Beretta Only: 2020

Wednesday, July 15, 2020

A Guide For Private Money Lenders How To Attract Investors

While each individual investor may have their own agenda when it comes to a particular exit strategy, the returns provided by an investment are of the utmost importance.

For all intents and purposes, the ROI is the motivation behind any investor. After all, money means security. Who would not want to maximize their ROI? Having said that, private lending is perhaps one of the best ways to increase returns. Private mortgage lending has typically provided an annual return of 8-10%, based on the historical interest rates charged to borrowers.

The Pros of Private Lending

Assuming you have decided to pursue becoming a private money lender, it is important to familiarize yourself with the benefits it provides borrowers. However, it is equally important to know the drawbacks as well. As with any new business venture, you will face both positive and negative circumstances. The decision of whether to proceed with this moneymaking strategy lies in the balance. Do the pros outweigh the cons for you? The following illustrates some of the biggest pros involved in private investing:

The Pros:

Reliable Cash Flow: While there are no guarantees, private money lenders can typically expect an annual return somewhere between 8% and 10%. Depending on the loan structure, there may be other ways in which profits are realized, like interest.
Capital Preservation: In loaning your own money, your investment will be secured by a first position “priority” lean on the property in question. Additionally, the loan-to-value (LTV) ratios are typically 60-70%, allowing the invested capital to be preserved in the event of foreclosure. Structured correctly, and your investments is very safe.
Diversification: As a private money lender, you are encouraged to diversify your portfolio.
Minimal Volatility: Loans are typically short in their length (usually nor more than 12 months).
Passive: Private money lenders earn relatively passive income, in that their money is working on their behalf. The return on investment is not correlated to the amount of time they put in.

Private Lenders: The First 3 Steps To Get Started

Whether you are interested in having your money work for you now or in the future, understanding what it takes to get started is a critical step. Having said that, it is imperative to equip yourself with the right tools should you decide to become a private money lender. Before you make the transition from borrower to lender, be sure to familiarize yourself with the following:

Make Sure You Qualify: Prior to becoming a private money lender, you must become seasoned. Essentially, you should be actively investing and using the systems that are offered to you. Moreover, if you have already rehabbed, wholesaled or turned profits with some relative degree of success; then there is a good chance you are ready to make money with the money you have already accumulated. You really can’t know where you are going until you are familiar with where you have been. Provided you meet the qualifications, you will also need to make sure that you can afford becoming a private money lender. In other words, can you manage your monthly expenses while simultaneously working as a private money lender? If your answer is yes, becoming a private money lender may be right up your alley.

Pick An Angle: As a private money lender, there are multiple routs to consider. However, your choices will be entirely dependent on the amount of funding you have available, how long you want your money tied up, and the time you have to dedicate to a particular opportunity. In order to better understand the directions, you can take, consider the following criteria:

Residential vs. Commercial
Short Term vs. Long Term
Direct vs. Passive

Each of these options will become available to you as a private money lender. It is up to you to choose the path you want to take.

Speak With A Professional:

Those set on becoming a private money lender should seek council with a professional that has already done it. Moreover, speaking with someone that has already done what you want to do can lead to some valuable in sight. However, if you choose to lend directly, you should speak with your personal team of professionals. This includes your Escrow Company, Title Company, attorney, and anyone else who may be of a concern.

It is an even better idea to speak with a team of people who have been private lending for a while. While you may want to try direct lending, finding a private lending company with a good track record is an exceptionally good place to start.

Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
© 2019 Level 4 Funding LLC. All Rights Reserved.
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Monday, June 22, 2020

All About Deeds of Trust and Trust Deed Investing

All About Deeds of Trust

You’ve just made the decision to purchase a home! First things first. Find the perfect property for you, make an offer that will be accepted by the seller, and finally secure financing.

When it comes to financing buyers will use either a mortgage or a deed of trust. These are the names of the document’s buyers will use to secure financing. Both works similarly, but not the same. Certain states require buyers to use only one and other states, such as Arizona allow either. The biggest distinction between the two is the number of parties involved. A deed of trust has three parties and a mortgage has only two.

The three parties in a deed of trust are the borrower, the lender, and the trustee. The borrower is also referred to as the trustor and is the person purchasing the property and in need of a loan. The lender is either a legal entity or an individual who provides the loan. The trustee is a neutral third-party who holds the deed to the house and is ultimately responsible for the repayment of the loan. If the borrower defaults on the loan it is the trustee who would sell the property and repay the loan. The trustee is the party that handles the foreclosure process.

Once the loan is repaid the trustee is responsible for transferring the title of the property to the borrower. For this, the trustee must file a Deed of Reconveyance that shows the debt was paid. The Deed of Reconveyance is filed with the local county recorder of deeds registry. If not done within 30 days of the final payment a penalty will be issued.

