Usury law with AITD/wraps?

alvin · #1 (**permalink**) 01-06-2006, 11:01 AM

What interest rate percentage would you consider to violate usury law if I were to do owner financing?

Lets say if I buy a property with my credit and get a 7% rate, and I find a buyer with very bad credit willing to pay at 12% for 2 year installment land contract until this buyer can refi through me or qualify for a new loan. Would this 5% spread violate the usury law? Also are there any limitations in owning 5-10 properties and wrapping them?

alvin · #2 (**permalink**) 01-06-2006, 11:05 AM

by the way, this might be off topic but dont hard money lenders violate the usury law when they charge like 15-18%? sorry im still learning this stuff.

alvin · #3 (**permalink**) 01-06-2006, 11:09 AM

also i would think i can sell my position to a note buyer who might be interested in a 5% yield and whatever criteria they may look for? however im still on the hook since loan would be under my name. if i sell the note, i would think that i still have the deed till complete payoff?