Safe High Return Investments Naples

Knowing how much you should invest in the stock market is extremely important for any investor. Often, people look at the bull run of the stock market and the gains they will reap from their investments, forgetting the downside of the bear market.As a result, some lose their entire life savings and into financial turmoil.Cases of suicides and divorces are not uncommon as a result of losing one’s investment in the stock markets.
Many first time investors think that they should invest all of their savings. This isn’t necessarily true. To determine how much money you should invest, you must first determine how much you actually can afford to invest, and what your financial goals are.
1. Take a look at how much money you can currently afford to invest. Do you have savings that you can use? If so, great! However, you don’t want to cut yourself short when you tie your money up in an investment. What were your savings originally for?
2. It is important to keep three to six months of living expenses in a readily accessible savings account – don’t invest that money! Don’t invest any money that you may need to lay your hands on in a hurry in the future.
3. Determine how much of your savings should remain in your savings account, and how much can be used for investments. Unless you have funds from another source, such as an inheritance that you’ve recently received, this will probably be all that you currently have to invest.
4. Determine how much you can add to your investments in the future. If you are employed, you will continue to receive an income, and you can plan to use a portion of that income to build your investment portfolio over time. Speak with a qualified financial planner to set up a budget and determine how much of your future income you will be able to invest.
5. Do your research.For many types of investments, a certain initial investment amount will be required. Hopefully, you’ve done your research, and you have found an investment that will prove to be sound. If this is the case, you probably already know what the required initial investment is.
6. Seek the help of a financial planner so that you can be sure that you are not investing more than you should or less than you should in order to reach your investment goals.
7. If the money that you have available for investments does not meet the required initial investment, you may have to look at other investments. Never borrow money to invest, and never use money that you have not set aside for investing!

High Return Investments Naples

Safe High Return Investments Naples

This is a good exercise in building wealth in the unstable world of stock investing. It’s throwing in the towel, and you don’t want to get involved with stock investing with companies that have that attitude. Online stock investing can be a great way for anyone to get involved in the market.
Contrary to the short term perspective of most investors today, all the big money is made by catching large market moves – not by day trading or short term stock investing. Fraudsters don’t think twice before developing stock investing, commodity or option trading courses to make a little extra money for themselves regardless of whether or not what they teach helps their students. If penny stock investing is a junior level course then day trading is a senior level course that most seniors will fail.
We are looking for titbits of information, what we call the scuttlebutt method of stock investing. Now stock investing can be a crap shoot at best. In 1998 he was shouting out to the world to ‘get out’ of the stock market but now he is shouting to everyone that it is time to ‘get in’. The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing.
They don’t know anything about stock investing and they often lose a few thousand dollars very quickly. The second richest man in the world, Warren Buffett, has made his millions from stock investing. This way of stock investing or trading is called the Darvas strategy.
In our investment work when we get involved in stock investing, we do hands on stock research. What any ‘vexed’ shareholders are forgetting and he is not, is that Rule 1 in stock investing is, Don’t lose money. As mentioned earlier, stock investing is not only knowing the companies but also knowing the timing of investment.
Since I am an advocate of stock investing, let me make the case for stock investing. Penny stock investing can be profitable. Also, online stock investing has opened the door wide for overseas stock trading, giving you more investment opportunities than ever.
Well, one of the oddities of stock investing is that stocks do not necessarily behave according to the company’s condition. The new book, ‘Sensible Stock Investing’, describes in detail the relatively simple techniques that the individual investor can use to sidestep large losses such as not using margin, not selling short, and controlling losses with sensible sell-stops. Penny stock investing is a junior level course at least.
Combined, the return on your investment here is massive compared to regular stock investing. I want to emphasize that CAPM is based on the notion that the stock market efficiently translates all information known about the stock market into stock prices for stock investing purposes. What do I need do stock investing.
Even the stock investing pro needs tips now and again and is on a path of continuous daily learning. Beyond that, however, online stock investing does have a lot of perks that make it accessible to virtually anyone. So if you are new to investing in the stock market take some time and learn how to by taking a stock investing course.
Nowadays, stock investing can already be done by the man on the street. Everyone from retirees to school children, have managed to get involved in online stock investing for a whole host of reasons.

