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Multiply Your Savings Through Private Lending

In order to be a successful investor in the long term, one needs to consider all players in the market that contribute to generating profit for every particular kind of investor. A corporate investment opportunity might seem like a safer option to some, while others might prefer lending to borrowers that are not part of the corporate borrowing landscape. There can be numerous reasons for a person to abstain from reaching out to a bank or a conventional institution that offers loans. These reasons vary from borrower to borrower, and each of those borrowers turns to private lenders as an alternate solution.

The idea is to lend your capital to another investor or a real estate fund managed by professionals and secure the said lending amount by a mortgage for the real estate property. Private lending offers any person with a savings account to gain substantial returns on their savings. If kept in a savings account, a person’s wealth can only stay secure and not achieve much more than that. Whereas by lending the same money to a private borrower, the wealth can not only multiply, but the real estate put in place of security is worth much more than the loan itself. Which makes private lending an even safer option than becoming a direct owner of real estate property. It averts the risks and increases the profit potential on your investment.   

Our company uses the funds from your self-directed IRA or 401(k) to extend loans to borrowers whom we find appropriately qualified. The borrowers we would recommend to you will go through intense scrutiny to make sure that your wealth will be secure with them and would be able to generate a profitable return on your investment.
Your wealth will be practically the most secure if you lend your wealth to a borrower against an asset’s value. This form of private lending is the most common among investors. You can choose the borrower as per your liking, depending on the asset they offer as security. Most private lenders would go for an asset that they have experience with, a kind of property whose value they can rely on and whose market ramifications they have experience in.

Private lending has risen to be an essential part of the real estate investment landscape and contributes to the career success of every long term real estate investor, be it directly or indirectly. It has become inevitable to stay oblivious to this side of the real estate landscape for the investors who are on the hunt for better possibilities at all times. The sooner an investor acquires knowledge on the subject of private lending, the more profit might be coming their way in the future.

Private lending is the ideal choice of investment for any investor looking to diversify their portfolio, which can be essential to sustain a long term profit prospect for any investor. Anyone with little to no experience in real estate investment can use the surplus from their income to offer private loans. Retirees who wish to make an investment that could generate a passive income should also consider this option. Either you use your income surplus or your retirement savings, private lending can offer a sizable return to your wealth regardless of the source of the wealth.

To become an independent private lender, one has to establish a business, then acquire insurance, then get muddled with lawyers and establish a corporate rapport and then you might be able to make some profit, but you can skip all those steps and reach out to us directly and become a private lender now!

How to become a private lender?

There are three essential components when it comes to private lending:
1. A lender: any investor looking for an unconventional and safe way to multiply his / her wealth or savings
2. A borrower: a party who is unable to secure a loan from a bank or prefers to borrow from a private lender for any particular reason
3. A ton of paperwork.

All you need to bring to the table is the first component, and we will take care of the rest. So, contact us today to widen your portfolio through a safe and guaranteed option of investment.

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How to Determine the Value of Your Real Estate Investment

Real Estate Investment

Please answer a simple question: How much time do you spend picking out clothes every morning? Usually, it’s longer than most investors spend doing the math for real estate investment analysis. Unfortunately, people select deals based not on analytics, but intuition.

Diving deep into the details of deal analytics may feel like a trip to jargon-town. Total return? Cash-on-cash return? NOI? Cap rate? Feeling bewildered? You’re not the only one.

In this article, we teach you how to determine the value of your real estate investment – the preliminary step towards conducting a real estate analysis. Different properties are valued differently. Evaluating a triplex the same way you assess a single-family home will lead to a wildly skewed figure. Here is what you need to know.

Single-Family Homes

Market comparables (comps) identify the value of the investment, single-family homes, etc. These comps are nearby properties demonstrating similar characteristics. They share variables like amenities, garage size, number of bathrooms and bedrooms, floor plan. Generally, a single-family investment home increases in value if a similar home nearby is also increasing in value – and vice versa.

Multi-Unit Properties

Larger investment properties – those consisting of at least two units, and especially those with over four, are valued and priced differently. The value is directly related to how much profit or income the property generates. It’s possible that an apartment building in a neighborhood where house prices are declining could increase in value.

You can’t compare your apartment building to others down the street to assess how much it’s worth. This is where real estate investment analysis comes in handy. There are several primary factors to take into consideration. However, appreciation and cash flow are the two most important variables. To put it simply, cash flow is the money left after every bill has been paid, and appreciation is referred to as the equity acquired as the value of property increases.

Since there aren’t many ways to estimate future appreciation without a crystal ball, it’s better to focus on the cash flow.

Collecting your information

Good financial analysis consists of feeding a bunch of information into a financial model and using its calculations to determine whether the investment is good or bad – and right for you. Be aware of these variables for the most comprehensive financial analysis of a residential property:

  • Property details – utility metering design, square footage, number of units, etc.
  • Purchase information – improvement costs or purchase price plus rehab, or total purchase expenses.
  • Financing details – loan or mortgage information, like closing costs, interest rate, down payment, and the total loan amount.
  • Income – rent payments along with any other income the property generates.
  • Expenses – maintenance costs, including maintenance, insurance, and property taxes.

Actual or Pro-Forma Data

Getting good data from your model needs accurate, reliable information. Remember: It is in the seller’s best interest to offer appealing, not precise, numbers. For instance, they may offer high rental income approximations or neglect to mention some maintenance expenses. It is part of the investor’s job to ensure you have the best available information.

Estimated – or pro-forma – data from the seller only kicks off the discussion. Determine the actual numbers before closing. Ask to see maintenance records, property tax bills, and previous years’ tax returns. Hopefully, the actual data resembles the pro-forma data. However, don’t be surprised if it doesn’t.

Don’t forget to check for a prospective surprise

Check for a surprise as well. For instance, when was the last time the property was evaluated for taxes? If it was a while ago, and values have substantially increased, it is possible that the taxes will increase and the property will soon be reevaluated. Even little changes to expense and income numbers can mean significant changes to your bottom line.

Where to look for data?

Confused as to where to track down the necessary information? Begin here.

  • The seller must make the property details available. For more detailed, comprehensive information, check with your local records.
  • Purchase information comprises any improvement or upfront maintenance work that must be finished before the property’s income potential is met. Have the property inspected to ensure that no hidden problems or issues exist.
  • Your mortgage broker or lender may offer financing details.
  • The seller directly gives the income details – but don’t depend on pro-forma data. You can also have a chat with the property management firm currently dealing with the property, if one exists, for this information.
  • The property Management Company or seller must directly offer expenses. A building inspector can notify you regarding any major repairs that may surface, like an HVAC system or a new roof.