BYO Homes, LLC are always looking for private investors to help fund their rehab puchases. Please Contact us if you would like to become one of our partners. All loans are secured by real estate. We would rather give the great returns to you, than a bank.
What is Private Money Lending?
Let’s clarify what a private money lending is. It's a loan that you make to my company which we use to purchase single and multi-family real estate. Your loan is secured by the actual property that we purchase. That gives you the same security that a bank has for a mortgage. We deal with very low loan-to-value (LTV) loans. By that, we mean no higher than 30-70% of the value of the property is secured by the loan. Our typical LTV is 50-70%. This gives you additional security. We are buying multi-family houses that appraise for $300,000 for less than $150,000. That's a 50% loan-to-value. It's obvious why this is a much safer approach than most lending institutions take. Banks make loans at a 90-100% loan-to-value ratio. Banks do not have the same cushion we have.
You, as a lender, should never lend us more than 30-70% LTV regardless, thus you are making a safe loan. We will never violate this rule either! Contact us now to get the process started.
What is the maximum LTV ratio?
Our maximum loan to value ratio is 70%. We will not request any more money per property than 70%. This is your and our safety net.
How secure is my money?
We provide the same security expected by a bank. All loans are secured against real estate. We also never pool money. We have one mortgage per property. You will always be in 1st position.
What are the interest rates?
If we are paying monthly, quarterly or yearly payments, it is 10% interest. If the money accrues it's 12%. We set up payments for the 15th of the month. We typically set up the promissory note for up to five years because you have to have a term on the note. We also specify that you will be paid back in 5 years or when the real estate sells, which ever comes first.
Do you know what $100,000 is worth in five years compounded at a 4% yield? It's worth $121,665. But now let's take that same $100,000 and invest it for the same five years at 10% simple interest instead of 4% compounded. Now it's grown to an amazing $150,000! If we compounded it at 12% it grows to $176,234. That is over a 300% increase on a 4% compounded return. Contact us so you too can receive returns like this.
Do these loans pay down or are they interest only?
Typically the loans are interest only. That means none of the monthly interest goes towards your principal loan amount. This keeps more of your money working for you at these great rates of return. You'll make more money with an interest only loan.
Does BYO Homes have a minimum investment amount?
The minimum investment is $25,000 per contract.
Who handles all of the details?
We will. It's our job to arrange all the proper documentation and protect your interest. All of this costs you nothing. We pay all costs. Everything is done through our attorney. If you make a $100,000 loan, you send a check for $100,000 to our closing attorney and they hold it in escrow. We never touch the money. Once a property is identified the money is used at closing and you receive a 1st mortgage on the property. Also please note that we will not request any money to be deposited in escrow until it is needed just before the closing.
What kind of documents should I receive?
Your closing package should contain the following:
1) A Promissory Note.
2) Title Insurance to cover any title issues.
3) A copy of the mortgage. The original will be recorded and then sent to you.
4) A hazard insurance endorsement naming you as mortgagee.These documents provide you security.
What fees are involved?
No fees are involved. We pay everything.
How long does it take to put the loan together?
We generally ask for a minimum of two weeks from the time we review a project packet until closing, though we can close faster to accommodate special circumstances. All we ask is for a letter of commitment.
How often do you provide an update of interest earned to your long term private lenders?
We provide a quarterly update. We also provide our lenders with a spreadsheet so they can calculate their own returns.
How do I get paid?
Our Bookkeeper will set up your account. If we decide on 8% then just sit back and we will send you a monthly / quarterly / yearly interest only check for 8% of your investment. If we decide on the 12% option then you will receive 1 check for 12% + your principle once the property is purchased, improved and refinanced or sold.
What if I want my money back earlier?
If you want out, it will take from two weeks to a month. You really shouldn't make private money loans if you feel you will liquidate shortly, but the option is always available. And unlike a bank CD, there is no penalty for early withdrawal. Just call us and we will handle all of the details.
Is my investment really as safe as it sounds?
Yes! We follow these common sense guidelines that we've talked about.
Your money will grow two, three, or even five times faster than your current investments and you maintain control.
Remember that making loans is a business and should be treated like a business. If you set up a simple system and let the professionals implement the system, your loan portfolio can be hassle free and produce staggering yields. Also, remember, all costs are to be paid by the borrower, not you!
I have money in an IRA or 401K, how do I get it out without paying taxes?
We can direct you to a 3rd party company that will set-up your self directed IRA into real estate. It is a very simple process! You can then use your IRA money as a private loan. All the profits are returned to your IRA tax free. Below are link to companies that offer this service.
Equity Trust - www.trustetc.com
Guidant Financial - www.GuidantFinancial.com
Pensco Trust - www.penscotrust.com
How do I get started?
Just contact us and tell us when you're ready to get started making more money. We wlll take you to lunch or dinner so we can discuss the amount you have available to lend, the interest rate, and the length of the loan. Our job will then be to go out and find a property that matches your needs. When we do, you can either pass or play, and there is no obligation. You can arrange for the funds to be sent to our attorney. A closing will be set up at our attorney's office, and you can sit back and watch your investment grow. You'll get fixed returns that never change, that are safely secured by real estate.
Please complete the Money Lending Contact Form and let us help you make lots of money!
All information is strictly private and confidential
|