High Return Investments Naples

Safe High Return Investments Naples

To invest into stock market or other securities is quite a very critical decision every investor should note before taking a step into ”The Bull Market” I choose to call it ”The Bull Market” because, the benefits and profits in the stock market is quite enormous. The stock market is the only business transaction that its resource is yet untapped, you stand a great chance of profiting unlimitedly in trading stock, as well as losing every thing you have worked for all your life into stock market just in a twinkle of eye.
That is the more reason why every investor should think twice and think very carefully before investing into stock market, to tell you the fact, the stock market is not for every body. The stock market is meant for people who are willing to take risk, people who have extra to spend, people who are credit free, people who are independent, people who are financially free and people who are strong and willing to stand any financial risk situation. Before you invest into stock, you need to know your self and most importantly your financial status, because stock trading is very volatile, risky and that is the more reason why you need to check your self and your background before investing your money to avoid losing your hard earned money.

To invest into stock market or other securities is quite a very critical decision every investor should note before taking a step into ”The Bull Market” I choose to call it ”The Bull Market” because, the benefits and profits in the stock market is quite enormous. The stock market is the only business transaction that its resource is yet untapped, you stand a great chance of profiting unlimitedly in trading stock, as well as losing every thing you have worked for all your life into stock market just in a twinkle of eye.

That is the more reason why every investor should think twice and think very carefully before investing into stock market, to tell you the fact, the stock market is not for every body. The stock market is meant for people who are willing to take risk, people who have extra to spend, people who are credit free, people who are independent, people who are financially free and people who are strong and willing to stand any financial risk situation. Before you invest into stock, you need to know your self and most importantly your financial status, because stock trading is very volatile, risky and that is the more reason why you need to check your self and your background before investing your money to avoid losing your hard earned money.

Investment Plan:

Every beginner needs to have an investing plan, weather you are beginning to trade/invest into stocks, bonds, mutual funds, futures, forex, real estate, equity and many other financial market. You need to have a plan point of how much risk you are willing to take at the starting point, and the investing plan is ”How Much Are You Willing To Risk” on your starting point. You need to start investing from some where, but where it will not affect your financial status even if you lose your capital margin into the investment.

Before you invest your money, make sure to start with as little as you can afford to risk, that will make you not to lose all you have and at the same time, it will prompt you more opportunity to harness on the transaction to ascertain if it actually worth investing your hard earned money into such business. Dont risk investing the amount of money you can not afford to lose, all security transactions are very profiting but at the same time you can lose so much into the transactions as well.

The Beginners Target Of Investing:

The target of every investor is to make profit, and by that you need to invest your money into a very lucrative and legitimate kind of transactions that will yield better interests and profits, as a beginner, you dont know the most lucrative and legitimate transactions to invest your money yet, but before you invest, make research about the business to know certain things before you jump into such transaction, but it has been proven that security investments like stock, bonds, mutual funds, equity, futures, forex and other financial transactions yields more better profits in short time investment than other investments, which is the more reason why investors are destinating to invest into financial/securities in order to reap from the untaped profiting ventures.

Because of the volatile in the security transactions, prices tend to rise over time, which gradually increasing your money to profit, in this aspect you have benefited from the investment when the prices ascends up. It can also fall over time as well as decreasing the margin of your investment, in this aspect you are losing your money into the investment when the prices descends down. Therefore, investing your money into transactions is not only to make profits but it will also give you the opportunity to make turn over of your money, which also increases the weight and value of the money you have into more strong money. However, investments requires strategies, good decisions, careful planning and patience in order to make a better returns in your transactions.

High Return Investments Naples

Safe High Return Investments Naples

Want To Earn Higher Returns On Your Investments? Welcome to Safe High Return Investments Naples.

If you’re like most investors today, you’re probably pretty frustrated about the returns you’re getting on your investments lately. That’s why I created this site. Like you, I was tired of the low returns I was getting om traditional investments like certificates of deposit (CDs), money markets or even short term commercial paper.

There Are Lots Of Ways To Earn More On Your Money Than Banks Are Currently Paying

So, I set out to find out about other investments that could offer me the potential to earn a higher rate of return than those typical bank investments were paying. What I found is that there are lots of other investments out there that pay high returns, including real estate, private lending, the stock market, mutual funds and even commodities, options and more.

High Returns Are Great, But What About Risk and Safety?

While I wanted to earn a high rate of return on my money, I also wanted to be sure that I wasn’t getting into something risky. After all, we work hard to save money and the last thing we want is to invest it in something and lose it. Well, after quite a bit of investigating, I finally found a way to earn an above average rate of return on my money, while at the same time having more than just a piece of paper (like a stock or bond) to back it up.

