Real Estate Investing

Buying Criteria:

• $1-$5 million purchase price

• Value Add Properties

• No more than 50% of studio / 1 bedroom units in multifamily properties

• Non Rural cities in TN, AL, SC, NC, GA, KY, TX

Private Lending

Rehab/construction loans

A construction loan is a short-term loan used to finance the building of a home or another real estate project. The builder or home-buyer takes out a construction loan to cover the costs of the project before obtaining long-term funding or selling the property. Because they are considered fairly risky, construction loans usually have higher interest rates than traditional mortgage loans.

• Construction loans are used for rehabbing a home or new construction for up to a period of one year.

• A budget is completed by the investor or builder prior to purchase.

• Funds are distributed for the purchase of the property at closing and then in construction draws based on the percentage complete.

• The borrower is only required to make interest payments on a construction loan based on the current balance while the project is still underway.

• After construction on the house or building is complete, the borrower can refinance the construction loan into a permanent mortgage or sell the property to pay off the construction loan.

bridge loans

Also known as interim financing or gap financing, bridge loans bridge the gap during times when financing is needed but not yet available. Both corporations and individuals use bridge loans and lenders can customize these loans for many different situations.

• A bridge loan is short-term financing used until an investor or developer secures permanent financing or removes an existing obligation.

• Bridge loans are short term, typically 6 months to 1 year. Interest is paid monthly or accrued until the loan is paid.

• Bridge loans have relatively high interest rates and are backed by collateral, such as real estate.

purchasing notes

A promissory note is a financial instrument that contains a written promise by one party (the note's issuer or maker) to pay another party (the note's payee) a definite sum of money, either on demand or at a specified future date. A promissory note contains the terms, such as the principal amount, interest rate, maturity date, date and place of issuance, and issuer's signature.

Promissory notes are debt instruments that allow companies and individuals to get financing from a source other than a bank. Some people sell their property and carry the note (provide financing) for the buyer.  In effect, they become the lender for the buyer.

Investing in promissory notes involves risk. After some seasoning, notes can be sold to other investors for cash much like a security.

Notes sell for a discount from their face value because of the effects of inflation eating into the value of future payments. This allows the note holder to raise a lump sum of money quickly, rather than waiting for payments to accumulate.

Advantages of Selling a Note Asset:

• Cash now instead of long-term payments

• Less risk- No worry of borrower getting behind

• No foreclosure proceedings

• No record keeping and collecting payments

transaction funding

Transactional funding is used for wholesaling real estate to conduct legal back to back closings (double close). This transaction protects the privacy of the deal with the original seller, and prevents either seller or end buyer from being tempted to try to cut out the investor.

Without funding, real estate wholesalers have had two options:

1. Pay cash and resell quickly

2. Assign the contract for an assignment fee

 Not every investor has the cash. Whatever cash they do have limits them on the amount of deals they can do.

In the past some investors double closed real estate deals using their end buyers’ funds. However, that is now illegal in many jurisdictions. You must now assign the contract or have two separate closings with your own funds.

Transactional funding solves this by giving investors the cash they need to close on the buy side, and allowing them to resell for a profit in a separate same day closing.

All you need is the end buyer lined up. You have to prove you have a cash buyer or a buyer who qualifies for financing.

Advantages of Using Transactional Funding:

• Funding 100%- no out of pocket expense

• More profitable than assigning contract

• No credit check, job, or income verification

• No insurance or appraisals

• No risk of deal falling apart

• No damage to personal credit

• Same-day approval

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