Bad Idea?

[NeetaT]

Is this a bad idea? I just need some salutary advice.

http://www.aabincorporated.com/Home

[Jay-man]

If your intent is to lose your money, that looks like a great idea.

[LookoutBelow]

Hahahahaaaaa….!

 

Wouldnt make you  sub prime's, sub prime lender ?

That ought to be a good investment there chief !…Hahahaha God bless you and good luck….. Hahahahahaaaaa

[Navydoc]

Do people still really fall for this shit?

Never forget the expression there’s no such thing as a free lunch. Forgetting that little peice of wisdom has been what got the country into this mess.

[temeculaguy]

Taken from their website

“For “PIP” lenders, it’s all in a day’s work. These private individuals and companies operate where even sub prime lenders fear to tread, making loans to the desperate and needy the same way regular banks and brokers service traditional customers.”

That’s where I wan’t my money, with the seven borrowers the subprime lenders thought were too risky. This isn’t just their present tense business model, last year this was their plan, find the people the subprime lenders wouldn’t loan money to and then loan them yours. So if the subprime lenders only required a pulse, then I guess this is home loans for dead people.

[greensd]

There’s lots of money to be made lending to the desperate and the needy. After all, loan sharks and pawn shops seem to do okay.

EDIT: I just looked at the website… This isn’t about making money from the desparate and needy — it’s about making money from the rich and gullible. Stay away from them! Unless, of course, you are them, in which case this probably isn’t the best forum to shill on.

[Bugs]

It looks like a hard money outfit. I have some experience dealing with hard money lenders and it’s not what a lot of people think. This type of lender is pretty nuts-n-bolts. They don’t sell loans off or package them as MBS or CDO instruments, they hold and service those loans like a portfolio lender. Because they have to live with their loans they have zero tolerance for risk, at least the ones I’ve known are like that.

Forget 90% or 80% LTVs, hard money lenders operate in the 50% range and if they really like the property or the borrower they might offer as much as a 75% LTV. They rely on real credit and income verifications and they charge hefty interest rates. They are the lenders of last resort and they don’t mess around.

The fortunes of the hard money and the more conservative tier of portfolio lenders traditionally run in opposition to those of the conventional lenders. When times are good and credit is cheap-n-easy these guys don’t do very well because everyone has options and because their criteria are so tough they can’t compete. OTOH when times are tough and the conventional lenders are taking losses these guys do quite well.

You would still want to be real careful about checking out a hard money lender before investing money with them, though. The potential is there for a upstart hard money lender to operate a Ponzi setup. However, if you were dealing with a group that’s been around for a while and you could identify a track record of them actually financing properties over several years it might be a reasonable bet.

[NeetaT]

I will research the company a bit more before I plunge a half million or so in it. If anyone has a better way of earning an ostensible guaranteed 10% a year on your money, please let me know. I’m looking for the CD concept.

[kewp]

If anyone has a better way of earning an ostensible guaranteed 10% a year on your money, please let me know. I’m looking for the CD concept.

How about the Merck hard currency fund?

http://finance.google.com/finance?client=ob&q=MERKX

[Arty]

If anyone has a better way of earning an ostensible guaranteed 10% a year on your money, please let me know. I’m looking for the CD concept.

If you have minimum of 100k, there are a lot of private investment groups that you can get into. Some have been around for decades at about 10%-15% return. There are at least 5 in OC alone. You just have to make sure they are reputable and have been around for long time. My aunt join one in early 90s, it will only lend money to someone when they have equal equities to back the full value of the loan (they do the appraisal of the properties themself).

[greensd]

http://forums.prosper.com/index.php?showtopic=23358

[HereWeGo]

My first instinct is that Neeta should definitely invest 500K with these folks. The link supplied by greensd only reinforces that belief.

[NeetaT]

I called the company and it sounds legitimate. I plan on flying to their location to visit the management to get a confirmation on their solvency before I plunge into the investment. I also found out that they now pay 12.5% for deposits of $500,000.00 or more no matter if it’s 1yr or 5yrs.

[Duck]

Neeta,

I have experience with hard money lending and the #1 rule for an investor is to diversify among lenders and among properties. Don’t put one lump sum into a deal. Over time you are going to end up with some foreclosures (which can take 12-24 months to cure) so you need a lender that can navigate that process as quickly and efficiently as possible. Have them show you how they’ve done with the properties they’ve had to foreclose on. If they say they don’t have any foreclosures, they aren’t telling you the truth. Also I just quickly glanced at their website and it said you get a notarized promissory note, but I didn’t see anything about a trust deed on the underlying property. you eed that and it needs to be recorded.

BTW there are tons of these guys in California and you can do better than 12%. Another nice investment is “factoring” which is where the lender/investor lends money based on accounts receivable for businesses. The loan is secured by the company’s assets and you can get 15-18%, but again you need someone with a proven track record of 20+ years in the business IMO.

[NeetaT]

Duck,

Thanks for the reply and thanks for not being sarcastic. This is a serious decision and I will look into other companies now that you mention it.

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