Who is allowed to be a trustee?

Certain states have legislation describing the required qualifications. You can find this out by simply checking your local laws. Some states have no requirements for who can serve as a trustee to a deed of trust.

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
© 2019 Level 4 Funding LLC. All Rights Reserved.

Saturday, June 20, 2020

What is a Trust Deed? Trust Deed Investing

What is a trust deed? A trust deed is also known as a deed of trust. It is a document that is used in real estate transactions when one party takes out a loan from another party to buy real estate. The trust deed represents the agreement between the lender and the borrower to have the property held in a trust by a neutral third party until the loan is paid in full.

Trust deeds are less common than they used to be in the past. Trust deeds are quite common in states like Arizona, California, Colorado, and Texas. Some states allow both trust deeds and mortgages.

In financed real estate transactions, a trust deed transfers the title to a third party called the trustee. The trustee is typically an attorney, a bank, or a title company. The trustee holds on to the title until the borrower has paid the debt back to the lender.

The purchase of a home or commercial business is a real estate transaction. The lender gives money to the borrower in exchange for a promissory note that is linked to a trust deed. The deed transfers the legal title to the real property to an impartial party (the trustee). Trust deeds take the place of traditional mortgages.

The trustee holds onto the legal title until the debt is paid in full by the borrower. Then the title to the property becomes the borrowers. If the borrow defaults on the loan, the trustee begins foreclosure and takes control of the property

Although trust deeds and mortgages are similar, they do have important differences.

Trust deeds and mortgages are used in loans for creating a lien on real estate. They are both recorded as a debt where the property is located. While a mortgage involves two parties, the borrower and the lender, a trust deed involved three parties. The borrower (trustor), the lender (beneficiary), and the trustee are all significant in trust deeds. However, contrary to popular belief a mortgage is not a loan to buy a property. Instead, it is an agreement to use the property as collateral for the loan. Trust deed and mortgages have very different foreclosure procedures. A trust deed uses a nonjudicial foreclosure which does not require a court to be involved while a mortgage uses a judicial foreclosure which means the lender sues the borrower. Once the lender has control of the property, they typically sell the property at an auction.

Friday, June 12, 2020

Trust Deed Investing Arizona

A lesser-known option for investing in is trust deeds. They have high returns, a low entry point, and more security than many investments.

Investing in trust deeds gives you an opportunity to invest with lower risk and a higher chance of great returns, often in double digits. When people invest in real estate, they are generally experts in the industry. However, with trust deed investing, you do not need experience because this is not a hands-on investment.

Exceptionally High Returns

The stock market is completely unpredictable. You can have the best portfolio but there are zero guarantees it will perform well. However, when it comes to investing in trust deeds, you are guaranteed a specific return over a specified period of time. Generally, these returns are much higher than other investments produce.

Low Entry Point

You do not need a huge amount of money in trust deed investing. Typically, you can begin with as little as $20,000. When you invest in your own property it costs much more. Flipping a house, for example, will cost you much more than $20,000. Trust deed investing will give you just as good of a return as flipping a house if not better, which is why this investment is so lucrative. Less money up front and just the same high returns as other investments.

Security

Another great part of trust deed investing is the security investors will experience. Investment, high returns, and security generally don’t go together. However, trust deed investments carry a fixed rate of return so you are aware of exactly how much money you will make. This type of investment is not affected by the market. If the market goes up or goes down, you will still receive the same amount of return. You will know from the beginning what you are investing in and what your return will be. Peace of mind comes with trust deed investing.

Inveseting in Foreclosure Properties–How To Do It

How To Invest in Foreclosures

You’ve seen the TV programs where attractive young couples buy foreclosed homes, renovate them, and flip them for huge profits. They make it look easy.

While of course, the process of purchasing, renovating, and flipping foreclosed properties is a bit more complicated than it appears on TV, it is doable and you can make a profit from it. Here’s what you need to know before spending one dime on a foreclosed property.

Drive-By the Property

When the sales list comes out, peruse the list, and identify potential properties for purchase. You’ll want to visit them prior to the sale. Of course, you will want to get an idea of the condition of the property, but you also want to inspect the neighborhood.

First, research the property online. You will be able to determine how old it is, how many bedrooms and bathrooms it has, how many owners it had, how long the previous owner had it, what the property taxes are, and in many cases, whether permits were pulled to perform any renovations and what they were.

If the property is vacant you want to get as close as you can, without trespassing, to determine as best you can what condition the property is in. It is typical for foreclosed homes to show some degree of deferred maintenance because if the previous owner did not have the funds to pay the mortgage chances are they did not have the funds to make repairs or updates.

