|
|
 |
|
| |
|
|
| |
by Lou Castillo
|
|
print article · comment on article
|
|
| |
previous |
page 2 of 4 |
next |
|
| |
|
|
| |
investment, the funds are wired to the closing attorney to be held in escrow. After the closing, the lender will receive a Promissory Note from you (either personally, from your business entity, or both), a Deed To Secure Debt (mortgage) on the property, lenders’ title insurance, and listed as a mortgagee on the hazard insurance policy.
If no single investor can fund the entire investment, then piece several loans together by providing the largest investor with a first position mortgage, and each smaller investor a progressively subordinate (2nd, 3rd, etc.) mortgage. Typically, we pay an additional percentage on the interest rate to entice investors who accept subordinate positions.
The advantages of private lending are that there is a minimal approval process, and so availability of funds is quick. You pay interest only, instead of also incurring a loan origination fee commonly known as “points”. You are never constrained by arbitrary rules as to how many mortgages you can have in your name. In fact, none of these mortgages ever show up on your credit report. In turn, the private lendor receives a higher interest rate with a very secure investment. Everyone wins!
Now you may be wondering how many people you know really have $75k -$100k -$150,000 just lying around ready to invest. More than you think - and most of them don’t even realize it! That’s because the money is tied up in their IRA’s which they believe can’t be accessed until retirement. That’s only half true. They can’t personally withdraw the money without suffering penalties; but they can invest their funds (and receive your interest tax-fr ee! if it's a ROTH IRA) if they rollover into a self-directing IRA.
A self-d |
|
| |
|
|
| |
previous |
1·2·3·4 |
next |
|
|
