Discover how to make 15% return on your money safely and secured!

Are You Expecting Social Security To Provide Your Retirement?

If the answer is no, and I’m sure it is, please pay very special attention because the following information could make you thousands of dollars in the coming years simply by increasing the yield on the same money you’re investing now and totally eliminate the need for social security.

As you already know, we are professional and qualified Real Estate Investors who buy several houses a month throughout the tri-state area and I’d like to spend the next few minutes talking to you about a way you can control your investments and safely make them grow at three to five times your current rate. Yes, I know it sounds too good to be true, but it isn’t. What I’m going to share with you is very common in real estate circles and has been going on right under your nose in every city in America .

Dear Friend,

Smart people have been utilizing this investment for years. In fact ……….

There Have Been Entire Companies Built Around This Investment and Those Who Do It Properly Have Grown to Huge Proportions.

This is a very safe investment that produces high yields while at the same time providing security and liquidity.

Do you know what $25,000 is worth in five years compounded at a 7% yield? It’s worth $35,000. But now let’s take that same $25,000 and invest it for the same five years at 15% interest instead of 7%. Now it’s grown to an amazing $52,000. That’s a $17,000 Difference Simply by Upping the Yield from 7% to 15% and Remember...

That’s Only Five Years.

Take a look at the following charts……

5 Years

Amount	7%	15%	Net Increase
$10,000	$14,176	$21,071	$6,895
$25,000	$35,440	$52,679	$17,239
$50,000	$70,881	$105,359	$34,478
$100,000	$141,762	$210,718	$68,956

10 Years

Amount	7%	15%	Net Increase
$10,000	$20,096	$44,402	$24,306
$25,000	$50,241	$111,005	$60,764
$50,000	$100,483	$222,010	$121,527
$100,000	$200,966	$444,021	$243,055

20 Years

Amount	7%	15%	Net Increase
$10,000	$40,387	$197,155	$156,768
$25,000	$100,968	$492,887	$391,919
$50,000	$201,937	$985,774	$783,837
$100,000	$403,387	$1,971,549	$1,567,712

Take Control of Your IRA, Pension Plan, Savings or CD’s

Earn 15% Instead of the Average 4-7% Interest

If you expand it to a ten year term your $25,000 would be worth $50,000 at 7% but if you change the yield to just 15% it grows to an unbelievable $111,000. That’s $61,000 free dollars you will actually receive simply by increasing your yield. Can you really afford not to control your own investments? Does it make sense for a bank or stock broker to run your investments for you? They would like for you to believe it does.

Well, there is an alternative for you to consider. That alternative is……

Private Mortgage Loans

You can loan money, secured by a first or second mortgage or land contract that will not only give you the safety you want but will also give you the high yield we’ve discussed.

Let’s discuss the pros and cons of loaning to homeowners.

First, let’s clarify what kind of loans. I’m not talking about high loan to value loans the banks make. What we’re dealing with here is very low loan to value loans. By that, I mean no higher than 70 % of the value of the property securing the loan. In most cases though, the loan to value is a lot less. This means if a house appraises for $60,000, you wouldn’t make a loan for higher than $42,000. That’s a 70% loan to value. It’s obvious why this is a much safer approach than most lending institutions take. The banks make loans at an 85, 90, or even 100% loan to value ratio. They just don’t have any cushion in case of default. On the other hand, when you are dealing with a 70% maximum LTV there is so much equity above your loan that if you ever had to foreclose; the property could be sold not only for enough to cover your investment but quite often at a huge profit. So in other words,

If You’re Real Estate Oriented, This Is Just Another Avenue of Income For You and If You Aren’t Real Estate Oriented…….

There are Always Scores of Investors Who Would Love to Have the Property for 50% to 60% of The Value If You Took it Back.

Now, I’m doing a lot of talk about default here, but in reality when the loan is at such a low loan to value ratio, default is not common.

Let me see if I can answer some of the questions you may have about making loans.

Is This A Mortgage Pool?

No! You make the whole loan yourself. You get a lien against the property. You are the bank. You are in total control.

Do I Need a Lot of Money?

No! I have made loans as small as $5,000. The amount of the loan is determined by the borrower’s needs.

Who Handles All of the Details?

Well, we believe that unless you are highly skilled in real estate matters, you should use a good Real Estate Investor. They will not only find the borrowers for you, but it’s their job to get you proper documentation and protect your interest. All of this costs you nothing. All costs are paid by the borrower. If you make a $10,000 loan, you send a check for $10,000 to the closing agent and you get a mortgage or Deed of Trusts for $10,000.

