Private Money Lender Attorney in Atlanta, Georgia

Why private lenders need a Georgia real estate attorney

A private loan is only as safe as its paperwork. If the note is unclear, the security deed is defective, or title was not cleared, you may find out only when the borrower stops paying. Then a fast, low-cost recovery can become a lawsuit.

Georgia also has its own rules. Loans are secured by a security deed (deed to secure debt), not a traditional mortgage. Georgia's usury limits apply to private loans. And Georgia requires an attorney to oversee real estate closings. We bring all of it together so each loan is documented, insured and enforceable.

Our Private and Hard Money Lending Services

Loan document preparation and review

We draft and negotiate the documents that define your rights:

• Promissory notes, fixed or interest-only, with balloon, extension and default-rate terms
• Security deeds with a power of sale
• Personal and corporate guaranties
• Assignments of leases and rents for rental properties
• Construction loan and draw agreements
• Loan modifications, extensions and payoff letters

Due diligence and title

Before you fund, we examine title and identify prior liens, judgments, tax problems and other recorded interests. We also confirm that the borrowing LLC exists and is in good standing, and that the people signing for it are authorized to sign. We then issue a lender's title insurance policy so your lien position is insured.

Loan closings and funding

We close acquisition, refinance, bridge, fix-and-flip, BRRRR and ground-up construction loans. We coordinate with the borrower's purchase closing, prepare the settlement statement, disburse funds, and record your security deed promptly.

Construction draws and holdbacks

For rehab and construction loans, we set up holdback and draw procedures and document each draw. That way your lien covers the money you advance as the project progresses.

Portfolio lenders and repeat closings

If you fund multiple loans a month, we build a standard document package and closing process around your terms. You get consistent loans, fast turn times and fewer surprises.

When a loan goes bad

When a borrower defaults, we review your options with you, including workouts, forbearance, a deed in lieu of foreclosure, or a sale under the power in your security deed. (Firm to confirm which default and foreclosure services it handles directly.)

Georgia law every private lender should know

Security deeds and non-judicial foreclosure

Most Georgia security deeds include a power of sale, which lets a lender foreclose without filing a lawsuit. The process still has strict steps. The borrower must get written notice at least 30 days before the sale. The sale must be advertised once a week for four weeks in the county's legal newspaper. Sales happen on the first Tuesday of the month at the courthouse. If you want to pursue a deficiency after the sale, you must file to have the sale confirmed by the court within 30 days. A mistake at any step can delay recovery or expose you to a wrongful-foreclosure claim.

Usury and interest rates

For loans over $3,000 and under $250,000, Georgia lets the parties agree in writing to an interest rate stated in simple-interest terms. On any loan, though, charging more than 5% per month is a criminal offense. That ceiling can be reached through points, fees and default charges, not only the stated rate. We structure rates and fees so your returns stay within the law.

Business-purpose vs. consumer loans

A loan to an investor or an LLC for an investment property is usually a business-purpose loan. A loan secured by a home the borrower will live in can bring in federal and Georgia mortgage-lending and licensing rules. Ask before you lend on owner-occupied property. (Attorney to add specifics: Dodd-Frank, SAFE Act and the Georgia Residential Mortgage Act.)

Recording costs and taxes

Recording a security deed in Georgia can trigger an intangible recording tax depending on the loan's term. We figure that cost into closing so it doesn't surprise you or your borrower. (Attorney to confirm current rates and short-term note treatment before publishing.)

Thinking about becoming a private money lender?

More people lend to real estate investors from savings, self-directed IRAs or business funds. It can be a good secured return, but new lenders take on risks they often don't see. Before your first loan:

1. Decide how you'll hold the loan: personally, through an LLC, or through a self-directed IRA. Each has legal and tax consequences.
2. Set lending criteria: loan-to-value, borrower experience, property types and loan term.
3. Never fund without a title search and a lender's title policy. An unpaid prior lien can wipe out your security.
4. Use documents made for Georgia. Form notes from other states may not include Georgia security deed or foreclosure terms.
5. Fund through an attorney's escrow account, not by wiring money straight to the borrower.
6. Pooling money from other investors? That can raise securities-law issues. Talk to counsel first.

We help new lenders set up their entity, document package and closing process.

For borrowers: before you sign a hard money loan

If you're the investor taking the loan, read the full package, not just the rate. Look closely at:

• Points, extension fees and default interest
• Personal guaranty terms
• Draw and inspection requirements
• Prepayment terms
• How a default is defined

We can review a borrower's loan documents before closing.

Why lenders choose Bagwell & Associates

• Trusted by Atlanta lenders. We represent several large private money lenders in the metro area.
• Closings and law under one roof. Loan documents, title, closing and recording in one place.
• Investor-deal fluency. We close assignments, double closings and creative-finance deals, so we understand how your borrowers' deals are structured.
• Big-firm finance background. Founder John E. Bagwell, III advised clients on public and private financing at Arnold & Porter and Powell, Goldstein, Frazer & Murphy before founding the firm in 2005.

Talk to an Atlanta private lending attorney

Whether you fund one loan a year or dozens a month, we can help you lend with confidence. Call 678-528-1908, email orders@bagwellassociates.com, or use the form to schedule a complimentary initial consultation.

Private money lending FAQ