Let’s face it, we all learned our lessons with the Enron debacle. You can have all the stock experts saying something is safe and a good investment, but the bottom line is that your fate is completely dependent on something you don’t understand at all or have any control over. I mean, how many Enron investors understood energy grids and offshore swaps and all the other complicated stuff those guys were doing?

Private Lending, Joint Ventures & Real Estate Investing Can Offer Both Safety And High Returns

What I found is that real estate investing, either as a financial partner with an experienced real estate investor, or private money loans where you loan money to someone who is investing in real estate, and then you secure your loan with the property the real estate investor is buying, can actually offer a high return on your investment, plus the security of a lien on the property that is being purchased.

That way, if the loan can’t be paid back, or if things don’t work out with the real estate investor’s deal, you at least have that property that you can sell and get your money back. You can get additional protection on this type of investment by insisting on title insurance (to ensure that you are covered in the event of any ownership disputes involving the property) and casualty insurance (to ensure that you are covered in the event that something happens to the property like a fire).

Get Your Free Report On The Safe High Return Investments Naples Has To Offer

This site is designed to share with you my experiences in using real estate investing, joint ventures and private lending to earn more with safe high return investments in Naples and Florida, and to help you maximize your return on investing. I’ve also gathered information here for you on other high return investments, some safe and some more risky, just so you can see as many of the different options as I can find to share.

I’ll include case studies and other information as I find and experience them. I invite you to join me in sharing investing ideas and information about investing, and I hope you’ll let me send you my FREE Special Report on how to double or triple the returns that banks are paying. It’s a great read and filled with a lot of valuable information you can start using right away to improve your returns and investing options.

Contact Me

Rick Donner. Call me at 239-590-9144 or Click here to e-mail me now

www.swflRealEstateCoach.com

Now, for the legal stuff…

“THIS SITE DOES NOT PROVIDE FINANCIAL OR INVESTMENT ADVICE AND DOES NOT TAKE INTO ACCOUNT THE PARTICULAR FINANCIAL CIRCUMSTANCES OF INDIVIDUAL INVESTORS. BEFORE INVESTING, INVESTORS SHOULD SEEK THEIR OWN PROFESSIONAL ADVICE. THE INFORMATION CONTAINED IN THIS WEBSITE DOES NOT CONSTITUTE AN OFFER OF, OR AN INVITATION TO APPLY FOR SECURITIES IN ANY JURISDICTION WHERE SUCH AN OFFER OR INVITATION IS UNLAWFUL, OR IN WHICH THE PERSON MAKING SUCH AN OFFER IS NOT QUALIFIED TO DO SO. WE ACCEPT NO RESPONSIBILITY FOR THE CONTENT OF ANY EXTERNAL WEBSITES. THE PURPOSE OF THIS WEBSITE IS TO PROVIDE GENERAL INFORMATION ABOUT PRIVATE LENDING AND REAL ESTATE INVESTING. IT IS NOT INTENDED AS AN ADVERTISEMENT OR AN INVITATION TO BUY, OR AN OFFER TO SELL, SECURITIES.

PAST PERFORMANCE, INCLUDING WITHOUT LIMITATION PERFORMANCE DESCRIBED IN CASE STUDIES, IS NOT INDICATIVE OF FUTURE RESULTS, AND THERE CAN BE NO GUARANTEE AS TO THE ACCURACY OF MARKET FORECASTS OR THE PERFORMANCE OF ANY PARTICULAR INVESTMENT. THIS MATERIAL IS NOT AN OFFER, OR A SOLICITATION OF AN OFFER, TO PURCHASE ANY SECURITIES, INCLUDING SHARES OF ANY INVESTMENT COMPANY, UNLESS PRECEDED OR ACCOMPANIED BY A PROSPECTUS. THE VIEWS AND OPINIONS EXPRESSED ARE PROVIDED FOR GENERAL INFORMATION ONLY, AND DO NOT CONSTITUTE SPECIFIC TAX, LEGAL, OR INVESTMENT ADVICE TO, OR RECOMMENDATIONS FOR, ANY PERSON. WE SUGGEST THAT YOU CONSULT YOUR FINANCIAL OR TAX ADVISOR, ACCOUNTANT, OR ATTORNEY WITH REGARD TO YOUR SPECIFIC SITUATION.

