Attention Lenders

Do you have an IRA or any other investment capital that isn't getting you at least a 10% return safely?

Would you like a safer investment vehicle for your money? Many lenders use the stock market....but we have a better alternative!

What is this alternative? Becoming a private lender and loaning out your capital for real estate transactions in your state or maybe even your own hometown.

Making passive investments secured by real estate is not only safe but it also creates a very attractive return. Most people try to generate a retirement income by following conventional wisdom and letting other people control their money and make decisions for them. When they're finally ready for the money, they find that they have barely kept up with inflation and the cost of living has risen faster then their investment. If you do things like everyone else you'll have to be satisfied with the low return that these investments produce.

If you are interested in getting a higher rate of return on your money compared to a bank savings account, CD, money market, commodity, mutual fund or even the stock market read further....or call us at 831-621-6196!

Private Lending Benefits :

This concept is NOT new! There are companies all over the world called finance companies or secondary lenders (such as the Money Store, Beneficial and dozens of others) that do this. Take a look at your last credit card statement and see what interest rate you're paying. Congratulations, you too are willing to pay a higher interest rate for short term money that is easy to get. You're placing availability of funds above the cost every time you use the credit card. This is a multi million dollar business. When banks make a loan, they're using your money, the money you are allowing to lie around in a savings account or CD at a low rate where you actually net less than inflation. You receive a couple of small percentage points while the bank loans your money out at a higher rate and they receive the difference which is called the "spread". The spread results in billions of dollar monthly for these institutions. Why don't you become the bank! By using the investment capital you already have or even borrowing the money at a low rate and safely lending it out at a higher rate, you'll end up making money off of the spread.

We can provide a good dependable safe return secured with real-estate and you supply the short term capital. A win win situation!!

Answers to Common Private Lending Questions:

Q. Can you use your IRA or 401K to make these loans?

A. Yes! It's a great use for IRAs and 401Ks and what a great way to grow your money then the tax deferred way. With an IRA, all you have to do is transfer it from your current administrator to another administrator. One of the best administrators out there today for these types of transactions is Mid Ohio Securities (1-440-323-5491). They understand private lending and they make the process smooth and easy. This is not a roll over with any penalties from the IRS, it's merely a transfer from one administrator to another. If it's a 401K you must be control of writing the checks. If not, there are many ways to use this money as well.

Q. Is this a security or a mortgage pool?

A. No! You will own the whole loan with no other participants. You are in control of the loan, which in itself makes this a better investment than any other vehicle out there. Only when loans are pooled do they become a security.

Q. Who handles the paperwork?

A. All real estate closings are performed by a real estate attorney, title company or other closing agent of some form. Your check is made right out to one of these above businesses for the gross amount of the loan. Better yet, the borrower pays any fees associates with working with these businesses. It's then the responsibility of the closing agent to receive your funds make sure all the documents are in place to secure your interest just like they do every time they close a loan for a bank or other lending institution.

Q. How do I know what documents I will need?

A. When making any type of investment you seek the advice of a professional and let them handle the details. It's the same here. But some common documents would be an after repaired appraisal done by a licensed appraiser, title insurance, fire insurance, the original note and a copy of the mortgage or trust deed. A good closing agent makes this a smooth and easy transaction so you don't have to worry about any of this.

Q. Is this a long term investment?

A. Well that depends on what arrangements are made with the borrower. Typically the loans made by private lenders are with "interest only payments" with a 2 year balloon. At the end of the two years (or less) the principal amount is paid off and in the meantime interest only payments are paid every month. The longer the money is being used at a high rate the faster it grows. If it's interest only you are collecting, the interest is on the entire principal all the time. Sometimes the borrower might want the money for just a few months or a couple of years.

Long term or short term you win!!

Q. Do I have to collect payments?

A. Only if you wish. Many private lenders don't like collecting payments so arrangements are made to have someone else handle this. Many banks will collect them and deposit them right into your account and send the annual 1098 form to you and the borrower. There are also companies that do this on a national basis for a small fee (this fee would be passed on to your borrower). By the way, if you're using your IRA and the administrator is Mid Ohio Securities they will collect the payments and deposit them right into your account for a small fee, which again would be passed along to the borrower.

Q. Is making private loans a safe investment?

A. It's as safe as any other high yield investment and a whole lot safer than most. For instance, with stocks you're betting on companies you know little about and in a volatile market that you have no control over. You may do well one year and bad the next. Your investment is at the mercy of ever changing circumstances. With private loans your return is fixed and won't change regardless of the market. Your loans are secured by real-estate that you can actually see. It's very cut and dry. The term, rate, and conditions are what you say they are and they won't change...no guess work!

Q. Should you put all your money into real estate?

A. Probably not. Most advisors recommend that you diversify but you owe it to yourself to at least check it out!!

Call Us at 831-621-6196 to chat or email us at
Sell@We-Purchase-Homes.com.

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