How to Invest in Private Loans
Because of the recent downturn in housing prices and the volatility of the financial market, there has never been a better time to invest in trust deeds. Not only do you get a 10% to 12% annual return; it is also one of the safest investments you can make short of an FDIC-insured savings account. Of course, as with any investment there is no such thing as a risk free investment, but South Wind Financial scrutinizes each deal to insure that each transaction adheres to our very strict standards.
Our Investment Criteria
- We only fund first trust deeds
- Each deal has a well-defined and viable exit strategy
- Investment returns of 10% – 12%
- Each property is purchased at market value or below
- We only work with borrowers who can demonstrate the ability to repay the loan
- We only offer short-term investments ranging between 6 months and three years
Due Diligence before Investing
- Market value and equity in the property and the security of the loan
- Borrower’s financial strength and ability to repay the loan
- Evaluate third party vendors and reports involved in the transaction
- Review all escrow and title reports, appraisals, property inspections
- Validate documents and instruments describing, evidencing, and securing the loan
- Set-up loan servicing contract, property tax, and insurance impound accounts, paid by borrower
- The protocol for recovering your investment if and when the borrower fails to pay
PRIVATE MONEY LENDING MIGHT BE THE RIGHT INVESTMENT FOR YOU. CONTACT US TODAY TO GET STARTED!
How Does Private Money Investing Work?
Trust deed lending opportunities are relatively unknown. However, through our networks, we can offer these investment opportunities more frequently. Minimizing risk is always a major priority during our due diligence. We look at each of these opportunities very closely to be sure they meet our strict standards before offering them to our investors.
Your investment is embodied in a Promissory Note secured by a First Trust Deed. Both the property and the title are insured against loss or claim through a title policy. Each property is evaluated and inspected through various methodologies if the loan request meets our criteria and the committee endorses both the property and borrower.
Simply stated, private money lending is the process of borrowing money from private lenders (not banks or financial institutions) at rates higher than banks or savings and loans and collateralized by real estate assets with a promissory note and deed of trust guaranteeing you a first lien on the property.
Who Can be a Private Money Lender
Investors: A private money lender might be someone that may not want to own rental or commercial properties or even manage tenants, but enjoy the minimal efforts of a trust deed investment offers them. One fantastic benefit, the 10% to 12% average returns on trust deed investments are much more attractive than most money markets and bank CD’s.
Retirees: Many retired investors have become private mortgage lenders to receive a consistent monthly income secured by a pledged real estate property that has significant equity. This can be an excellent cash flow for that retired individual. As a private investor, you receive a relatively high yield from private mortgage investments, which makes retirement funds last longer.
If you have at least $25,000 to invest in trust deeds, we would love the opportunity to show how you can also participate in earning annual return of 10% to 12% from your investment, at least $50,000 to invest and meet the qualifications of an “accredited investor.”