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Private Lending:  What is it and how does it benefit you.

When we buy houses, we prefer to borrow from private individuals.  Banks, Insurance Companies, Financial Planners and Stock Brokers borrow money (from you) through Savings Accounts, Money Markets, CDs and Bonds, at a low interest rate and then loan the money to investors (like us) at a higher interest rate.  By borrowing from private individuals, we cut out the middle man and are able to give you a higher interest rate.  Why would we do this?  Having the cash readily available allows us to buy at a discount.

How Does the Private Mortgage Lender Program Work?

Once we’ve located a property that fits our purchasing criteria, we borrow from you to purchase the property.  We have a formal closing with a title company and you’ll receive a mortgage on the property along with several other documents.  This will secure your legal position on the property.

Who Handles the Property?

This is one of the great things about Private Lending.  You do nothing!  We will locate the property, negotiate the best deal close the property and then make sure you receive all the documents.  We then rehabilitate the property (cosmetic repairs like paint, carpet and appliances) bringing everything to code.  Next our property manager will prescreen and locate quality tenants to occupy the properties and collect the money.  At no time, will you have to deal with the tenants or property.  We will see that all bills are paid including maintenance, insurance and taxes.  Your job in the process will be to receive your monthly interest check.

How Do You Get Paid?

We borrow the money at 8% interest and make monthly payments to you.  We place a 6 year balloon in the note, allowing you to get your principle sooner, thereby giving you the opportunity to invest again in other projects of your choosing.  The banks typically pay 1% – 2% and require a longer hold time.

How Can We Buy Properties so Far Below Market Value?

As real estate investors and coaches, we know where to look, what to buy, and what not to buy and how to renovate.  We purchase small multifamily units meeting specific parameters that will allow us to maximize the property.   Value is created by taking ugly vacant properties, renovating them and putting tenants in them, which in turn improves the community.  Through our connections, we are able to buy in bulk and at a discount, finding deals that just don’t otherwise exist.

What Documents Secure Your Investment?

• Mortgage                                                            Hazard Insurance Policy
• Title Insurance                                                  Promissory Note

Lenders have no expense during this process.

• Our #1 Rule: The money borrowed is no more that 65% loan to value after renovation.  What does that mean?  If the property is worth $100,000 after repair, you won’t be lending any more than $65,000.  (This is additional security for you.  We know you know from a lot of TV ads where they’ll go out and they’ll give you 125% on your money.  We don’t do that; our paycheck is in what’s left over in that property when we sell it.  So we don’t and won’t over leverage.)

Take Control of Your Future!

• If you loaned $50,000 at 8% interest, you’d receive $4,000 in interest annually.  That’s passive income (no work on your part) – the best kind!
• A bank CD at 2% on the same amount pays only $1,000 annually.
• That’s a difference of $3,000 PER YEAR!!!  This does not include some of our other additional incentives.

Invest With Your IRA or Pension Plan

Do you have money in an IRA or 401K Pension Plan?  Did you know you can self direct your IRA (Traditional and Roth) or pension plan?  Did you know your returns stay tax deferred or tax free?  It’s simple, easy and we do the work.  Did you know you can borrow your cash value on your Whole Life Insurance Policies, which are earning CD rates of return?  You would then loan back out to us to purchase properties.  You earn 8% instead of 2% or less!

The Next Step?

Give us a call at 888-548-8450 or send an email with any questions you may have to ldonner@earthlink.net .  We look forward to working with you.

“Safe High Return Investments Naples – 7 Secrets To Finding The Right Investment In Today’s Troubled Market!”

You’ve scrimped, you’ve saved, and now you’re ready to invest and have your money working for you.  You probably want a high yielding investment with minimal risk, and something that is fairly liquid so that if you need to access that cash, you can do so fairly quickly.  Oh, and while you’re at it, you really want something that has minimal risk and that is secured.

Yeah…right…is that really possible?

The challenge is that there are a lot of not-so well-meaning folks out there with their hands out, palms up, ready to take your money, regardless of whether or not you benefit!  As far as they’re concerned, EVERYTHING that they offer is a good investment!

Then again, there are some really good people out there, too!  These are the folks that have integrity, and that offer investments that minimize your risk and maximize your return.  So, the big questions are:

How can you tell the difference?  What makes a good investment?

