    • M Read
    • Top 150 Contributor
    • Joined on Sat, Feb 28 2009
    • AZ
    • Posts 385

    transactional lending in Arizona

    I'm looking into doing tansactional lending, starting in Arizona. I'll be setting up an LLC do this.


    What kind of attorney do I need? Corporate? Contract law? Banking? Other? 


    What questions do I need to ask

    my CPA?

    my attorney?


    After that, for each transaction,

    What kind of standard fees will I have as lender?

    A few are wire transfer fees, both from my bank to the title co and back, fees that my bank may have for wiring money at a specific time period, phone calls to title company in the buyer's area, to the buyer,  other office fees. What might that include, and amount to?


    Do I set a single fee amount, or different for levels?

    $X for loans up to $49,999K, $XX for loans 50 to 99,999, $XXX for 100K to 149K, etc?


    What kind of information do I need from the borrower?


    What kind of documents/paperwork do I need?

    promissory note

    proof of funds, from me to borrower

    what else?


  • Thu, Oct 29 2009 1:56 PM In reply to

    • LynnM
    • Top 10 Contributor
    • Joined on Mon, Apr 3 2000
    • CA
    • Posts 28,248

    Re: transactional lending in Arizona

    I have to ask - given that you know absolutely nothing about this business what makes you think you should get into it?

    I suggest you start by researching the AZ statutes to find out what the requirements and restrictions are for lending instirutions.


  • Mon, Nov 22 2010 2:56 PM In reply to

    • jtempo
    • Not Ranked
    • Joined on Mon, Nov 22 2010
    • CA
    • Posts 1

    Re: transactional lending in Arizona

    Transactional lending is a specialized form of hard money lending.  As such, the documents and paperwork you need are not much different than that, however the terms you will be offering are greatly different.  As far as fee's go, it's your business so you can charge whatever you want, but will need to make sure that you do so in accordance with any usury laws in your state.  Additionally, many states may require a specific license for businesses to provide loans.  In some cases, this requires a mortgage broker license, in others, there may be a state level lenders license you can apply for (each with different restrictions).

    You can see what other lenders have done as far as price ranges (e.g.

    Finally, you should be very aware of the nuances required for transactional lending since the nature of the loans are subject to very specific criteria that is different than a hard money loan used for a rehab project for example. There have been some noted issues recently in AZ where many title companies have refused to do transactions leveraging transactional financing (back to back closings), so you may want to speak to a few title companies and get the latest news.

  • Mon, Nov 22 2010 3:31 PM In reply to

    Re: transactional lending in Arizona


    I have to ask - given that you know absolutely nothing about this business what makes you think you should get into it?

    Yeah, I gotta ask the same question.

    I suggest you find somebody who's already doing it and see if they'll train you.

    Here's some leads:


    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • Mon, Nov 22 2010 4:11 PM In reply to

    Re: transactional lending in Arizona

    Your questions indicate that you have very little familiarity with transactional lending. It's a competitive business, and if you don't know the ropes, you are taking a huge risk in this undertaking. You should know what's involved in this kind of lending, how to evaluate the risk of any proposed loan, and how to take steps to reduce your exposure. IMO you'd do well getting some experience in this industry before opening up your lending firm.

    But, to get to your questions, you want to at least consult a business attorney and a tax attorney for advice on what business structure will best work for you; what licenses, etc., you'll need; drafting of contracts, organizational documents (e.g. charter, operating agreement), and other documents you'll need; what the laws are for lending in your state, including usury laws, along with federal rules like the Truth-in-Lending Act; what the federal and state tax rules are and how to keep the tax bite as low as possible, and so forth.

    As for fees, you have a lot of flexibility there, but you need to know what the going rates and typical rate structures are in your area if you want to be competitive.

  • Mon, Nov 22 2010 6:51 PM In reply to

    • harrylime
    • Top 100 Contributor
    • Joined on Sat, May 31 2008
    • TX
    • Posts 549

    Re: transactional lending in Arizona


    jtempo is necroposting (and probably doing some spamming) to a year-old post.


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