PRIVATE LENDER PRESENTATION Be The Bank! Become A Private Money - - PowerPoint PPT Presentation

PRIVATE LENDER PRESENTATION

RE CAPITAL GROUP www.RECapitalGroup.net

Invest In Real Estate For Guaranteed Returns of up to 12% Annually Be The Bank! Become A Private Money Lender

What Is Private Money Lending?

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This is where an investor lends their money to a borrower for one or all of the following, related to real estate:

• Acquisition (to include purchase and closing costs)
• Rehab
• Improvements
• Costs related to management and holding of a property until

resale of the property

Any type of these loans are called Private Money Loans

Traditional Investing: The Difference

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THE TRADITIONAL INVESTMENT:

• Most people try to generate a retirement

income by letting people make decisions for them

• By the time they need the money, they

discover the money barely keeps up with inflation

Private Money Lending

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• Wealth with passive investments secured by

real estate offer a safe and very attractive return

• As an investor:

Think of this like holding a Bank CD

Private Money Loans

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• Decisions on the borrower are based on the

value of the collateral, not the borrower

• This makes the investment safe and passive

How Private Money Loans Work:

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• The Investor (you) provides a direct loan to a real

estate investor

• You lend your money to buy / rehab/ improve a

Residential or Commercial property

• The loan is be secured by:
• A Trust Deed on the property (as a short term 6-

12 month “Bridge Loan”)

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In our opinion,

• Private Money Lenders should only lend to

borrowers who want to buy and sell a property (flip it) for profit as these borrowers are in business to make money and are not emotional about the property

• Private Money Lenders should NOT lend to
• wners/occupants

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• You’ll lend money short term to the

borrower and charge the borrower interest for the use of your money they will use for the purchase and rehab of the property

• The percentage you charge is interest

earned by you!

• This interest stays stable and never

changes like the stock market

Replace The Bank:

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• If you have CD or savings in a Bank, you

are letting money lie around in a very low interest rate bank account

• Why not turn the table on the bank?
• Why don’t you become the bank?

You, The Lender

Third Party Escrow

Investors Escrow

You Transfer Money To The Escrow or Title company When The Buyer (Your Borrower) Closes Escrow At Close Of Escrow Upon Resale Of The Property, Funds Go Directly Back To Lender For The Amount They Lent For The Project – Plus The % Of Interest They Charged The Buyer

HOW IT WORKS IF YOU ARE SENDING CAPITAL DIRECTLY TO ESCROW

Escrow Holds The Closing Costs & Title Fees And Pays Out The Sales Commissions Escrow Instructs The Title Company To File A Trust Deed (Lien) Against The Property In The Lender’s Name Escrow Cuts A Check To Your Borrower For Rehab & Holding Costs Escrow Cuts A Check Directly To The Seller For The Purchase Amount The Buyer Rehabs The Property And Resells It

Private Investor Q & A:

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#1. Can I use an IRA or 401k to make loans or invest in real estate?

• YES! It’s your IRA, its self directed
• It is easy to accomplish and it’s only a

matter of moving it to an administrator of your choice

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You, The Lender

Third Party Administrator Third Party Escrow

Investors Escrow

You Transfer Money To Third Party Administrator The TPA Transfers Your Money From Your IRA Account To Escrow Escrow Cuts The Check Directly To The Investor Upon Resale Of Property Funds To Lender Go Directly Back To Escrow FBO Your New IRA Account At Closing Funds Go Back To TPA FBO Your IRA Account “Tax Free”

HOW IT WORKS IF YOU ARE USING A THIRD PARTY ADMINISTRATOR

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Making Loans with an IRA

• This is not a rollover with penalties from the

IRS - It’s merely a transfer from your current administrator to another Making Loans with a 401k

• If you were to leave your job, the 401k would

transfer to an traditional IRA -Then you can take control of the funds to start making private money loans

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#2. Do I have to have a license or something to be able to loan out this money?

• NO! These loans are a security so you’re not

going to need a license or have to register with the SEC

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• Only when loans are pooled does it

become a security that needs a license.

• Only when loans get pooled or loaned out

by multiple investors does it become necessary to have a license (there are exceptions to the SEC rules that you can fall within to pool your capital with others )

• Of course you can stick with each

individual loan where you are completely 100% in control

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#3. Do I have to do all the paperwork?

• NO! The Escrow company, Title company or

Attorney prepares all the documents for you and gets your borrower or investor to sign them.

• If you’re making a loan, they can record the

documents for you that need to be recorded (some do not get recorded).

• In this case, you would not cut the check directly

to the borrower, they would do this for you!

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• The real estate closing would be done by your

agent (escrow company, title company or real estate attorney), depending on your state

• The real estate closing agent would be

responsible to receive your funds and make sure all the documents are in place to secure your investments before they close!

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#4. Do I know what documents I need?

• Don’t worry, your escrow, title company or

attorney will handle the documents for you

• Always seek help from these professionals
• Make sure the following list is always

complete and all documents are there at the time of closing or no funds get released!

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Documents for your security

• Titled Insurance issued at closing naming

you, as an insured along with the investor

• Fire insurance with you on the policy, as an

insured

• The original note and a copy of the

mortgage or trust deed (the document that is recorded) will be given to you *Don’t worry - All the documents will be mailed to you by the closing agent

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#5. Can this be a long term investment?

• That is up to you and the borrower or investor
• Most loans are short term, repaid to the investor

within 6 months-1 year

• Whatever it takes to meet your and the

borrower or investor’s needs, and your investment plan After all, you’re the bank!

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#7. Is real estate a safe investment?

• If you apply common sense and don’t break the

rules, it’s as safe as any other high yield investment

• Private Money Loans in real estate are

generally safer and generate higher returns than the stock market or the rates you would receive on a Bank Certificate of Deposit account

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#8. Stock market VS Mortgage loans Stock Market

• You’re betting on companies you know little about and

the volatility of the market is out of your control

• Everyday you’re wondering whether you’re gaining or

loosing

Mortgage Loans

• With a loan your return is fixed and won’t change

regardless of whether the market is up, down or sideways

• Your loans are secured by real estate

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Remember, YOU become the bank!

• When you make a loan, you receive your return and

there’s no guess work

• You determine the interest rate – and the rule is:

the longer your money is tied up, the more interest you receive Examples:

▪ lend money for 6 months and receive 6% interest ▪ lend money for 9 months and receive 9% interest ▪ lend money for 12 months and receive 12 % interest

At the end of the term, you can take your principal + interest OR you can take your interest only and let the borrower keep your original investment to put into their next deal, earning you more money

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• Private Loans are great investments
• They are safe, with high returns backed by real estate
• You are not a slave to the ups and downs of the stock

market and you can reinvest to make continuous returns

• Remember, YOU get to look at the deal and agree to

the rules or you don’t invest

• You owe it to yourself to check it out and give it a try!

Build Your Wealth:

RE CAPITAL GROUP www.RECapitalGroup.net If interested in this investment opportunity, Contact: Cheryl Gollnick (951) 318-6420 cheryl.gollnick@recapitalgroup.net

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