Before you consider any investment, you should first do a little research and ask some specific questions.  And that’s what this report is all about: Asking the right questions!  The answers, in turn, will allow you to make a more educated decision; one that is right for you and for your situation.

Here are a few questions that you should be asking…and before we go on, let me mention that we’ll cover each one of them in depth later in this article:

1. Is the investment secured and if so, by what?
2. Is the investment insured?
3. Is the investment liquid, or will you be required to tie-up your capital for an indeterminate or long period of time?
4. What kind of returns does the investment yield?  And do those returns offset whatever risk is involved with the investment?
5. Does the investment produce monthly cash flow, or does interest accrue until the end of the term (like a bank Certificate of Deposit)
6. Does the investment require a lot of capital?  Or can you get into it for a modest amount?
7. Is the investment an ACTIVE one where you’re required to work to get a return (as in buying a house that needs fixing-up) or is it PASSIVE, meaning that your money does all of the work for you!
8. And finally, do you need a license to do this in your state? (Yes…I can count!  I just thought I’d add an extra!)

WHEW!  Answering all of those questions seems a bit daunting, doesn’t it?

Tell you what:  let’s eat the proverbial elephant one bite at a time and review each one of them!  And for fun, let’s review each one of them in the context of Private Lending (isn’t that why you’re on this site?)…

Is the Investment Secured?

Obviously, when you’re investing any amount of money into anything, you’d like to know that if things go bad, you have a way to recapture your principal.  If you invest in an oil well, for example, you probably can’t repossess the well if it doesn’t produce.  The same thing applies in the stock market and quite a few other investments…

Private lending on real property is different:  your money is secured by two items, one with more teeth than the other:

NOTE:  This is the form that the borrower signs acknowledging the debt, and agreeing to repay it following a written set of terms.  In the banking business, the NOTE is referred to as the evidence of the debt.  If you’ve ever borrowed money to purchase or refinance a house, you’ve signed this agreement to repay the debt.

MORTGAGE/TRUST DEED:  This is the document that gives the lender the right to take the property back in case of default of any kind, including non-payment, delinquent taxes, property condition, etc.  It is filed as public record and basically says to the borrower:  “If you don’t pay…you don’t stay!”

So, when you loan money backed by real estate, you should always insist that the borrower give you both a note and a deed of trust/mortgage (state-specific document) at the closing.  That way, you’ll have a secured lien against the property.  And keep in mind one other important item:

ALWAYS limit your loan to under 70-75% of the market value of the property!!

Banks made a huge mistake by loaning 95-100% of the value of the property, and in many cases, even more!  First of all, these were high-risk loans.  Second, when properties devalued across the country, they took huge losses!!

Don’t make their mistake! One of the great things about being a private lender is that you’re getting a secured investment, protected by both the lien against the property and the equity in the property!  That’s why they also call it equity lending.

Is the Investment Insured?

Private lending is one of the few investment vehicles that is protected by not just one, but two forms of insurance with you, the lender, named as the loss payee.  In other words, should either one of these policies pay off, you, the lender, will get your money before anyone else!

The two types of insurance are title insurance and hazard insurance.  Let’s look at each of them and how they protect you, the lender:

HAZARD INSURANCE:  This is an insurance policy taken out by the property investor that names you as the beneficiary should the property ever burn down, get destroyed by a natural disaster, etc.  Most folks know this as property insurance – what they fail to remember is that in almost all real estate transactions, it’s the lender that gets paid off before anyone else!  The lender in this case is…you!

TITLE INSURANCE:  Personally, I love this type of insurance, because it gives the lender the assurance that their lien is a valid one; one that will be paid off before any other liens.  The way it works is that the property investor pays to insure you, the lender, against all encumbrances against the property.  The title insurance company’s abstractors research the title to the property, and when the deal closes, insures that all back-taxes are paid, as are all other liens against the property (things like weed liens, city-imposed liens, HOA liens, etc.).

How Liquid is the Investment?

A more specific question here would be whether you can pull your money out of the investment in a relatively short period of time, or whether you’re required to stay in it indeterminately.

Most of the time, when you invest in company start-ups, you’ll end up leaving your capital in the deal for quite some time.  Sure, there are other investment vehicles that are semi-liquid, like the stock & bond markets, but keep in mind that getting out is subject to the vagrancy of the market:  can you sell at a price high enough to get back your initial investment?

And, if you leave your money in an investment for longer than 36 months, you run the risk of the economy changing, meaning that you might be able to get a higher rate of return someplace else!

