Generate Passive Real Estate Income As A Private Money Lender
FAQs
There are four key items that ensure the safety of your investment:
1. A promissory note stating the exact terms agreed upon, including a full amortization schedule.
2. A mortgage (security deed, deed to secure debt, or deed of trust) will be created by the title company to secure your investment. You will have a 1st position lien on the property, so we cannot sell it without paying you off first.
3. A lender’s title insurance policy will protect you against any title issues or claims that may arise.
4. A hazard insurance policy will be in place for your protection in case of an unexpected catastrophe or problem.
You have a piece of “Real Property” as collateral for this loan. If I do not pay you as agreed, then you can call your local real estate attorney to initiate foreclose.
Private lending is a transaction where private individuals loan funds to finance real estate investment properties. Investors receive comparatively high rates of return and have their investment secured by a 1st lien position with a Deed of Trust or Mortgage and Promissory Note.
Because all monthly payments are handled by a third-party servicing company, in the event of my death or business closure, these payments would continue until your loan is paid in full.
The servicing company will send you a statement on or before January 31st of each year which you can forward to your CPA or tax consultant. The statement will show how much interest you have earned for the year. It will be categorized as “Interest Income” and you will need to pay tax on it unless you are getting paid on money you loaned from your “Self-Directed Retirement” account.
Our average deal runs between $30-$50K, fully amortized at 12% over 60 months. We only work with one lender on each deal. If you are interested in working with us again after we close your deal, we can put you on our list for future opportunities.
Once you are paid in full at the end of 60 months, you will sign a Satisfaction and/or Quit Claim Deed to clear your lien against the title.
If, for any reason, our buyer does not pay us, we are still obligated to pay you. Your monthly payments are sent through the 3rd party servicer and would not be interrupted under any circumstances.
In the event our buyer defaults, we initiate the eviction process immediately. This process typically takes 4-6 weeks, after which a new buyer would be put in place.
We have self-funded several of our own deals, however, in order for us to scale, borrowing private money is necessary.
© Equity Pathway Properties, LLC