Low Risk, High Reward Passive Investing
You’ve seen how unsure and volatile the stock market can be. Do you want your future to be controlled by the events that take place on the other side of the globe or by the greed on Wall Street that almost ruined the American economy in 2009?
Maybe it’s time to consider alternatives…Private Lending with the experienced professionals at EquityTeam!
Our Private Lending Partners (PLP’s) experience many benefits that traditional investments simply can’t match:
- Greater control over your investments
- More safety
- Higher returns
Smart investors have been utilizing this investment opportunity for years. This is a very safe investment that produces a high rates of return while at the same time provides higher level of security and liquidity.
Does this sound too good to be true? Well, the truth is, it’s not. Many private investors just like you are currently enjoying these rates of return with minimum risk IF they are working with experience and reputable professionals like EquityTeam.
If you’re like most of our Private Lending Partners, you probably have a number of questions about how it all works. Below are the most common frequently asked questions (FAQ’s) that we hear and our responses to each question.
When you’re finished reading the FAQ’s below, ask yourself:
“Am I ready to take action in order to get the returns I deserve so I can retire the way I want to? Can I afford not to take action or at least investigate this a little more?”
***DID YOU KNOW…If you are getting a 5% return on your investment, you’re really only getting a 1% return if inflation is 4%? What’s the average ROI you are getting on your investments when you take this into consideration?***
Allocation of Funds Example
Private lending is an incredible way to build wealth in a way that most people aren’t aware exists. You’re not one of those people who are uninformed anymore….
…but are you smart enough to contact us now to learn more before life gets in the way and you forget about this opportunity?
To get started on learning more, simply fill out the web form at the top of this page and one of our private lending specialists will be in touch with you shortly.
Private Lending FAQ’s
Q: What is a Private Loan and a Private Lender?
A: Loans secured by mortgages on real property which have been funded by private individuals and investors, like yourself, as opposed to banks or other lending institutions.
Wiki defines a “hard money loan” or private loan for real estate as:
“a specific type of asset-based loan financing in which a borrower receives funds secured by the value of a parcel of real estate. Hard money loans are typically issued at much higher interest rates than conventional commercial or residential property loans …
Many hard money mortgages are made by private investors, generally in their local areas. Usually the credit score of the borrower is not important, as the loan is secured by the value of the collateral property…”
We’ll summarize it as a loan from you to EquityTeam that is secured by real estate.
Private Lending Partners (PLP) as we like to call them, are given a first or second mortgage that secures their legal interest in the property and secures their investment. Unlike banks and other financial institutions that lend close to market value, we offer very low Loan-to-Value (LTV) ratios to our PLP’s to increase security of the loan. Our standard LTV ratios are under 75% of the value of the property securing the loan and frequently as low as 60%. This means additional security on the investment. You, as a lender, will never lend more than 75% LTV; or as an example, on a property that is valued at $100,000 you will only have a loan for $75,000 or usually less.
Q: Why EquityTeam for Private Lending?
A: Not to overstate the obvious but you should only trust your money to professionals with experience. Here are some reasons to choose EquityTeam:
- Experience – lending private funds to other investors; over $20 million funded
- Experience – with investment property – over 1,000 transactions
- Saftey – Our vast network, industry knowledge, and insistence on working with highly marketable properties so that we can implement MULTIPLE EXIT STRATEGIES
- Professional – licensed real estate broker, former licensed mortgage operations manager
- Network – EquityTeam and affiliated companies have a vast network of contacts that will handle all real estate matters including title, rehab, property management, etc.
Q: What kind of security should I as the lender receive?
A: Your closing package will contain the following:
- A copy of the mortgage. The original will be recorded.
- An original Promissory Note.
- A hazard insurance endorsement naming you as mortgagee.
These documents provide you with the security you need and the return which you desire.
Q. Why are these mortgage loans so safe?
A: Our loan amounts are very small when compared to the overall value of the property. This is called the loan-to-value (LTV) ratio. For example, a 50% LTV loan is a very safe loan, while a 90% LTV loan (like many banks offer) is more risky.
Q: Why do these loans offer such high returns?
A: Investors in real estate know 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 on 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.
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.
Q: But aren’t a lot of mortgages going into foreclosure right now?
A: Yes, but those mortgages are totally different than the kind we’re talking about here. We feature safer, premium investor mortgages, while the majority of defaulted loans out there today are risky, low-yield consumer mortgages…and there’s a BIG difference between the two!
Consumer Loans have dangerously high loan-to-value ratios of 95% to 110% or more, meaning the loan balances are very close to the property’s value or sometimes higher! And if that wasn’t bad enough, these consumer loans usually offer low interest rates of only 6% to 8%.
Investor Loans are much safer, because low loan-to-value ratios of 70% LTV or less means that the mortgage balance is always well below the value of the property securing it. But that extra safety cushion isn’t the only good news. Our investor loans are also more profitable than consumer loans, because we pay high effective annual interest rates of 10% or more.
Q: How much money will I need if I want to fund a deal?