Private lending, on the other hand, is liquid in two ways and, it isn’t subject to the whims of the market!

1. Similar to a bank’s Certificate of Deposit, most terms are 36 months or less. With a bank’s CD, you’re obligated to stay in the investment until the term is over, unless you want to incur a penalty.   However, when you loan money privately to a real estate investor, in many case they’ll work hard to replace your money early if necessary just to keep a good relationship with you.  That doesn’t mean that you should enter into an agreement for 36 months expecting to get your money out early!  It DOES mean that private individuals are a lot more flexible than banks or other institutions!
2. You can also sell your receivable (loan) during the term should you need quick cash! There are companies all over the U.S. that buy private mortgages.  Their buy-rates are determined by the amount of the note, the location, type, and condition of the collateral, the interest rate, etc.  We normally tell our clients about a firm that we use, SMI Funding.  Their principals have been in business for over 15 years and we’ve found them to be fair as well as efficient.  If you’d like to find out more about them, email one of the principals, Jayme Kahla, at Jayme.Kahla@smifunding.com.

What Kind of Return (Yield) Should I Expect From This Investment?

Many people seem satisfied with a bank’s CD rate of return which, as of this writing, is about 1.5% for a 6 month CD and about 2.5% for a three-year commitment. (Source:  bankaholic.com)

Let’s say, however, that the inflation rate is higher than 1.5% to 2.5%.  That is certainly possible, because historically, any time a country prints money, the inflation rate goes through the roof.  The point is, if the inflation rate exceeds your rate of return, you’re actually losing money!

In order to stay ahead of inflation, you need to be making at least twice bank rates.  What if I told you that you could get as much as three times bank rates in a secured investment?

That’s where private lending comes in.  Market rates for private loans range anywhere from 2-3 times what you would earn in a CD at your bank.  That said, there are some things that you should consider about this type of investment:

1. What will the market bear? Sure, wouldn’t we all like to get 40-50% passively on our money?  Of course we would!  But the market, however, keeps things competitive and as a result, the current rates for secured real estate investments run 2-3 times bank CD rates.
2. How long do you want to keep your money invested? Again, bank CDs set the standard here, with lower yields for shorter investments, and higher yields for longer ones.  So, if you only want to invest for 6 months at a time, you should expect a lower return than if you want to invest for 36 months.

1. Does the risk offset the yield? 2^nd lien mortgages are a little more risky than 1^st lien mortgages – as a result, they pay better.  So while you can probably receive a 5-10% return on 1^st lien mortgages, if you’re willing to invest in a 2^nd lien mortgage, expect your yield to be 1-2 points higher.  Oh, and the good thing about investing in 2^nd liens is that they require less money!

Does the Investment Product Monthly Cash Flow?

Some people like monthly cash flow from their investments, and others like their investment to accrue interest over time, paying off at the end of the investment term.  There really is no right or wrong answer – the only answer is the one that is right for you!

So let’s look at a few things to consider when researching this particular question, and be sure and first ask yourself:  What’s more important to you – monthly cash flow, risk, or time invested?

First, understand that the property investor is willing to pay a higher rate of return if you invest with him for a longer, rather than a shorter term.  He’ll also pay a higher return if you’re willing to collect your payments at the end of the investment rather than wanting something every single month.  And of course, he’ll pay you more if you are willing to subordinate to 2^nd lien position.

The reverse is true:  traditionally, you’ll get a lower rate of return if you want your interest paid monthly, invest for a short time only (6 months) and want only 1^st lien position.

You should also consider the following:

1. Is there cash coming in on the property? In other words, if the investor is rehabbing the property with the intent of reselling it, there isn’t any money coming in to make payments every month.  On the other hand, if he is renting the property out long term, he should be able to afford monthly payments.
2. Get a statement every month. Even if you elect to receive a higher return and not cash out until the end of the investment term, you should ask for monthly statements so that you know what your money is earning, each and every month.
3. Do You Need Cash Flow? We have several private investors that are retired and really want, and benefit from, monthly cash flow.  They love this option over that of the bank, mainly because they’re getting a higher rate of return and they’re getting a check every month.  In this way, they can live off the interest of their investment without touching the principal.

We also have investors who appreciate a little higher return – they’re very comfortable leaving their interest in the investment until the end of the investment term, at which point they cash-out both their initial principal and all of the accrued interest.

