Blog - Page 19 of 31 - mspassiveincome

Private Lending (7) – LTV?

January 2, 2025 / 193

Continuing from the last post, we’ve roughly covered the underwriting process. However, the most crucial aspect is the final calculation. What exactly are we calculating?At the heart of it all is calculating the LTV (loan-to-value ratio) and the property’s debt ratio, which is essentially (existing debts on the property + applied loan amount) divided by the property’s market value. Let’s illustrate with an example. Suppose a property is assessed to have a market value of $1 million, with an existing bank loan of $600,000. If the homeowner applies for a second loan of $100,000, then the LTV would be calculated... Continue reading

Private Lending (6) – Key Points of Examining Property Rights

January 2, 2025 / 203

Continuing from the last post, another key point in title check is examining the property rights. This is quite interesting. The question I’m asked most often is: What if there’s duplicate mortgages? I was puzzled at first, and the person asking seemed surprised that I didn’t know. It turns out, in some countries, this situation can occur due to their national housing system not being centralized/electronic. However, it’s almost unheard of here because of the centralized registration system. Duplicate mortgages are impossible unless there’s malicious fraud and title issues were not spotted from the beginning. Even if such a situation... Continue reading

Private Lending (5) – Key Points of A Property

January 2, 2025 / 191

Continuing from the last post, after reviewing the borrower, let’s talk about the property itself. Property underwriting mainly involves examining the appraisal report and the property title.– Is the appraisal company licensed and accredited?– There’s a list circulating within the industry known as the “bank approved appraisal company” list. If the appraisal company isn’t on this list, we generally don’t accept it and instead request a report from a designated appraisal company. In major cities, there are only a few top-tier appraisal companies used by banks, making it easy to remember. However, in more remote areas, it’s safer to use... Continue reading

Private Lending (4) – Key Points of A Deal

January 2, 2025 / 183

Continuing from the last post, Jen was amazing. For several days straight, she patiently taught me how to underwrite the deals, page by page, line by line. The processmainly consists of three parts: the borrower, the property itself, and the numbers. We discussed each part in detail.Firstly, the borrower.When it comes to borrowers, we mainly examine the loan application materials and credit reports. Firstly, we need to verify various IDs to prevent fraud. At the same time, we need to ensure that the personal details and IDs on the credit report match. In this line of work, incidents of ID fraud... Continue reading

Private Lending (3) – Market Needs?

January 2, 2025 / 195

Continuing from the last post, I researched several core business departments, but I didn’t know which ones were the most crucial. I tried my best to rank them in order of importance, then listed out each department and the people I had interacted with. After filtering based on my existing relationships, I decided to first approach an underwriter who I was quite familiar with and easy to talk to. I thought I might need to approach 5-6 people to get all my questions answered, but as it turned out, she was the right person from the get-go.Her name is Jen.... Continue reading

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Private Lending (7) – LTV?

Private Lending (6) – Key Points of Examining Property Rights

Private Lending (5) – Key Points of A Property

Private Lending (4) – Key Points of A Deal

Private Lending (3) – Market Needs?

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