FREQUESTLY ASKED QUESTIONS!

1.  How and why is it good for us to become private investors, as opposed to you using our funds?

Its good for me to use your funds because...

1)  The availability of CASH allows me to buy at a discount, that may be 60% to 70% of market value.

2)  Cash allows me to close quickly

3)  I get cashflow until loan is paid off, and back-end equity upon sale of property, at which time your invested principal is returned.

Its good for you, the private investor, because...

1)  Our purchase criteria, loan to value, mitigates your risk

2)  The note, mortgage and insurance documents are added security for your invested funds. A title company assures all parties interests are protected in a formal escrow.

3)  When your funds are in form of a new first mortgage, its the only mortgage. We pay 12% interest-only payments.

4)  We pay second mortgages a return of 15% and you are aware of existing mortgages as part of your investment decision

5)  The above results in a high rate of return as interest, and very low risk.

How long do you typically want to use private lender funds?

1)  Most private investors will want their funds constantly invested. We like to get funds committed for a 5 year to 7 year period.  This is very hard to predict, as some tenant -buyers will require more time to get finances and credit issues resolved, before qualifying for bank financing.  We get cashed out when they get financing.

I'm heavily invested in bank CDs.  Give me examples of how you compare to what I already have as a yield.

I will provide a $10,000 and a $100,000 example amount below for comparison:

                                 Yield          12 Month       Penalty

Bank CD $10,000        3.5%           $  350           $  175

Our Mortgage $10K     15%            $1,500                0

Investing with us means quarterly interest payments of $375

How about a $100,000 funded California property versus a similar CD?   

Bank CD $100,000      3.5%           $ 3,500          $1,750

Our Mortgage $100K    15%           $15,000               0

Funding this mortgage through us,  would pay quarterly interest payments of $3,750. Our leased property has an average market value of $150,000 and rents for $1500 per month. We do not have a  6-month penalty for early withdrawal like banks.  We need 30 days to find another private investor to replace you, if you needed to liquidate quickly.   

Our program pays more in 1 year than most banks in 4 years. It allows you to withdraw your funds, even pay the penalty, and still make more money within a year, if you move your funds to me immediately.

I'm an investor concerned with protection of my principal.

How is this achieved?

Many lenders are refinancing homeowners up to 125% loan to value. Thats a very risky position.  Our purchase criteria has only addressed our CASH-BUY criteria where we use private money. Most properties are acquired at 70% LTV max. We will at no time over leverage the property. Our #1 Rule is:  Money borrowed is no higher than 80% LTV where we will then build in additional equity by rehab of the property.

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