What is Private Lending? “Private Lending" refers to a private individual making a loan to another individual with real estate as collateral. You Are The Bank Your Name Is On The Note and Deed of Trust “Private Lending" refers to a private individual making a loan to another individual with real estate as collateral. You Are The Bank Your Name Is On The Note and Deed of Trust
Benefits of Private Lending Secured by tangible property Safety - low risk –As long as there is value in the property, your investment is secure Great returns People are familiar with real estate investing because real estate ownership is so common. Receive monthly payments
Basics Let’s assume we have a $500k house in the San Francisco Bay Area… VALUE: $500k LOAN: $300K (60%) PROTECTIVE EQUITY: $200K (40%) We lend NO MORE than 60% of value… This is our “protection” - our cushion…
Why Would Someone Pay That Kind Of Interest…? IMAGINE THIS SCENARIO: You get a chance to buy a property worth $500,000, in today’s market, for $250,000. You have 5 days to close. The bank will only accept cash. Do you care if you pay 12% for 6 months if you can CLOSE on the deal?
Someone WILL Pay Because… Immediacy: Access to capital much faster than conventional lender. Asset Based Underwriting: Borrower qualifications can be subordinate to the value of the property. Timeliness: Conventional lenders are not fond of short term loans Improvement Costs: “Rehab Loans” can include the cost to improve the property, increasing equity Number of Loans: Traditional lenders limit number of loans
Our Broker Services Loan. You Receive Monthly $$$ Our Broker Services Loan. You Receive Monthly $$$ How Does It Work? 5 STEP SYSTEM Borrower Requests Loan and Submits Docs Our Broker Confirms Viability Our Broker Confirms Viability Investor Introduced To Project & Makes Commitment Investor Introduced To Project & Makes Commitment Escrow Opened & Investor Places Funds Escrow Opened & Investor Places Funds Remember: YOU ARE THE BANK
Every Investment Has Risk! Almost all loans will have at least one late payment –The investor actually gets paid more for that because the borrower pays penalties. A portion will turn in “default” A smaller portion will go into “foreclosure” Very few make it all the way to auction. Why? –Protective Equity! The MOST important number to look out for in private lending is VALUE of property
Private Lending vs. Stocks Private Lending Great cash flow generator – and quickly Use OPE (other people’s experience) Use OPT (other people’s time) Passive income Relatively secure Higher returns than stock market Stocks Not good for cash flow Based on demand and supply – beyond your control S&P 500 Lower returns No collateral
In Summary Private Lending is still one of the relatively safest investments you can make, offering you a high return with consistent, monthly cash flow.
Conclusion Do you know someone who would like to take advantage of one of the greatest opportunities in our lifetime with low risk and high returns? Contact: ---