If you have some mineral rights my case only 6 acres but the well which is on the division is producing not ext high but ok and i do recieve royalty cks monthly does anyone know of where a mineral right owner would go to inquire about a small loan as the mineral rights as callatereal my mineral rights are in richland co mt and the name of the well is arrowhead federal h-26 i have 6 acres with 18% royalty i believe the section is 320 acres Thank you Theresa
A section is 640 acres but your well is probably on a 1280 if it is a Bakken. 6 acres is not much and I don't think anyone would loan on such a small amount. If you had a couple of hundred acres and a producing well, a bank might look at it! Good luck
A few years back I was funding a large royalty lawsuit, to which I was a the leading plaintiff. At one point I was almost out of cash despite the prospect of a seven figure windfall from the lawsuit. I tried to get a royalty loan from my substantial royalties, and couldn't get a bank to consider it -- even Texas banks balked, and the property I was going to put up as colateral was located in Texas. Recently, I started a company to make short-term royalty loans. We are only interested in the validity and safety of the colateral. We don't care about tax returns or credit checks. The interest rate is high, because we raise private equity to fund these loans -- the the convenience is great. The minimum loan we make requires a royalty of at least $300/month (although, I would personally consider a smaller loan). A typical rule of thumb for maximum loan amount is about 25 times the monthly royalty. I hope this helps.
The KEY words here are "HIGH INTEREST RATES"...You better have a great producing well and need the money VERY bad!!!
Donald Skotty said:
A few years back I was funding a large royalty lawsuit, to which I was a the leading plaintiff. At one point I was almost out of cash despite the prospect of a seven figure windfall from the lawsuit. I tried to get a royalty loan from my substantial royalties, and couldn't get a bank to consider it -- even Texas banks balked, and the property I was going to put up as colateral was located in Texas. Recently, I started a company to make short-term royalty loans. We are only interested in the validity and safety of the colateral. We don't care about tax returns or credit checks. The interest rate is high, because we raise private equity to fund these loans -- the the convenience is great. The minimum loan we make requires a royalty of at least $300/month (although, I would personally consider a smaller loan). A typical rule of thumb for maximum loan amount is about 25 times the monthly royalty. I hope this helps.
So I'll ask...what do you mean when you suggest "the interest rate is high"??
Donald Skotty said:
A few years back I was funding a large royalty lawsuit, to which I was a the leading plaintiff. At one point I was almost out of cash despite the prospect of a seven figure windfall from the lawsuit. I tried to get a royalty loan from my substantial royalties, and couldn't get a bank to consider it -- even Texas banks balked, and the property I was going to put up as colateral was located in Texas. Recently, I started a company to make short-term royalty loans. We are only interested in the validity and safety of the colateral. We don't care about tax returns or credit checks. The interest rate is high, because we raise private equity to fund these loans -- the the convenience is great. The minimum loan we make requires a royalty of at least $300/month (although, I would personally consider a smaller loan). A typical rule of thumb for maximum loan amount is about 25 times the monthly royalty. I hope this helps.
I agree with Mr. Peterson, how high is the interest rate ?
Because we use investor capital, the interest rate ranges between 14-17 per cent, depending on factors like term and risk.
So Theresa...there is one option....
I do remember taking out the loan on my first house at 12% knowing that I had received a "great" rate at the time!! However, this was back in the early 80's...and many things have changed. But, I had to smile as I do remember when "low risk" folks like me were offered great rates of 12-15 percent.
Good luck on your decisions. And, as was offered above...6 acres in a 1280 spacing unit will not have a huge yield unless that well is an incredible producer!!
A royalty loan at 15% is quite different from a 14% 30 year home mortgage, circa 1981 (I had one). Because it provides funding for a short-term need, and the borrower is only burdened with the high interest rate for a relatively short period of time. In our case, we limit the term of the loans to 24 months. Hopefully Theresa's single well in 1280 acres will grow to multiple wells in the spacing unit -- as is happening in the Texas Eagle Ford.
Donald, I appreciate your words and the business that you and others are offering. I added what I added (with a smile and tongue in cheek) at how the economy, life situations, etc.... come and go!! Indeed, there is a difference, as you pointed out, between that mortgage of 30+ years ago and a short term rate for today (consider the interest charged by credit card companies!!!). Most of all...may the oil continue to flow from these wells...and may there indeed be multiple wells coming sooner rather than later.
Donald Skotty said:
A royalty loan at 15% is quite different from a 14% 30 year home mortgage, circa 1981 (I had one). Because it provides funding for a short-term need, and the borrower is only burdened with the high interest rate for a relatively short period of time. In our case, we limit the term of the loans to 24 months. Hopefully Theresa's single well in 1280 acres will grow to multiple wells in the spacing unit -- as is happening in the Texas Eagle Ford.
Donald Skotty , do you have a web site for your loan company? How are you contacted if someon is interested in a loan?
Donald Skotty said:
A few years back I was funding a large royalty lawsuit, to which I was a the leading plaintiff. At one point I was almost out of cash despite the prospect of a seven figure windfall from the lawsuit. I tried to get a royalty loan from my substantial royalties, and couldn't get a bank to consider it -- even Texas banks balked, and the property I was going to put up as colateral was located in Texas. Recently, I started a company to make short-term royalty loans. We are only interested in the validity and safety of the colateral. We don't care about tax returns or credit checks. The interest rate is high, because we raise private equity to fund these loans -- the the convenience is great. The minimum loan we make requires a royalty of at least $300/month (although, I would personally consider a smaller loan). A typical rule of thumb for maximum loan amount is about 25 times the monthly royalty. I hope this helps.
m borgen said:
Donald Skotty , do you have a web site for your loan company? How are you contacted if someon is interested in a loan?
Hi M Borgen, The website is under construction. So, I can send you a private message with my contact information. Look for a friend request. Don