This information is to introduce you to INVESTMENT OPPORTUNITIES with our investment company. The company was started by Cindy Tolbert in January 2000. The principal business is the purchase and resale of single family homes and small apartment complexes in the greater Birmingham and Tuscaloosa areas. We also buy and hold the same type investments for monthly cash flow strategies.
The investment return is from 8% to 12% per year depending on the deal. A typical term will be 1 to 5 years. However, most of the time the property will be sold and your principle returned before the five year term expires. A longer term can be written if the Private Lender desires. There are NO commissions or “sales load” taken out of your investment dollars. Additionally, should you need to liquidate; we DO NOT charge an “early withdrawal fee”, as do many banks. We simply ask that you advise us forty-five days in advance, in writing, if circumstances require you to liquidate your investment. Your investment is secured by a first or second mortgage, on a single family home, in the greater Birmingham and Tuscaloosa areas. This is NOT a mortgage pool and the loan is from you as an individual or your retirement account to our company. You will own the mortgage on the property. The loan on any property does not typically exceed 75% loan-to-value, and in most cases, it is less.
Many times we will buy distressed properties, rehab them, and then sell them at either retail or on a lease option plan. The option term is typically one or two years. We then help the buyer obtain financing to cash us out. For these types of properties your money may be loaned out earning interest for as little as 4 months if we retail it or for several years if we provide a lease option to the buyer.
In some cases we buy properties and rent them out. Your investment could be left in place for as long as you like on this type of investment.
We use private money to help us obtain foreclosed and pre foreclosed properties if the spread allows us to make enough profit. In these cases your money will be earning interest from several months to as long as a year or two.
We use private money to put together various “quick turn” deals where the owner needs some cash for us to make the deal happen. In these situations, your money can be earning interest for various time frames.
Many Private Lenders like for their money to stay out earning 8% to 12% for as long as possible. Others like to bounce in and out of short term deals. However you want us to invest your money, we will try to accommodate you. We will always tell you the type of transaction you are funding and what the exit strategy on the property is before you invest your money.
We would welcome the opportunity to discuss this program with you, in person, or by phone at a convenient time and location for you.
Sincerely,
Cindy Tolbert, Manager
205-393-1554
Private Mortgage Loans
Do individuals or companies borrow at High Rates because they have bad credit?
What Kind of Loans Are Private Mortgage Loans?
What Type Of Loans Could Exceed 75% LTV?
Do I need a lot of money?
Who Handles All Of The Details?
Is this a long-term investment?
Is my investment really as safe as it sounds?
How do I use my IRA’s or pension plan for this investment?
What kind of documents should I receive?
What Do I need to do to get started?
I do because I have learned that…
It’s Not the Cost of Money That Counts
But the Availability. If a Real Estate Investor can get good at locating good deals on houses, many times the bank wants to loan on the purchase price not the value (after repaired value) of the house, thus penalizing him for being an astute Real Estate Investor. This keeps the investor from having the funds necessary to repair the property or prepare it for a decent profit in the future. Having the money available will make or break the deal and paying a higher interest rate is irrelevant compared to…..
The Loss of Thousands of Dollars in Profit
If the Money Weren’t Available.
Do individuals or companies borrow at High Rates because they have bad credit?
No…….not is our case anyway. Our Manager Cindy Tolbert has excellent credit and is willing to provide you with the documents proving this fact. As stated above we work with private lenders because we can get cash faster in order not to miss the great opportunities where we can make a good profit and you can too. Everyone wins!
What Kind of Loans Are Private Mortgage Loans?
Let’s clarify what kind of loan a private mortgage loan is. It is a loan that you make to a Real Estate Investor and in turn your loan is secured by the actual property that the Real Estate Investor purchases. That gives you security. I’m not talking about high loan-to-value loans the banks and savings and loans make on homes. We deal with very low loan-to-value (LTV) loans. By that, I mean no higher than 50 to 75% of the after repaired value of the property securing the loan if we are buying the property from the seller for cash. Our typical LTV is 60% to 68%. That gives you additional security. This means if a house appraises for $100,000, you would not make a loan above $75,000. It’s obvious why this is a much safer approach than most lending institutions take. The banks make loans at an 80%, 90%, or even 95% loan-to-value ratio. Banks just don’t have any cushion.
You, as a lender, won’t lend more than 50% to 75% LTV regardless when we are paying cash for the property. You’re making a safe loan. The reason this is safe is that the 25 to 50% cushion allows options such as dropping the price of the property to sell it to a bargain hunter thus improving the probability of selling it quickly. You should never make a loan without a 25-50% safety net in an all cash deal. I don’t violate that rule, so you come out a winner.
What Type Of Loans Could Exceed 75% LTV?
