Private Money Lenders

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Private Money Lenders

What is private lending?

Private lending is when individuals lend their money to a real estate investor to acquire properties.

Why is private lending better?

Private lending gives you an opportunity to become the bank and earn the higher interest rate on your money.

What interest do we earn?

Private lenders are paid anywhere between 8% to 10% interest for the money that they lend to real estate investors.

What paperwork is involved?

There are two documents that set up your lending terms and security. A promissory note and a deed of trust.

How do I fund the loan?

Once the paperwork is approved by the attorney, you will wire the money directly to their escrow account.

How is my loan protected?

As a private money lender, the deed of trust is a mortgage (recorded) as a lien against the property that you can foreclose on if the investor defaults.

How do I get paid?

Depending on your terms, your loan and interest payments may be monthly, quarterly, or in full at the sale (or the exit) of the property.

What if the property sells?

The property cannot sell or be refinanced without your lien being removed and your remaining balance paid in full at closing.

Underwriting Each Deal

In order to successfully acquire an asset, we conduct a physical, legal, and financial analysis and risk assessment of the property. This includes a title search, a property inspection, and a CMA (comparative market analysis) to determine the resale and rental value of that asset.

Once our preliminary underwriting process is complete, we create a full detailed "investor report" and distribute it to our private money lenders. This report will include the purchase price, ARV (after repair value), down payment amount, and the details of the offer to our private money lender.

Promissory Note and Deed of Trust

Promissory Note identifies the terms of the repayment, the length of time of repayment, the interest rate, the payment schedule, etc. The Mortgage or Deed of Trust is signed by the real estate investor and recorded in the public records by the closing attorney to secure your loan against the property.