Private Lending

Common Questions For Real Estate Cash Investor

Q: Do I Need a Lot of Money to Invest?

No! You can lend as little as or as much as you want. The amount of the loan and time period will factor into your return on investment.

Sometimes, you may want to start out small with short-term loans until you get comfortable with these investments.

In most cases, more opportunities and more favorable terms will be available to those with larger amounts to loan.

Q: Can I Send You A Check Today?

No! You only send money to close the deal when we have a deal that fits your budget.In any case, most of the times, you will wire the money directly to the title company or real estate attorney.

Q: Who Handles All The Paperwork?

Unless you are a highly skilled investor in real estate matters, we will handle all paperwork and details of each transaction and pay any expenses.

This is done by a real estate attorney or title company.

You begin to earn interest on the full amount of your funds as soon as they are received. Our goal is to ensure this entire process is hassle-free for you.

Q: Isn’t This Too Risky?

Knives are risky, aren’t they? But only when you do not use them properly.
We do not make speculative investments; instead, we focus on making standard, bank-like loans on properties with equity.

The property is the security for the loan.

Make no mistake – investing has risks, but the trick is in how you choose your investments and their safety net (collateral).
This is our expertise.

For example, your investment will most likely adhere to these rules:

It will not surpass the 80% Loan To Value.
You will get a mortgagee title insurance policy.
You will get an insurance policy on the property.
The loan will be closed by professionals.

Q: What Kind of Documents Will I Receive?

Typically you will get:

An original promissory note specifying the terms agreed upon
A copy of the mortgage. The original will be recorded and then mailed to you
A fire insurance endorsement naming you as mortgagee
A title insurance policy for the amount of your loan insuring you against any title defects

Q: How Do You Determine My Interest?

The interest rate depends on many factors, including but not limited to, the risk involved, the amount of funds loaned, the time period, ability to fund quickly, etc.

Q: How Do I Receive Payments?

You will receive your payments as we agree – monthly, or as a lump-sum (your loan amount plus interest).

Q: How Long Will I Be Investing My Money?

The term of the investment will depend on the deal.

It can be as short as six months, or several years.

It’s your money and it’s your choice. Short-term loans are typically interest only with full principal repayment at the time the loan is paid off.

Long-term loans may have amortizing payments (part principal and interest in each payment) and may have balloon payments, depending on your requirements and the investment.

Q: What If I Need My Money Now?

You should only invest an amount of money that you can comfortably leave in the investment for the term of the loan.

For example, your loan may be used to buy and fix a property, then sell it. Until it’s sold, your money will not be available, except interest payments.

Unlike in the money market, you cannot withdraw your investment at a moment’s notice.

Of course, you get a much higher return than you can get in the money market.

On the other hand, Promissory Notes secured by mortgages are purchased every day like stocks. We can assist you to sell the note if necessary.

Q: How Many Properties Do I Invest In?

Each investment will be treated separately as it comes.

Your limit is your choice. If you decide you like this form of investing, there’s nothing to stop you from making multiple investments.

Q: How Do I Setup My Retirement Accounts to Make Loans?

In order to use a retirement account for making loans, it must be administered by a “Third Party Administrator” (TPA) that allows real estate investments through a self-directed IRA.

Very few retirement account administrators, including those who do have self-directed plans, will allow you to make real estate investments.

If you would like to get setup, please contact our office and we will provide you the names and numbers of TPA’s that specialize in this field.

Once your account is established, all you do is sign papers to direct your TPA to make the investment for you.

Typically, there should not be any additional costs to you beyond your regular plan administration costs. Some TPA’s will even collect the monthly payments for you and deposit them into your account. How’s that for hassle-free?

Q: How Do I Get Started?

To get the process rolling simply fill out ourĀ information form