Look at the roof, the siding, the foundation, and the state of the yard. The exterior will likely give you an idea of what to expect in the interior. Expect to update all surfaces and renovate the kitchen and baths. Of the flooring, the roof, and the foundation, expect there will some work to do and budget for this contingency.

Determine Your Maximum Purchase Price - and Stick to It!

After you’ve visited the property and determined you can handle a renovation, you must determine your maximum bid. Your maximum bid should not be based upon what you can afford, but should be based on several objective factors, including the sale price of comparables on the market, what a potential buyer would expect in the property, what renovations bringing the property up to meet those expectations will cost you and how much value those renovations will add to the property.

Bear in mind that most sheriff’s or trustee’s sales are all-cash transactions.

Know Your Buyer

Here’s where your visit to the neighborhood pays off. Who will buy your renovated property? An established professional who commutes? A married couple with kids? A young first-time homebuyer? This will determine the type of renovations you do and the style in which you do them.

You will likely need to update most surfaces, including flooring, paint, and countertops. If the home is older, the kitchen and bathrooms may need updating. Who your prospective buyer is will determine the style.

Determine How to Add Value to the Property

Besides updating surfaces, you may need to make more significant changes to the property. For example, if the property is located in a neighborhood of homes with three bedrooms and two baths and the property you are considering only has one bath, you’d better believe you are going to need to add a bath. If homes with an open floor plan are selling in that neighborhood and the property you are considering is a warren of small rooms, you should consider taking down some interior walls.

When you drove by, you should have been able to see serious foundation issues or if the roof needs to be replaced, and whether you will need to improve the landscaping. Also, if you are considering purchasing an older home, you must be prepared to update the electric and remediate lead paint and asbestos.

Set aside at least 10% of your renovation budget for unexpected costs.

Research Comparables

You’ve seen the neighborhood, figured out who your buyer is, and determined what the home needs as far as you can. Now is the time to research properties that have recently sold that are comparable to your vision of your renovated property.

Once you have your recent comps, set a range of expected sale prices as the market will fluctuate in the time you take to renovate.

Set a Budget

Your budget should include the anticipated cost of renovations plus a 10% cushion and carrying costs. Your budget plus the purchase price of the property should be well below your ultimate sale price range. If it is not, you should pass on this property.

Be Prepared to Rent if the Property Does Not Sell

Not every property sells right away, and you have to be prepared in case yours does not. When researching comparable properties, also research what comparable rental properties rent for. This should factor into your decision whether to purchase because if you can’t rent for the number of your carrying costs, you will be in the red as long as you own the property.

Be conservative in your spending and realistic in your sale price, and you should do well. Good luck!

About the Author

Veronica Baxter is a legal assistant and blogger living and working in the great city of Philadelphia. She frequently works with David Offen, Esq., a busy Philadelphia bankruptcy attorney.

Sunday, May 17, 2020

Is Trust Deed Investing For You?

Is Trust Deed Investing For You?It’s never easy when you are deciding where to invest your hard-earned money. The question to always ask is, “ Where will I get the biggest return?”

For years the stock market has been unpredictable and even more so in today’s world. More than ever before people are searching for intelligent ways to invest and diversify their portfolio. Trust deeds are an investment with a high return.

Trust deed investing allows you to easily become a real estate investor without the hassle of traditional real estate investing. As an investor, your name will be on the deed of trust in a first lien position on the property. Then, the invested money is borrowed by a developer who is searching for an investor to develop their project. You are loaning money to a developer or a borrower. Immediately you will begin earning interest on your money.

Why do developers seek out money from trust deed investors? Why not just get a loan from a bank? Banks are much less likely to lend to small and medium-sized commercial developers, and they almost never lend on the land. Generally, developers need a land loan as well as a property loan. This leads developers to find funds elsewhere.

How Do I Become a Trust Deed Investor?

If you are considering investing in real estate as a trust deed investor, you need to find a trust deed broker. A trust deed broker’s job is to bring the investor and the developer together. The trust deed broker will analyze the developer’s project and find the best investor for that specific project. Regardless if it is commercial or residential, a trust deed broker will have the resources necessary for both the investor and the developer. Becoming a trust deed investor is a passive and lucrative real estate investment that will diversify your portfolio and supplement your investment strategies.

It is especially important to speak with potential brokers to find which one you feel most comfortable with. They have a large amount of knowledge and can answer any questions. Be sure to know who the borrowers are and why they need funding. Find out the way the project is evaluated. Ask the broker to explain how you will benefit from this investment. And be sure to completely understand your role as an investor.

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