Passive Investing

What is Private Lending?

• When regular people like you lend money to a real estate investor like us to buy a distressed property at a huge discount. The funds to close on the purchase and make repairs (your money) are secured by a 1st mortgage (lien) against the house that you and our company choose for your investment.
• Basically, Private Lending is your opportunity to become the bank and earn the high interest rate that the bank is earning on your money when you own a CD or have funds in a Money Market account. It’s your opportunity to eliminate the middle man and increase your returns.

What interest can I earn as a private lender?

• In general Private Lenders are paid fixed returns anywhere between 6% and 10% interest for the money that they lend, depending on the property and whether you want to receive payments monthly, quarterly or upon the sale of a property.

Why Would Anyone Borrow Money at 6% to 10% Interest When Banks Charge Much Less?

• Real estate investors commonly borrow money at these rates. Why? Well, because it’s not the cost of the money that is inherently important to successful real estate investors, rather, it is the speed and availability of the funds.
• Here’s what that means…….Real estate investors buy distressed properties at steep discounts for profit. Many times the properties purchased are distressed and banks take a long time to evaluate a loan package. This usually kills the deal.
• Speed is a real estate investor’s best friend.
• The best real estate deals are made when the real estate investor can close fast and pay cash. So, when banks delay and are too slow to fund, real estate investor lose great deals. Because real estate investors buy for profit, paying a high return on money borrowed is really just us being willing to giving a little profit away to the lender that helps get the deal done.
• It’s a win/win opportunity for both you the lender and us the borrower. The lender (you) gets the opportunity to earn high returns secured by great real estate deals we get to keep our business profitable without the limitations and delays usually imposed by traditional banks.

How Do I Evaluate Whether a Private Money Loan is a Good Investment or Not?

• It is fairly simple to evaluate the risk and the potential opportunity of a Private Money loan.
• We buy properties at huge discounts and borrow funds well below the appraised value of the property securing the loan.
• Equity and your maximum loan-to-value (LTV) are your safety net at 75% of appraised value. 25% equity
• All these transactions are closed with an attorney and/or title company.
• When you fund the loan, you will receive a Lenders Title Policy. This protects you and your loan against defects in title. Because all of your private loans will be funded at an attorney’s office or title company, getting a lenders policy is a very simple process.
• You will be named as Loss Payee on the property casualty insurance for the property that you are lending on. This protects you in the event of an insurance claim loss.
• When you are ready to make a private loan, your money will go from your bank account directly to the closing agent (attorney or Title Company) in the form of a cashiers check or a wire. We will not touch the money until after all of your funds have been properly secured by the real estate. The closing company will assure that this happens.

• When regular people like you lend money to a real estate investor like us to buy a distressed property at a huge discount. The funds to close on the purchase and make repairs (your money) are secured by a 1st mortgage (lien) against the house that you and our company choose for your investment.
• Basically, Private Lending is your opportunity to become the bank and earn the high interest rate that the bank is earning on your money when you own a CD or have funds in a Money Market account. It’s your opportunity to eliminate the middle man and increase your returns.