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1st National Bank of...You?
Have you ever thought about what a bank does?
Banks, Credit Unions and other "institutional" lenders don't actually lend their own money.
They take our money & lend it to other people. Here's How.
- First, they encourage us to deposit our money into their bank with the promise of a small, but safe, return on our money.
- Next they lend our money to other people at rates that are 3 to 10 times higher they are paying us.
- Lastly, they can offer a guaranteed interest rate to us because they do 2, very important, things before they approve a loan request.
- 1st they carefully analyze the loan request before releasing funds.
- 2nd they require the borrower to pledge something of far more value than the amount of the loan...ie: Collateral.
If you think about it, the bank is nothing more than a "middleman" between you & the borrower.
You Can Eliminate The Middleman
1st National Bank of You
Your money is working all of the time. The big question is... "is it working for you or is it working for the bank?"
Did you know that you can invest your money in extremely profitable and extremely safe investments by providing short term (6 months or less) financing for Real Estate in your own back yard.
The Bank's Loss is Your Opportunity
As you know, most banks are suffering today because they became careless in their lending practices. For nearly 10 years banks were lending to people that did not pledge enough collateral to protect the loan. They assumed that the rapidly rising property values would quickly create equity in the properties being used as collateral. This "home grown" equity would serve as the protection for the loan in the event of default.
This strategy worked for a while, but when the appreciation slowed & ultimately reversed itself, many banks failed. Those that survived stopped lending.
A Window of Opportunity
Now that the real estate market has settled down, there is a huge demand for financing among the Investment Community. Specifically, investors that specialize in renovating properties that have been abandoned, neglected or outright damaged by previous owners. These properties can be purchased at huge discounts by people that have "cash" and can close quickly.
If you have money in an IRA, Saving Account, CD, 401K, Stocks, Bonds or any other vehicle that is not providing the kind of yield and safety that you desire, you should consider becoming a Private Mortgage Lender.
NOTICE: I am not soliciting you for any particular project or investment opportunity. However, I am attempting to make you aware of an outstanding opportunity within your own community.
Here is an example of how this might work:
Typical Scenario
- Mr. Philip Houseflipper locates a property that can be purchased from the owner for $110,000.
- The property's After Repair Value is $200,000 (based on similar properties which have recently sold in the neighborhood)
- The property needs $20,000 in repairs & improvements
- Philip has the crew of "tradesmen" on standby ready to renovate the property
- Philips projects the time line for the entire transaction to be 6 months
- Philip obtains $130,000 at 15% interest from a Private Mortgage Lender
- Escrow records the Lender's "Lien" against the property
- The Lender is named as the "Loss Payee" on Philip's insurance policy
- Philip's crew renovates the property & the property is sold for $200,000
Let's look at the money
Sale Price: $200,000
Lender Funds: $130,000
Interest Earned: $ 9,750 (6 months at 15%)
Lender Payoff: $139,750
The Lender Earned $9,750 in only 6 months with...
- Low Risk
- The Lender only funded 65% of the property's value. The loan amount is $130,000 and the property's value is $200,000.
- The Lender deposits funds the loan directly into Escrow
- The Lender has a lien against the property. Upon resale of the property, the lender is paid (with interest) before anyone else receives any money.
- If the property is destroyed by fire or any other occurrence, the Lender is paid in full by the insurance company.
- If the property does not sell...it can be refinanced with a bank for up to 80% of the appraised value. ($200,000 x 80% = %160,000)
Many people have found Private Mortgage Lending to be an excellent way to replinish their retirement accounts which have suffered losses due to the economic downturn.
Did You Know?
If you have a 401k or an IRA, you can choose to "self direct" the investments made with your money. Private Mortgage Lending is a viable alternative for many people.
If you woud like to know more about this profitable form of investing, call us. We'll gladly answer your questions.
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