Do I Have to Collect Payments?

Absolutely Not! Your Real Estate Investor will set up your account with a collection agent, if you wish, who will collect each payment when due and deposit it into your account. This can and should be a hassle free investment. In fact, I strive to keep my investors as far away from collection as possible for that reason. You may be surprised to know that your bank will even collect the payments for you if you wish.

Is This A Long Term Investment?

No! It can be any term you want. You’re the boss. Usually a private investor wants a five-year term or less, but some don’t care if it stretches to ten or fifteen years. You can pick a term that suits your strategy for retirement. Some investors make interest only loans with a short-term balloon, some will amortize for ten or fifteen years and balloon in five, and some people prefer the longer term. It’s your money and it’s your choice. Of course, the broker is going to come to you with a term that suits the borrower. If that works for you, it’s a go. If not, it’s up to him to change your mind, or to find another investor.

What If I Want To Liquidate?

Mortgages and Land contracts are purchased every day like stocks. If you want out, it will take from two weeks to a month to sell your note. Since your interest rate will be 12-15%, you will take very little, if any, discount when you sell. You really shouldn’t make mortgage loans if you feel you will liquidate shortly, but the option is always available. Just call, and we will handle all of the details.

Who Borrows At High Rates?

All kinds of folks! Some with good credit, some with poor credit. Some are owner occupants, some are investors. These folks have learned that…

It’s Not the Cost of Money That Counts, but the availability!

In the case of an owner occupant, they may not qualify under bank terms for any number of reasons (i.e. Poor credit, time on their job, debt ratio…). In a lot of cases, they would qualify, but just don’t want to deal with the banks. They would rather pay the high rates in exchange for the ease of getting the money.

This also holds true for investors but I have made it possible many times for investors to acquire good deals in houses because the funds were available from private lenders that would not be available from banks. If an investor can get good at locating good deals, the bank wants to loan on the purchase price not the value of the house, thus penalizing him for being an astute investor. Having the money available will make or break the deal and paying a higher interest rate is irrelevant, compare to…..

The Loss of Thousands of Dollars in Profit

If the Money Weren’t Available.

Remember, you as a lender won’t lend more than 60 to 70% LTV regardless. You’re making a safe loan in either case whether it is an investor or an owner occupant. You should never make a loan without a minimum 30-40% safety net. If you don’t violate that rule, you should always come out a winner.

What Are My Options If My Borrower Doesn’t Pay?

Actually, there are several options in the event of default by your borrower. Foreclosure is only one of them and usually the last on the list.

The first thing you could do if your borrower's problem is temporary is restructure the note. For example, let’s say your borrower was out of work for three months and was behind on his payments to you for the previous two months. Now he finds a new job and would like to keep his house, but he can’t come up with enough money to bring you current in one lump sum. You could let him continue to make regular payments and make an extra payment on his arrearage in addition, or you could simply add the arrearage to the principal balance and extend the term of the loan. This means you would be collection interest on interest for the entire remainder of the loan. There is almost always a way to work it out if both sides are willing.

Incidentally, when this happens, some of my lenders will charge a reinstatement fee as well as the back payments. Remember, it’s up to you whether to even let your borrower reinstate or not. Once they are in default, you have the right to call the loan due or allow reinstatement. It’s your choice. You don’t have to take the payments unless you want to. Therefore you are well within your right to pick up an extra one, two, or three hundred dollars to allow reinstatement, especially if you elect to add it on the loan and don’t force the borrower to pay it in cash which, of course, is also your option. At this point you are in total control.

Of course, you would only allow a reinstatement if the borrower has solved his problem and can continue to make payments.

If that’s not the case……..you have other options.

You can offer to buy the house from your borrower in lieu of foreclosure. This is an opportunity for you to get a house at a greatly discounted price and avoid foreclosure at the same time. Your borrower has the option of either taking some money now and selling you the house or being foreclosed out and getting nothing. When this happens, you have created a tremendous profit center by reselling the house. Some investors make private loans in hopes that this will happen and some would rather not get involved with the real estate at all.

Whichever You Are…..You Win.

Like I said earlier, when you can sell a house at 50 – 70% of its value there are scores of investors who would take it off of your hands. In fact, there are businesses built around tracking down these kinds of deals.

