Where Do We Get The Funds to Buy Houses? 

We are professional buyers of homes and income properties throughout Robeson and surrounding counties. My company can offer a homeowner or commercial property owner a fast, all cash sale when the price meets our buying criteria. We then borrow the funds needed for the deal from private lenders... always leaving a safety cushion of equity. 
       
Our private lenders get a higher interest rate on a note from us, secured by a recorded Deed of Trust against the subject property,  In addition to hazard insurance protection. 

We currently offer private lenders 9% to 11%. And they decide whether they want monthly income or have interest compound for a few years for compounding growth. The terms can range from 6 months to 10 years depending on the private lender's needs.

How Private Lending Works

    When we pay cash for a house, we usually include private lenders instead of using our own funds or loans from banks. Since we get a high return on our own cash, we can offer our private lenders a higher yield when we use their money to fund new deals. 

Maximum loan to value is 80%. That means we will borrow maximum $160,000 on a $200,000 property. The money we borrow is secured by a 1^st note and deed of trust (mortgage). Our private lender gets 9.00% interest. Monthly payments include principal and interest, or interest only, depending on the needs.

Interest only payments keep 100% of principal working. Most loans have a balloon payment due in 1 to 7 years. Whatever term that works best for the property and the private lender.

Sometimes we borrow offering a 2^nd deed of trust. For example, on a house worth $200,000, if there is a first mortgage for $100,000, then we can offer our private lender a second mortgage of (up to) $60,000. In the case of a second position, we pay 11.00%.

Let me illustrate how they enjoy bigger profits using an example of $10,000 invested for 36 months with compounded interest. 

• First, a bank CD paying 3% will grow to $10,940 in 36 months for a gain of $940. 
• Next, a Real Estate Note paying 11% will grow to $13,890 after 36 months for a gain of $3,890. Now that’s over 410% more money on the same amount invested!   What a difference!

For Each Loan
The Private Lender Gets..

• A Promissory Note
• A Deed of Trust recorded against the property
• Added on to the hazard insurance as the mortgagee
• A copy of any appraisals or market analysis reports
• Lender’s title insurance