As you know I have Money Partners which allows me to purchase single family houses each month. To date, I’ve cultivated many Money Partners and they keep me rolling in and out of inventory. I pay them a reasonable interest rate in exchange for a 1st Lien on the property I buy with their money.
IMPORTANT: I never let my Money Partners loan more than 75% of the value of the property at the time of the loan. In this current “Market” I’m averaging about 52% Loan to Value (LTV), one Money Partner per deal/property, close at an attorney’s office, provide mortgagees insurance, 3rd party appraisal, and proof of hazard insurance…all at $0 cost to the Money Partner.
When I offer my prospective Money Partners a 1st lien position with these types of LTVs and safeguards, it makes it a lot easier to persuade individuals to give me a try. What’s the worst thing that can happen? I get hit by a bus and they get to foreclose on a $100,000 property that they have $75,000 in? Well, that’s a pretty good worst case scenario - don’t you think?
************************* If you are reading my blog for the first time, let me inform you that: I am a guy that buys single-family houses and I write this blog weekly which is primarily directed to educate 1 group of individuals:
Individuals who are losing their shirt as a result of the “roller coaster” volatility of the stock market and low paying rate of other traditional investments…People that are looking for an opportunity that’ll provide a secured place to put their money to get it working for them to earn better than average returns.
However, often times, homeowners that need to sell their house, stop by to take a peek because they are curious and wondering how and/or where I get the funding to purchase houses. And if they stick around long enough, they begin to understand why individuals partner with me to provide the funding which empowers me to be able to purchase real estate on a continual basis.
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Disclaimer: This site is intended for educational purposes only. I am not an accountant, attorney or licensed financial planner. While the information I’m writing here is based on many years of experience buying houses that doesn’t really constitute professional advice (since everyone’s experiences and situations are different).