If you have an uncooperative borrower and you can’t restructure or sell, then you are left with either selling your note or foreclosing.

Yes, there are investors who are willing to buy your note, even if it’s in default. In fact,

That’s Why They Want It!

They can either force payment of debt or get the house. However, if you sell a note in default, you will usually have to discount it so this isn’t my favorite option.

If left with no other choice, you should simply foreclose. Foreclosure isn’t the evil, time consuming, costly legal process that most people think it is. It’s as simple as sending your note to an attorney and saying ‘do it’. All you have to do then is sit back and wait. Nine times out of ten, before foreclosure is complete, someone will be calling your attorney’s office with a payoff letter, and your loan will get paid off. When this happens, you will collect all accrued interest, your principal balance, and all attorney’s fees, court costs, and all other expenses you have incurred in connection with your loan.

You see, when you’re into a property at 50% or less, there are always lenders who will refinance, relatives who will bail them out, or scores of buyers who will buy them out.

In the event that none of this happens, you will get the house in which case you will have the options we discussed earlier.

What if My Borrower Files for Bankruptcy?

You have a lien against the house. You cannot be wiped out by bankruptcy. If your borrower files Chapter 7, you should be able to continue with the foreclosure process. It will be slowed down, but it won’t be stopped. You have a secured debt and a right to seize the asset. If Chapter 13 for reorganization is filed, your borrower will be organized to continue with his monthly payments and probably an additional payment on his arrearage. In the event that one payment is missed, you can then proceed with the foreclosure process and usually, within 30-60 days the process will be complete.

Bankruptcy will slow the procedure, but not keep you from collecting your debt.

What Happens if I Make a Second and the First Doesn’t Get Paid?

If you are in second position and you aren’t getting paid, chances are that the first is in arrears, also. In that case, to protect your interests, you would simply bring the first current while taking collection action on your second.

You Must be Notified of Any Foreclosure Action by the First in Most States

You’ll have plenty of time to react. Remember, any money you advance, you are entitled to collect as a part of your debt. That includes any payments that you make on the first. Part of your closing package, if you’re loaning on a second is a mortgage verification on the first. This will include all of the loan information and the current status on the loan.

Frequently, small seconds are made to people who are in foreclosure for just enough to bring it current. Obviously, this loan stands a much higher chance of going into default, so if you’re an investor who is not real estate oriented, one who would really rather not own the property, you wouldn’t want this kind of loan. On the other hand…..if you see owning the property as just a larger profit center then you might consider specializing in foreclosure loans.

What a lot of investors tend to forget is that just because you wind up with the house doesn’t mean you have to keep it. It can be sold immediately at a fair sale price and still produce a profit over and above your already high yield on your loan. There is no law that says your have to be a landlord and deal with tenants, just because you own the house.

Now, of course some people will say that you are taking advantage of people in trouble. If that’s how you feel, then don’t make loans to people in foreclosure. Let them stay in foreclosure and lose their house.

Heaven Forbid We Ever Get Accused of Taking Advantage.

Just remember, they were in foreclosure long before you came along. You had nothing to do with that. Also remember, that you are probably their only hope of saving their home. When you bail them out of a foreclosure, they agree to make you payments on the money you loaned them. If they do, you’ve supplied them with a valuable service they won’t get anywhere else. If they don’t pay, are they any worse off than they were before you made them the loan?

You Decide!

If you are going to make loans to people in foreclosure, let’s not forget the basics. They must still be low loan to value with plenty of equity cushion in case of default. Common sense still prevails.

On the other hand, it doesn’t hurt to get a little creative sometimes. For example, what if someone comes along with a house that is worth $70,000, they owe $50,000 on their first, and they need $4,000 to stop foreclosure? Under normal circumstances you wouldn’t make the loan because the LTV greatly exceeds the 50-60%. Now let’s suppose that this family has another house with a lot of equity in it that they could use as collateral or Mom and Dad were willing to put up their house as collateral. This would put you in a very secure position and insure your repayment. It’s as simple as getting enough collateral so you feel comfortable you will collect one way or the other. Whichever way, you win first.

What Kind of Documents Should I Receive?

