Private Money Lending

We originally started this program because we realized that there were a lot of contractors and borrowers just like you that were really good at finding great deals but were having a challenge finding enough money to fund the deals, or they were looking to scale their business substantially and didn’t have adequate capital resources.

We decided to build a program in which borrowers who are looking to fund more of their deals can team up and get their deals funded.

Our borrowers and contractors love it. It has been a huge success!

Now, we realize this model isn’t for everyone but for the ones it works for, specifically investors and investor-contractors that have more deals than money or investors that really want to scale their business, it works really well.

We’ve built strong, long lasting, working relationships with borrowers that have completely exploded their business. The real key is they realized the value in having, basically a money partner-type lender. Now they can spend all their time doing what they’re really good at and have a passion for, and that is finding and completing super good deals.

So whether you’re looking to scale your business exponentially, or you just need additional capital to fund your deals, this program may be just what you’re looking for.

We are looking for only well qualified, very experienced contractor-borrowers, or borrowers that can show they have a very solid team to complete the projects.

How private money lending works.

First of all, our goal with this program is to fund as much of your project as possible. Sometimes this can include the purchase price, rehab price, interest reserves, points and closing costs as long as it meets certain criteria; two in particular.

Number One:

We will need to show that everyone has skin in the game. This can be done with cash, cross collateral property, or even subordinate seller carry back. Generally we will need to see approximately 10 to 15% of the total loan amount as skin in the game.

Of course, a cash down payment is the most straightforward way to cover the 10% to 15% requirement. If you or a co-investor of yours can put that money in place, the rest of the process becomes easier.

Cross-collateral property just means that you use another non-owner occupied property that has adequate equity in it for additional collateral to make your project meet the loan to value ratio requirements. This may be a property that you own, or you may even have an associate that is willing to join you in your project that has qualified cross collateral property.

Subordinate seller carry-back just means that the seller of the property is willing to take back a note and deed of trust, or mortgage for a small portion of his equity at the time he sells his property to you. By doing this it can generally allow the property to qualify because your loan to value ratio will be lower.

And number two:

We need to be sure that the total loan to completed value ratio or ARV does not exceed generally 70% of the after-repair or as-completed-value.

Once we know that the numbers are solid here’s how the program works.

We’ve set it up so that everyone gets compensated by the project, for what they bring to the project.

Here’s our project that we need to get funded. Now as a lender participant we put money into the project. In exchange for that we get interest, generally 12% interest, which is paid by the project. If you, as the borrower participant put cash into the project you get the same rate of interest on the cash you put in as well. If you put work into the project you get paid the standard going rate for that work that any other contractor would get paid. This too is paid by the project.