I got a question from a viewer in Prince Edward Island the
other day.
He had read my 2014 best-selling book, Invest Local, and had a question about preparing
information for a lawyer in order to register security on a lending deal.
Many people who are contemplating investing in a small
business via making a secured loan often wonder how they can make sure the
borrower isn’t offering the same collateral to more than one lender.
I made this video to explain how registries work and give a
brief history of how they came to be. Watch: https://youtu.be/MeFAmvf6veE
The PPSR registries (or UCC registries) allow you to
publicly record the fact that a certain piece of property has been pledged as
loan collateral. They’re the most
versatile registries because you can record a lien on almost any kind of
property (outside of real estate.)
The system is so straight forward that many local investors
register their own security using online services. This is in contrast to real estate registries
which are strictly the domain of attorneys because they are so complex and
every jurisdiction is unique.
I’ve done dozens of deals where I’ve registered myself,
using a third party service provider, as
a lender in a PPSA database. I’ve also
done many lien-searches when investigating the purchase of used vehicles or
equipment.
It’s critical to learn how this works if you want to deal in
lending or used equipment because a lender’s rights under a lien don’t go away
if the property is sold.
Simply put, if you buy an RV and there is an outstanding
loan secured against it and the loan goes into default, the lender can still
take it to satisfy the debt whether you bought it or not.
If you’d like to learn how to create high returns by making
local private lending and lease deals, check out http://www.LocalInvestingCourse.com
The Local Investing Academy starts in September. For a quick introduction, read Invest
Local. It’s available from Amazon stores
worldwide or as a .pdf here: https://gum.co/quoB
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Do you live in Toronto or the Maritimes? I’ve got workshops coming up for Toronto in
September on buying and selling businesses and in October-December in the
Maritimes. Book now http://davidbarnett.eventbrite.ca
Thanks and I’ll see you next time.
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