Your closing package should contain the following:

°	An original note
°	A copy of the mortgage or land contract. The original will be recorded and then sent to you.
°	A fire insurance endorsement naming you as mortgagee.
°	An assignment of rents allowing you to collect rents in case of default. This should be done even if owner occupied. If the owner moves out and rents, you don’t want him collecting rents while you are foreclosing. This document gives you the right to start collecting immediately upon default.
°	A first mortgage verification ( if you’re making a second)
°	A title insurance policy for the amount of your loan insuring you against any title defects.
°	A recent comparative market analysis (CMA) of the property

Some lenders like to have a termite report, as well, to insure there is no serious damage under the house or live infestation. If the damage exists, money could be put in escrow for the repairs and be released to the contractors upon completion.

Are There Other Avenues of Income from Loans?

Yes… We’ve talked about reinstatement fees and making money with the property if you get it back, now let’s discuss some other goodies that occur when the loans are repaid as agreed, which is most of the time.

Another nice income comes from prepayment penalties. This is a penalty that is incurred when a loan is paid off early. It’s commonly used by finance companies and small lending institutions as another profit center. This penalty can be a percentage of the unpaid balance or several months interest on the unpaid balance. For example, the note could be worded that interest in addition to the regular interest. This can amount to a lot of money for a lender because

These Loans are Almost Always Paid Off Before They Expire

If you are receiving a three month interest penalty on a $20,000 loan at 15% interest, we are talking about an extra $500 over and above what you’re owed.

Yes this is legal, and no it’s not usury in most states. Check with your attorney or Real Estate Investor to make sure you don’t cross the line on prepayment penalties.

Is My Investment Really as Safe as it Sounds?

Yes! As long as you’ve followed the guidelines that we’ve talked about and apply common sense. No, mortgages aren’t as hands off as mutual funds or stocks or other kinds of non-participation investments, but in return for a little effort on your part, your money will grow two, three, or even four times faster than your current investments and in addition, you maintain control.

If you follow some simple guidelines when making loans your risk will be minimal at best. Briefly, these guidelines are:

1	Make only low LTV loans….no exceptions! A CMA will confirm the value.
2	Get title insurance for the amount of your loan
3	Have professionals close the loan
4	Make sure fire insurance is maintained on the property at all times.
5	Take action in case of default immediately!

Remember, 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. Also remember, all costs are to be paid by the borrower….not you!

How Do I Use My IRA’s or Pension Plan?

Making real estate loans is an approved and widely accepted use for IRA’s and Pension Plans. Think of it, now you can not only loan out money that has been unavailable for use, but you can make it grow rapidly….Tax Deferred!

Since Uncle Sam isn’t taking a bite out of your profits until you draw out the money, more money is left in the account to compound and grow. The results are staggering. You’ll be receiving interest on interest on interest and…

In order for you to use retirement accounts for loans they must first be administered by a “Third Party Administrator” or TPA. This TPA is set up and approved to administer your loan activities. This means you will probably have to transfer your plan to one of these TPA’s, unless, of course, your present administrator is set up to do that.

When your TPA is located, simply send the transfer form to them and they’ll do all of the work for you. Once you’ve done that…..

You’re Ready to Make Loans!

When you’ve selected a loan, you simply notify your TPA where to send the check for the gross amount of the loan and you’re in business. There should be no cast to you except your plan administering costs. Even your set up fee for collecting the monthly payments from your borrower could be collected at closing from the loan proceeds if you instruct your broker or closing agent to do so.

Some TPA’s will even collect monthly payments for you and deposit them into your account.

There are some restrictions when dealing with IRA’s such as self dealing, but you’re TPA will furnish you with all of the facts upon request.

If you have any questions regarding your plan or its administration, contact your Plan Administrator. If you need help transferring your IRA just give me a call. I’ve located the best in the country and I have all their forms in stock, so you can get going immediately.

Well, we’ve covered a lot in the short time we’ve had together. I hope I’ve enlightened you on the awesome power of making real estate loans. If it appeals to you, I can’t think of a better time to get started than right now. While most people are complaining about the low rates they are getting on their CD’s and other low paying investments, you could be receiving a bare minimum return of 12-15% all of the time…..

Not Just When You Get a Hot Stock

So what’s it going to be? Are you going to continue to let other people control your money so you can get a return that barely keeps up with inflation, or are you going to take control and make sure that when you get ready to retire, you can do what you want without worrying about money.

Mortgage lending is an incredible way to build wealth in a hurry that most people aren’t aware exists. You’re not one of those people who are uninformed anymore. If you have more questions give me a call. Perhaps we can get together for lunch or just chat on the phone.