- Private Lending Program:
- Lender Tesimonials
Private Lending Program Frequently Asked Questions
Who Borrows at High Rates and Why?
Investors like us do, because we have learned in our business that it’s not the cost of money that matters, but quick access to funds so we can capitalize on opportunities. Our company can acquire good deals in 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 high interest rate is irrelevant when compared with the risk of losing the deal.
What’s the minimum investment?
For a secured loan, the minimum investment is 20% of the purchase price.
For an unsecured loan the minimum investment is $15,000.
Who handles all of the details?
We do along with our attorney. It’s our job to get you the proper documentation and protect your interest. All of this costs you nothing. We pay any and all attorney fees associated with your investment. If you make a $100,000 loan, you wire or write a check to our attorney for $100,000 and you get a mortgage for $100,000.
How do I get paid?
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 also the preferred way for our company as well. However, if you are investing from a HELOC, and would prefer either quarterly or monthly interest only payments, we can do that too!
What is the length of this investment?
Generally, your investment is associated to a specific project with a timeline ranging from 3 to 12 months. However, we also have longer term holds of one year and longer. You can discuss with us what better suits your investment strategy. It’s your money, and, therefore, your choice.
What are the typical loan terms?
We generally offer 12% interest, accumulated monthly, with principle and interest paid out at the sale of the property. Depending on the flexibility and amount of your loan, we can also offer points. We offer a 3 month guarantee which means that if we turn the property over in under 3 months, you still get paid three months worth of interest! We also offer 1-3 points for short term financing! We also offer a referral program where we pay a 1% referral fee!
What types of funds can be used for a private money loan investment?
A variety of fund sources can be used. Some typical ones include:
- Retirement Accounts (IRA’s, 401k’s, etc.)
- Liquidated Securities and Investment Assets (stocks, bonds, mutual funds, CDs, etc)
- Home Equity Lines of Credit
- Personal and Business Credit Lines
- Credit Partners
- Savings Accounts, Checking Accounts
Is my investment really as safe as it sounds?
Yes! We always follow the stringent property purchasing guidelines as discussed earlier. Your money will grow two, three, or even four times faster than your current investments.
Each one of our properties that we acquire is put through a rigorous financial evaluation in order to determine the profitability of the project before the property is ever purchased.
Your loan portfolio can truly be hassle free and produce staggering yields!
But don’t take our word for it, take a look at our testimonial page to see what some past investors have to say
Why would I choose this investment over other traditional investments?
- The stock market is unsecured and uninsured.
- You invest at market price
- Returns are unknown and not guaranteed
- Investment is secured by a Deed of Trust or Mortgage Deed
- Collateral is Fully Insured
- Collateralized Below Market Value
- Returns are Fixed and agreed upon
- Tangible Asset
How do I use my IRA’s or pension plan?
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 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 a few documents, sit back, relax and wait for your money to grow tax free or deferred!
What are my options if Opening Doors, LLC doesn’t pay?
Actually, there are several options but first and foremost, please be aware that “Integrity” is an essential part of our business and we only make sound investment decisions. One of Opening Doors, LLC’s distinguishing features is that we have never been late on a payment to a private lender.
Additionally, our company’s policy is to invest our own funds into our projects because if we aren’t confident in our investment decisions, why should you be? Likewise, 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:
- We could restructure the payment schedule on the note. For example, let’s say we are behind on payments to you. Now Opening Doors, LLC can and would like to keep the house, but they 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 principle 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.
- Have Opening Doors, LLC deed you the house. This is an opportunity for you to get a house at a greatly discounted price. When this happens, you can create tremendous profit by reselling the house.
- If left with no other choice, you can simply foreclose. Foreclosure is not 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.” 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 principle balance, and all attorney’s fees, court costs, and all other expenses you have incurred in connection with your loan.
If you wind up with the house, that doesn’t mean you have to keep it. It can be sold immediately at a fair price and still produce a profit over and above the already high yield on your loan.
Now we’ve talked extensively about default and maybe we’ve provided more information than is necessary, but we wanted to make sure you have all the facts and we’ve answered any potential questions.
What kind of documents will I receive with my secured loan?
- 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.
I hope we’ve enlightened you on the incredible power of making private mortgage loans. If it appeals to you, you can get started 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 return of 12%!
Are you ready to take action?
You could either make an investment decision where you only get a return that barely keeps up with inflation, or you could make a decision that will help you make high, guaranteed returns that will help you not have to worry about money when you are ready to retire. Even if you are already retired, here is a great opportunity to squeeze every interest dollar out of your savings that you can. Private lending is an incredible way to build wealth in a way that most people aren’t aware exists. You are now part of that special group of individuals who are aware and educated about a better way to invest your money. The only step that is left is to take action. If you have any questions, please do not hesitate to call us at 860-877-HOME or contact us via email at info@OpeningDoorsLLC.com.