In this article I will discuss some of the most common questions asked about investing in real estate. While I hope to answer as much as I can in this series of article, I am always open to answering more! If you have more please feel free to contact me with any other questions!
Who Borrows at High Rates and Why?
Investors like us do, because we have learned in our business that it’s not the cost of money that matters, but quick access to the funds so we can capitalize on opportunities.
Our company can acquire good deals in properties because we can act with lightning speed and can close with cash. Private loans give us this competitive advantage over other investors who take weeks to go through the bank approval process in order to purchase properties. Plus, lets be honest, have you tried to get a loan at the bank recently? It’s nearly impossible unless you are willing to sacrifice your first born child!
Additionally, if a real estate investor locates a good deal on a property, many times the bank wants to loan on the purchase price not the value of the house, thus penalizing the investor for finding a great deal. Having access to money is generally a deciding factor in investing in real estate, so paying a higher interest rate is irrelevant when compared with the risk of losing the deal.
Is my investment really as safe as it sounds?
Yes! We as investors always follow these common sense guidelines that we’ve talked about. Your money will grow two, three, or even four times faster than your current investments and you maintain control. Not to mention that if the house burns down its been insured which means you will at least get your money back! Can you say the same about stocks?
Each one of our properties that we acquire is put through a rigorous financial evaluation in order to evaluate the profitability before the property is ever purchased. By only investing in the relatively smaller number of houses that meet this rigorous criteria we are able to grow your money exponentially faster!
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.
How do I use my IRA’s or pension plan?
Making real estate loans is a widely accepted use for IRA’s and other Retirement Plans. Most people do not know that you can make private mortgage loans using the funds which are already in your IRA’s and other retirement plans. Think of the power of loaning out funds at high interest rates that are Tax free or Tax Deferred!
In order for you to use retirement accounts for loans they must first be administered by a third party custodian. One custodian we commonly work with is Equity Trust Company. You can visit them on the web at www.trustetc.com or simply talk to us and we’ll help you with the set up of your account.
After selecting your custodian, you simply send a transfer form to them and they’ll do all of the work for you. Once you’ve done that you are ready to make private mortgage loans.
From there, you simply notify your custodian about the investment you are looking to make and send the check for the gross amount of the loan. Even better, we can do all the work for you and you just sign few documents, sit back, relax and wait for your money to grow tax free or deferred like grass on a spring morning.