There are multiple ways I protect my Private Money Partners. The closing attorney creates a mortgage, deed of trust or security deed (dependent upon the state) for them; which creates a lien on the property. Therefore, the property serves as collateral. I never borrow more than 75% loan-to-value on a 1st mortgage. Also there are a host of other security levels that we put in place that I will discuss in future posts.
We heavily screen and get a large down payment from tenant-buyers. We make sure the tenant-buyers pay on time and maximize the property value.
My tenant-buyers treat properties better because they have a feeling of ownership – especially because of large, non-refundable down payment.
************************* 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 well as their hair 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).