Private Money Lending
Maybe you’ve never heard of private mortgage lending, or you’ve heard of it, but haven’t been able to find information about how it works. That’s because, even though tens of thousands of Americans are already investing in private mortgages, hardly anyone talks about it. And there’s a reason for that: there are a lot of people who don’t want you to know about this investment option!
Lest you think that this is about to become some paranoid, there’s-a-conspiracy of-silence rant, let us explain.
Your investment advisors, retirement plan custodians, and securities brokers won’t tell you about private mortgage lending for a very simple reason: it’s an investment that you make without their help. There’s no “load,” no brokerage fee, no override–and therefore, no way for them to make money. Private mortgages are made outside the “system”–and, as you know, the “system” is how those folks profit.
Your banker doesn’t want you to know about private mortgage lending. That’s because, as a private mortgage lender, you are a competitor for the most profitable product a bank offers–and a dangerous one, at that. As a private individual not bound by all the rules, policies, traditions, and time frames that banks must follow, you can make loans more quickly, more easily, and more flexibly than a conventional lender. This makes you far more attractive than any bank to a certain type of high-volume borrower–and makes you the lender of choice for some of the bank’s best customers.
And your friends and acquaintances whom are already investing in private mortgages don’t really want you to know about them either. That’s because they perceive that there’s a limited demand among borrowers for these types of mortgages. If you jump on the bandwagon and start making these profitable, safe investments, there won’t be enough to go around for them. But trust me; the demand for private mortgages is practically bottomless–and largely untapped.
A private mortgage is simply a loan made BY an individual (or privately held entity) TO an individual (or privately held entity) for the purpose of purchasing, refinancing, or renovating a piece of real estate.
If you’ve never made a private mortgage loan, it might help you to think of yourself as the “bank,” and your borrower as the “customer.” When your banker makes a mortgage loan, these are the steps she takes:
- She makes a call to order an appraisal to make sure that the property that will secure the loan is worth as much or more than the amount of the loan.
- She makes a call to a title agent to order research to make certain that the title to the property is clear.
- She makes a call to his attorney to order paperwork that documents the terms and conditions of the loan.
- He sends funds in the amount of the loan to a closing or escrow agent to complete the transaction.
- She sends funds in the amount of the loan to a closing or escrow agent to complete the transaction.
- After the closing, the closing agent sends her a copy of the recorded mortgage (or, in some states, the Deed of Trust) and the note.
- She sits back and waits for the payments to come in.
At IRA Real Estate, LLC we’ve helped many clients “super-charge” their retirement incomes using PRIVATE LENDING. Let us help you. Call our office to find out more.
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