In some instances we will bring a loan current or give a seller some cash and take over their existing loan. This allows us to create financing that is very attractive for a new buyer. If we borrow money from you in these cases the loan-to-value may exceed the 75% we spoke of above when you combine the existing mortgage and the new second mortgage obtained from you. However, the amount you are lending is much smaller and so is the risk. A good example of this type of situation is finding a house where the seller needs to sell very quickly and just wants $5,000 of his equity to move on and the house needs carpet, paint, and some misc. fix up. We may need to borrow $10,000 to buy this house and get it ready for sell. The seller is given the $5,000 and deeds us the house and we take over their existing debt. In these situations there will always be equity in the house beyond the existing loans and we are able to sell the house in a variety of ways. This type of loan is very safe due to the options we have in financing the new buyer of this property. This type of loan is only used if an existing first mortgage can be taken over and you would still have a second mortgage on the property. Also, you will know if this is the type of deal we are doing and if you don’t want to lend on this type of deal we will do another type together that you do like.
No! I sometimes need loans as small as $5,000. The amount of the loan is determined by the deal.
Who Handles All Of The Details?
We will. It’s our job to get you proper documentation and protect your interest. All of this costs you nothing. I pay all closing costs. If you make a $25,000 loan, you send a check for $25,000 to the closing agent and you get a mortgage for $25,000. You will never send your money to me. You will also get a promissory note and proof of insurance naming you as the lender and first paid in case of an accident to the property.
I will set up your account. Your principle plus the interest you have earned will be sent back to you once the loan gets paid off. Note that we set your loan up as interest only so your entire investment keeps earning interest. If you’re retired and would like a quarterly or monthly interest only check, we can do that too! You could also arrange for your bank or another institution to collect your money.
Is this a long-term investment?
It can be but not typically. Usually we like for the loan to be a five-year term. If we are selling a home retail the term can be as short as 4 to 8 months. Most of the time a buyer of one of our homes that we offer under a financing program will obtain new financing within a two year period under that program. Some of our owner financing programs can stretch to ten or fifteen years but these are rare and you would know going in that this was longer than a five year loan. You can pick a term that suits your strategy for retirement. It’s your money and it’s your choice. We will discuss each deal and the term before you ever send any money. If we are forced to change the way we sell a house and it does not meet your investment needs from a term standpoint, you can always liquidate your loan to us.
If you want out, it will take from two weeks to a month. You really shouldn’t make mortgage loans if you feel you will liquidate shortly, but the option is always available. And unlike a bank CD, there is no penalty for early withdrawal. Just call and then notify us in writing, and we will handle all of the details. We request a 45 day notice.
Is my investment really as safe as it sounds?
Yes because we follow these common sense guidelines that we’ve talked about.
Your money will grow two, three, or even four times faster than your current investments and you maintain control.Remember that making loans is a business and should be treated like a business. If you set up a simple system and let the professionals implement the system, your loan portfolio can be hassle free and produce staggering yields. Also remember, all costs are to be paid by me, the borrower…., not you!
No! You make the whole loan yourself. You get a lien against the property. You are the bank.
How do I use my IRA’s or pension plan for this investment?
Making real estate loans is a widely accepted use for IRA’s and Pension Plans. Think of it, now you cannot only loan out money that has been unavailable to use, but you can make it grow rapidly…. Tax Deferred or in the case of a Roth IRA Tax Free!
Since Uncle Sam isn’t taking a bite out of your profits with a traditional IRA until you draw out the money, more money is left in the account to compound and grow. The results are staggering…If you have a Roth IRA your money can grow at staggering rates and you will not pay taxes on it when you draw it out.
In order for you to use retirement accounts for loans they must first be administered by a “Third Party Administrator” or TPA. This TPA is set up and approved to administer your loan activities. This means you will probably have to transfer your plan to one of these TPA’s, unless of course, your present administrator is set up to do that. When your TPA is located, simply send the transfer form to them and they’ll do all of the work for you. Once you’ve done that…..
When we’ve selected a property, you simply notify your TPA where to send the check for the gross amount of the loan and you’re in business. There should be no cost to you except your plan administering costs. Some TPA’s will even collect monthly payments for you and deposit them into your account. We have selected Equity Trust Company as our preferred TPA.
If you have any questions regarding your plan or its administration, contact your Plan Administrator. If you need help transferring your IRA just give me a call. I’ve located the best in the country, so you can get going immediately.
What kind of documents should I receive?
Your closing package should contain the following in most cases:
1) A Promissory Note.
2) A copy of the mortgage. The original will be recorded and then sent to you later.
3) A property insurance endorsement naming you as mortgagee.
4) Title Insurance mortgagee policy
These documents provide you security.
What Do I need to do to get started?
Simply let me know that you want to participate, how much capital you want to invest, and how to get in touch with you. I’ll contact you when I have an opportunity for you to put your money to work.
We’ve covered a lot in this document. I hope I’ve enlightened you on the awesome power of making private mortgage loans. If it appeals to you, you can get started right now. While most people are complaining about the low rates they are getting on their CD’s and other low paying investments, you could be receiving a return of 8% to 12% all of the time…..
“Are you now ready to take action?”
So what’s it going to be? Are you going to continue to let other people control your money so you only get a return that barely keeps up with inflation? Or are you going to take control and make sure that when you get ready to retire, you can do what you want without worrying about money and if you are retired, squeeze every interest dollar out that you can.
Private lending is an incredible way to build wealth in a hurry that most people aren’t aware exists. You’re not one of those people who are uninformed anymore. If you have more questions give me a call. Perhaps we can get together for lunch or just chat on the phone.
Cindy Tolbert
205-393-1554
