Saturday, April 23, 2005

Circle Lending

My son lives in one of my rentals with his new wife (who I just adore). They want to buy the house from me. I struggle a bit with this. Not sure he is ready for "homeownership" at age 20, but admire the fact he loves real estate as much as I do and can't wait to buy his first house. (poor kid knew what a closing was at age 9)

I came across an article posted on Market Watch regarding a similar situation. The article referenced carrying the mortgage to avoid capital gains. It also mentioned that should "junior" feel that since Mom and Pop are holding the paper he can miss a month or two when needed. (I can see this...) The article goes on to mention CircleLending, which is a company that assists in loaning money to relatives, friends or business associates. They have a free guide you can download on their site. The guide includes sections on:

Assessing your situation
Establishing borrower and lender expectations
Structuring an agreement that works
Keeping accurate records

How they make money is a small set up fee and $9 per payment. If you have some funds from investments that you'd like to loan out and earn interest on be sure to check out their services!

The Wall Street Journal had this to say about them:
"Outsourcing... It's another way to avoid any uncomfortable conversations or confrontations over the loan in the future is to let someone else administer the loan for you. CircleLending, an online financial institution based in Cambridge, Mass., will help you."


Post a Comment

<< Home