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Generating Wealth With Private Lending

Herrera Realty LLC. Generating Wealth With Private Lending. Agenda. Today, We Will Discuss:. Earning High Yields Secured by Real Estate While YOU Stay In Control of YOUR Money & Receive MONTHLY Payments. What Private Lending Is NOT!. STOCKS. BONDS. WALLSTREET.

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Generating Wealth With Private Lending

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  1. Herrera Realty LLC Generating Wealth With Private Lending

  2. Agenda Today, We Will Discuss: Earning High Yields Secured by Real Estate While YOU Stay In Control of YOUR Money & Receive MONTHLY Payments

  3. What Private Lending Is NOT! STOCKS BONDS WALLSTREET CERTIFICATE OF DEPOSIT

  4. What is Private Lending? aka... - Trust Deed Investing - Private Mortgage Lending - Private Money Lending “Private Lending" refers to a private individual making a loan to another individual with real estate as collateral. You Are The Bank Your Name Is On The Note and Deed of Trust

  5. Why Haven’t I Heard of This? Because WALLSTREET And The Financial Institutions Don’t Make Money From It!

  6. Benefits of Private Lending • Secured by tangible property • Safety - low risk • As long as there is value in the property, your investment is secure • Great returns • People are familiar with real estate investing because real estate ownership is so common. • Receive monthly payments

  7. Basics • Let’s assume we have a $500k house in the San Francisco Bay Area… VALUE: $500k PROTECTIVE EQUITY: $200K (40%) This is our “protection” - our cushion… LOAN: $300K (60%) We lend NO MORE than 60% of value…

  8. Why Would Someone Pay That Kind Of Interest…? IMAGINE THIS SCENARIO: You get a chance to buy a property worth $500,000, in today’s market, for $250,000. You have 5 days to close. The bank will only accept cash. Do you care if you pay 12% for 6 months if you can CLOSE on the deal?

  9. Someone WILL Pay Because… • Immediacy:Access to capital much faster than conventional lender. • Asset Based Underwriting:Borrower qualifications can be subordinate to the value of the property. • Timeliness:Conventional lenders are not fond of short term loans • Improvement Costs:“Rehab Loans” can include the cost to improve the property, increasing equity • Number of Loans: Traditional lenders limit number of loans

  10. How Does It Work? 5 STEP SYSTEM Remember: YOU ARE THE BANK Borrower Requests Loan and Submits Docs Our Broker Confirms Viability Investor Introduced To Project & Makes Commitment Escrow Opened & Investor Places Funds Our Broker Services Loan. You Receive Monthly $$$ DUE DILIGENCE INV PRESENTATION INV CONSUMATED

  11. What Does It Cost Me? Unlike Most Financial Institutions… No Investor Fees. EVER! So How Do We Make Money?

  12. Typical Investment • 60% LTV • 6 months to 36 months • 1st Deed of Trust • 7-10% Interest Rate • 1% Servicing Fee • Non-Owner Occupied, 1-4 unit Residential properties (mentioned before) • Properties within 100-mile radius of office • Rehab Loans for Fix & Flip deals

  13. How Am I Protected? Parties Involved That Protect Everyone: • Title Company: Issues title insurance • Escrow Company: Records lien against property • Licensed Appraisal: Values property • Licensed Broker: Documentation and laws • Foreclosure Company: Handle delinquency

  14. Every Investment Has Risk! • Almost all loans will have at least one late payment • The investor actually gets paid more for that because the borrower pays penalties. • A portion will turn in “default” • A smaller portion will go into “foreclosure” • Very few make it all the way to auction. Why? • Protective Equity! • The MOST important number to look out for in private lending is VALUE of property

  15. Private Lending vs. Stocks Private Lending • Great cash flow generator – and quickly • Use OPE (other people’s experience) • Use OPT (other people’s time) • Passive income • Relatively secure • Higher returns than stock market • Stocks • Not good for cash flow • Based on demand and supply – beyond your control • S&P 500 Lower returns • No collateral

  16. In Summary Private Lending is still one of the relatively safest investments you can make, offering you a high return with consistent, monthly cash flow.

  17. Conclusion Do you know someone who would like to take advantage of one of the greatest opportunities in our lifetime with low risk and high returns? Contact: Bill Herrera, Ph.D. at bill@herrerarealty.com

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