- You are interested in the real estate, but do not have the time or unlimited funds to jump in. Our specialty is finding attractive real estate investment opportunities across the country and working with individuals like you, who are keen on building wealth via real estate.
- You want to diversify your investments. If you already own other types of investments, then private lending is definitely worth looking into. That's because having all your investments in one type (value or growth mutual funds, for example) often means you have your "eggs in one basket". Consider what has been happening with the stock market the last 18 months. Having your money in different investments dramatically reduces your risk.
- You have your primary investment needs taken care of already. This is money you can invest, without having to draw upon it soon. This works to your benefit, because the longer you can have your money working hard for you, the higher the returns you can generate.
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All kinds of people. As investors, it's not the cost of the money that counts, but the availability of it. Having the funds available can make or break a deal. When we find a good deal, we usually need to close quickly, sometimes in a matter of weeks. This is not possible with banks, which can take months. And in some cases, we have lost deals, due to delays by the bank. Also, there are only so many loans that we can do with a bank, before we are penalized for being good bargain hunters. Typically banks limit loans, up to 3-5 per entity, no matter how great the deals are! Thus, we can and do borrow often from the banks; however, we are looking to work with folks that need to maximize returns on their investments. |
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We are not talking about high loan to value (LTV) loans the banks and savings and loans make. What we are dealing with here are very low LTV loans. By that, we mean no higher than 70%-80% of the value of the property securing the loan. For example, this means if a property appraises for $100,000, we would borrow between $70,000 to $80,000 maximum. It's obvious why this is a much safer approach than most lending institutions take. The banks are in trouble because they made loans at 95% to 100% or even 125% loan to value ratios. They just don't have any cushion for default. On the other hand, when you are dealing with an 80% maximum LTV on an income producing property, there is much equity above the loan. |
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All investing has risks. However, the issue is in how you choose and manage those investments and most importantly the kind of safety net (collateral) you have going into the project. That's what we excel at. Solid investment returns are the goal, but risk is important to consider as well. Even U.S. government investments ARE risky! Why? Because often those investments provide a rate of return that doesn't even keep up with inflation. Though treasury bonds and other government investments are the safest around, you're still taking on huge purchasing-power risk, by purchasing them. There are no guarantees when investing. What you should be after is a solid return for a given amount of limited risk.
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Making real estate loans is an approved and widely accepted use of IRA's and Pension Plans. Think of it, now you cannot only loan out money that has been unavailable for you to use, but you can make it grow rapidly…….
Since Uncle Sam is NOT taking a bite of your profits until you draw out the money, or never if you have a Roth IRA, more money is left in the account to compound and grow. The results are staggering. You'll be receiving interest on interest on interest and
It's All Legal And Approved By The IRS!
In order for you to use retirement accounts for loans a "Third Party Administrator" or TPA must administer them.
This TPA is set up and approved to administer your loan activities. This means you will probably have to transfer your plan to one of these TPA's, unless of course, your present administrator is set up to do that, but the likelihood of that happening is slim to none. Mid Ohio Securities is the TPA that many use. They specialize helping convert your accounts for investment and can answer many of your questions regarding making loans with you IRA or Pension Plan. However, you can use any TPA of your choice. When your TPA is located, simply send the transfer form to them and they'll do all the work for you. Once you've done that... You're Ready To Make Loans!
When you've selected an investment opportunity you simply notify your TPA where to send the check for the gross amount of the loan and you're in business. There should be no costs to you except your regular plan administering costs. Most TPA's will even collect the monthly payment for you and deposit them into your account. There are some restrictions when dealing with IRA's such as self dealing, but you're TPA will furnish you with all of the facts upon request.
There is no BETTER time to get started than right now. While most people are complaining about the low rates they are getting on their CD's and other low paying investments, your money is working hard for you, in a well secured investment.
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You should only be investing an amount of money that you can leave in the property for the term of the investment period. However, we realize that unforeseen life events can occur and would resolve such a matter on a case by case basis.
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We are not tax advisors, and we urge you to speak to one before making any investment. But in general terms, because you are a lender, you will not receive depreciation benefits. You will be receiving interest income. You may or may not be able to offset that income with some of your other investments. |
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When banks make mortgage loans, they don't get new information daily on the loan, and neither will you as a lender. We only provide quarterly updates.
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This would depend on your investment goals. If it's to get the absolutely highest return possible, then be prepared to take on some serious risk. Foreign currency or commodities trading can give you that high return, but your losses may be more than your original investment. On the other hand if you are looking for a solid return with reasonable risk, then consider investing with us.
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We cannot give you an exact quote because it depends on the strategy and issues related to the particular property, that we would present to you. As a very rough guide, you can expect private loans on real estate to be in the range of 7% -10% interest per year.
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- You're looking to score a "grand slam". Our goal is for a solid return with reasonable risk. We are not aiming for over night/instant riches.
- You are not comfortable with any risk at all. As has been explained, your investment is covered with ample collateral. But of course, that does not make it totally risk free. Should a foreclosure occur, the good news is you now may potentially receive much more than your investment back; the bad news is you may have to wait through part of a market cycle to receive it.
- You need the money REALLY soon. If your child is going to college next spring, then this is NOT your investment. You should be able to put this money aside and forget about it, until we exit the deal.
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You don't have to take a "leap of faith" by working with us. Everything's visible: You get to learn about the property you'll be lending on. You are given all the facts about the property's value, condition, comparable properties in the area, the proposed use of the loan proceeds, etc. Only when you have all the facts do you decide on investing. You know exactly which property you're lending against. Compare that to buying a mutual fund, where you have only a vague idea about what the investment manager has put your money in. Well folks, you're not one of those people who are uninformed anymore. You now have the knowledge. So what's it going to be? Are you going to continue to let other people control your money, or are you going to take CONTROL of your financial destiny. Are your retirement plans on track or is that no longer an option, for you? Take control of your financial future and make sure that you have FINANCIAL SECURITY, to do what you want, when you want. Private lending is a powerful way to build wealth, which most people aren't even aware of. Join the club. You're now ready to start investing, go ahead and fill out our Private Lending Form. |
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