A: At the very least we’ll want our PLP’s to have $30,000 minimum. We like to put one PLP with one property but there may be situations where we partner two PLP’s together on the same property with two mortgages. However, opportunities to fund these smaller loans are limited in quantity and tend to disappear extremely fast! Ideally, we’re looking for large capital partnerships
Q: Can I use my other investments to fund your deals?
A: Here are several possible funding sources you can easily use:
- Cash On Hand
- Self-Directed IRA’s, Pension Plans or 401k (with no penalties!)
- Signature Loans
- Friends or Family Members
- Home Equity Loans
- Personal Lines of Credit
- CD’s (as collateral for a loan)
Q: How do I use my IRA’s or pension plan?
A: 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.
This strategy can literally turbo-charge the growth of your retirement account, because you can earn unlimited tax-free (or tax deferred) profits with it every year! You see, even though you may have limits on how much you can contribute to your account every year, there are no limits on how much profit your account can earn!
Q: How long do these investments last?
A: We have lending programs for short term holds of three to six months. We also have longer term holds of one year and longer. You can pick a term that suits your strategy. It’s your money and it’s your choice.
Q: What are the downsides?
A: The only real downside is that we may not always have enough deals to feed our hungry pool of investors. Remember, your money isn’t working for you unless it’s invested, so there may be times when it’s lying dormant in your bank account, CD, or IRA just waiting for us to create another opportunity for your money to work for you.
Q: Can I see some examples of real deals you’ve funded in the past?
A: Sure! Please visit our testimonial page. Additional testimonials available upon request.
Q: Who handles all of the details and paperwork?
A: We will, along with our respected title company, American Homeland Title. All of this will cost you nothing. The borrower (EquityTeam) pays all costs. If you make a $100,000 loan, you send a check for $100,000 to the title company and you get a mortgage for $100,000.
Q: How do I get paid?
A: The majority of our investors prefer to receive a one time, principle plus interest payment after the completion of a project. For accounting reasons, this is a preferred way for our company, as well. However, if you’d like to be paid monthly or quarterly we can certainly accomadate that request.
Q: What are my options if EquityTeam, Inc. doesn’t pay?
A: Actually, there are several options but first and foremost, please be aware that “Integrity” is an essential part of our business. We have a 100% track record with our PLP clients. We’ve never had a PLP lose principal and for that matter, we’ve never had a PLP not receive every cent of interest they earned.
If we ever lose the support of investors, we can no longer operate our business and our own investments would be at stake.
However, to answer the question:
1) We could restructure the payment schedule on the note. For example, let’s say we are behind on payments to you and we can’t come up with enough money to bring you current in one lump sum. You could let us continue to make regular payments and make an extra payment on our 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 collecting interest on interest for the entire remainder of the loan. There are always ways to work it out if both sides are willing.
2) Have EquityTeam deed you the house so that you can control the asset
3) If left with no other choice, you can simply foreclose. Foreclosure isn’t as time consuming and costly of a process as most people think.
It’s as simple as sending your note and mortgage to an attorney and saying ‘foreclose’. 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 attorneys’ fees, court costs, and all other expenses you have incurred in connection with your loan.
Q: What if I need to liquidate?
A: If you want out, a 45 day written notice is required, because we will need to replace your funds with another investor’s money. You really shouldn’t make mortgage loans if you feel you will liquidate this shortly, but the option is always available and we have been able to liquidate in as little as two weeks in some scenarios. Also, unlike with a bank CD, there is no penalty for early withdrawal. Just call us, and we will handle all of the details.
Q: Why do these loans offer such high returns?
A: We are willing to pay premium interest rates to have capital readily available. We’re very good at finding and rehabbing investment property but we only have so much capital available. Our PLP program offers a win-win for us and the PLP.
Q: But aren’t a lot of mortgages going into foreclosure right now?
A: Yes, but those mortgages are totally different than the kind we’re talking about here. We feature safe, premium investor mortgages, while the majority of defaulted loans out there today are risky, low-yield consumer mortgages.
And there’s a BIG difference between the two!
Consumer Loans have dangerously high loan-to-value ratios of 95% to 110% or more, meaning the loan balances are very close to the property’s value or sometimes higher! And if that wasn’t bad enough, these consumer loans usually offer low interest rates of only 6% to 8%.
Investor Loans are much safer, because low loan-to-value ratios of 70% LTV or less means that the mortgage balance is always well below the value of the property securing it. But that extra safety cushion isn’t the only good news. Our investor loans are also more profitable than consumer loans, because we pay high effective annual interest rates of 10% or more.
Q: What are the downsides?
A: The only real downside is that we may not always have enough deals to feed our hungry pool of investors. Remember, your money isn’t working for you unless it’s invested, so there may be times when it’s lying dormant in your bank account, CD, or IRA just waiting for us to create another opportunity for your money to work for you.
Q: Okay. I’m seriously interested! How do I get started TODAY?
A: Fill out the web form on the top right hand side of the screen and put in the comments that you’re interested in being a PLP or you can call 513-258-2510!
