Private Lending for Real Estate Answers That Will Make You Smile
Welcome to our Q & A Page
What is a private lender?
Why would I want to do private lending for real estate?
Can anyone invest with your company?
In order to participate in the private lending for real estate program, you will be required to provide validation of your accredited investor status.
If I invest with you, who will handle my money?
What paperwork would I receive?
How would my investment be protected?
Now while your funds are still in the project you will have a promissory note and mortgage registered against the property. And if certain performance objectives that are set out in the operating agreement are not met, operational control of the asset can be had with relative ease. The property itself will have title insurance as well as adequate hazard insurance to protect it.
What happens if something goes wrong after I have invested with you?
I’ve never done private lending for real estate before. Does it involve a lot of work?
What are the steps involved in being a private lender?
1. The lender is provided with the details of the property
and given a Private Placement Memorandum, Operating Agreement and Subscription Agreement
2. The lender provides Simple Acquisition with accredited investor verification
3. The terms are negotiated and the lender is provided a promissory note
4. The official note and mortgage document are created with the Title Company or Attorney
5. The lender is sent the wiring instructions for the Attorney’s office (Escrow/Trust Account)
6. The property closes and the lender is given the lien security + lender’s name is added to the insurance policy
7. The lender is provided payment based on the agreed schedule and terms
8. The lender is provided regular updates on the property
9. When the property is sold or refinanced as per the exit strategy, the lender is paid back their initial capital and share in the profits when the property is sold.
10. The lender is provided the opportunity to participate in future deals and continue to earn passive income
Can I use my IRA or 401(k) to do private lending for real estate ?
How long will my money be tied up in your investments?
If I decide to invest in real estate with you; what will my money be used for?
How are you able to provide a higher return that my current investments?
We have also build many relationships with companies who control large blocks of properties and they are willing to discount the non-performing ones quite handsomely. And although there are many people who do private lending for real estate, the bulk of them use single family homes as their target, therefore not many people who are looking to purchase properties of this size so there is not much competition. The availability of cash is also a key to being able to take down great properties, and once we acquire a property we already know what we’re going to do to make it perform better and we raise the funds with that in mind and tackle doing those changes as soon as we take possession.
Will I be penalized if I need to pull out my money sooner than the committed time frame?
What is the minimum investment amount?
Will I receive monthly payments and interest?
It is important to note however that in the early stages of some projects, specifically the non-performing ones we target, that it takes some time to get it to perform, as a result, initially there may not be any disbursements. The projections for each acquisition is completely spelled out in our promotional documentation.
Do you guarantee my return?
What happens if the property burns down or is destroyed from natural events?
Will my money be pooled?
What is the economy goes south or the property is not performing as expected?
If something happens to your company what happens to my investment?
How do I get more information?