Does the Investment Need a Lot of Capital?

A lot of investments require that you have at least $100,000 in order to invest.  And while that’s great for people who have acquired significant capital, there are also a lot of people who have smaller amounts that they, too, would like to invest.

One of the great things about private lending is that you can get into a high yielding secured investment for not a whole lot of capital.  Granted, when you’re first starting out and only want to invest smaller amounts, you’ll probably be taking a 2^nd lien position.  Sure, they’re a little riskier than 1^st liens, but remember, they usually also pay more than 1^st liens.  And the really great part is that on many 2^nd liens, you can invest as little as $15,000, and sometimes, even less.

That’s not to say that a good investor can’t help you place large amounts, too.  The difference will be both in the lien position as well as the collateral itself.

The bottom line is that once again, you are the final decision maker and you need to do what is right for you and meets your investment needs.

Is the Investment ACTIVE or PASSIVE?

One of the things that you should consider in any investment is whether it is an ACTIVE one where you’re required to work to get a return (as in buying a house that needs fixing-up) or is it PASSIVE, meaning that your money does all of the work for you.

We work with some active investors, though not as many as you might imagine.  An active investor wants to be involved with the property – we consider an active investor more of a JV partner and as such, they are actively involved in the decisions about what property to buy, how to structure the deal, what improvements to make, when and how to sell the property and how much to sell the property for.  This active participation generally helps to distinguish the relationship from a “security” that would require registration or exemption from registration.

Some of our active investors are working with us on commercial projects; others like to see their money at work and, having nothing else on their hands, like to be at the job site “overseeing” the work every day!  Hey, to each their own, right?

On the other hand, we have a lot of passive investors, too.   These are people who are content just knowing that their money is working for them, 7 days a week, 24 hours a day, and they don’t have to lift a finger!  Their money accrues interest every single day whether they’re at work, at home, or on some island in the Caribbean!

Again, you need to do what is right for you.

Do You Need a License to Do This In Your State?

State and Federal Lending laws were designed to protect “Ma & Pa” consumer from the evil lending conglomerates!  LOL!  Okay, so may all lenders aren’t evil, but the Fair Lending Act (FLA), the Truth in Lending Act (TILA), the Real Estate Settlement and Procedures Act (RESPA) and their corresponding Regulations X and Z were designed to keep the so called big boys from trying to pull the wool over the eyes of the consumer.

That said, in most states, you do NOT need a license to be a private lender, provided that you are only loaning your own funds and not those of someone else.  You should, however, be aware of several things that may affect your loan:

1. Usury: You don’t ever want the interest rate of your loan to exceed your State’s usury laws.  If you stay in the market range of 2-3 times bank rates, you’ll be fine, as no state that I know of has a usury rate that’s 10% or less.
2. High Cost Lending Laws & Section 32: Back when the lending industry went crazy, individual States as well as the Federal government imposed interest rate limits on home loans, saying that anything that exceeded these “high costs” must be fully disclosed as a “high cost loan.”  Now granted, the original intent only applied to owner-occupied refinances.  Special interest groups, however, rallied around this concept and so, the High Cost Lending in most states is seen as anything over 12%.

YOU DON’T HAVE TO WORRY ABOUT THIS IF…

1. You run everything by an attorney.  A good closing attorney will NOT let you close a high cost loan without all of the proper documentation.
2. You keep the interest rate at going market rates for private real estate loans:  somewhere in the neighborhood of 2-3 times normal CD rates.  That will pretty much insure that you don’t run afoul of either usury or high cost lending issues.
3. Occupancy: Some states have pretty stringent homestead laws, protecting the homeowner who actually lives in his own property.  These laws do NOT apply to investment properties owned by an investor.  So, to protect you, I would highly suggest that you do not loan money on owner-occupied properties but rather, only on investment properties.

Private Lending is a Great Investment

Let’s go back and review the 7 (or was that 8?) things to consider when making an investment.

You want an investment that is secured, insured, relatively liquid, high yielding, doesn’t require a lot of capital, provides cash flow, is passive and doesn’t require licensing!

You’ve learned how to find the right answers to these questions, and you’ve also learned that Private Lending provides opportunities in all of those areas.

So How Do I Get Involved?

Now that you’ve decided to learn more about private lending, the next step is simple:  pick up the phone and call me (my information’s on the Website) or drop me an email.  I welcome the chance to meet with you and tell you more about this tremendous opportunity.