As you know, I have purchased many homes. The overwhelmingly majority of these properties were purchased with private funds loaned to me by private individuals just like YOU. I call this select group of folks, Private Money Partners. Ordinary people with money in an IRA, Certificate of Deposit or even in the turbulent stock market…who are earning little to nothing on their investment.
The premise is very simple: A Money Partner loans me money for a fair interest rate and he or she gets 1st Lien Rights on a property valued at least 25% more than they are loaning; the Money Partner either gets paid that interest rate or they get the collateral (the property) that they loaned against.
That being said, I have never given a property to a Money Partner instead of making payments. However,most of them go to bed each night hoping that I won’t pay, because they would win in an extraordinary way by getting a property for pennies on the dollar which would skyrocket their return on their investment.
What makes our program work for me, and for my Private Money Partners, is that the collateral property is worth at least $25% more than what the Money Partner loaned to me at the time of the loan. In most cases, the property is worth incredibly MORE than 25% of what they loan. This is NOT new to them. They just love sitting back and receiving that above average rate of return.
It is a very unique and favorable situation for both parties because at the end of the day everybody wins!
********************************* If you are reading my blog for the first time, let me inform you that… My company buys single-family houses and I write this blog bi-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, i.e. 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 we get the funding to purchase houses. And if they stick around long enough, they begin to understand why individuals partner with us to provide the funding which empowers us to be able to purchase real estate on a continual basis. Simple, it’s because we teach them a secured way to earn better rates of return than they are currently earning.
Request your FREE Education Kit if you are interested in learning how passively investing in real estate may help place you in a better financial position.
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).