We are nearing the end of our first funding deal and I am wondering what is the best way to have our initial investment returned to us. If we use the ACH route we will be hit with a pretty hefty fee. I am leaning towards a wire transfer but I am not sure how to handle something like that. Does the borrower wire it to my attorney? Or would I just have them wire it directly to my account?
From my limited experience:
Borrowers title co (or attorney) will contact you to confirm amount, including any interest still due. They will send to the account you specify on closing. Mine have always been wired to my account. Your bank can send you all the wire info you need to provide to title co.
Typically the borrower would wire the money to your attorney or title company who would then release the lien upon payoff. They can always write a check which is how I do it.
I’ll echo what Chris said here and say to ALWAYS ALWAYS ALWAYS use a third party escrow service such as an Attorney or Title company. NEVER wire directly to an individual or encourage them to wire directly to you.
There are title companies that offer ‘Escrow only’ services in which they can handle a transaction like this for all parties. They’ll collect all information from the parties involved along with any documentation and if you’re the lender they’ll get a payoff request or loan reconciliation form from you (could be called something else). Borrower will wired or send funds into escrow and if there’s no “holding period” and everything is ‘green’ they’ll confirm and disburse funds appropriately.
Best of luck!