What does "raising capital" mean here?

Raising capital is just jargon for getting funds for a real estate deal. You can raise capital from all sorts of places, like private lenders, investors, or regular banks.

What's private money lending in real estate investing?

Private money lending is when a private party or company lends capital to a real estate investor. It's an alternative to regular financing, often having flexible loan terms, which is a big plus for property investors.

Do you classify your private lenders? How?

Sure, we sort our lenders into three types. Type A likes long-term investments with consistent returns. Type B goes for one to two years, and Type C is usually other real estate investors who want to learn and earn a safe return.

If I'm a Type C lender, how can I learn more?

As a Type C lender, you're part of the process, seeing our team's work, documents, and procedures. You can chat with our team and learn from what we do, helping you in your future real estate investments.

How much should I invest to become a private lender?

This depends on the property's needs and our agreement. It could be as low as $5,000 or even several hundred thousand dollars.

How do you plan on paying off your private lenders?

Private lenders can get their money back in one of three ways: from the rent money the property makes, by selling or refinancing the property after its value goes up, or from a payment schedule agreed in advance. The specifics are usually in the loan agreement.

Can I get my investment back whenever I want?

We usually stick to the investment term we agreed on. But if things change, we need a 180-day notice to find other funding. This keeps our finances in check and ensures fair returns for everyone.

Do I have to wait 1 year to see my investment return?

This depends on our deal. Some lenders like to get their money back in 1 yearmonths, others are okay with waiting a bit longer.

Is 10% interest a constant for your private lenders?

Not always. The interest depends on the agreement we make. Some lenders like a steady return over time, while others might want a higher return quicker.

How do you figure out the structure of a private money deal?

Every private money deal is its own beast and can be negotiated based on what the lender and borrower are comfy with. Stuff like interest rate, term length, payment frequency, and loan security can change.

What does being in a 'first position' or 'second position' as a lender mean?

These positions determine who gets paid first if things go south. The lender in the 'first position' is first in line to get their money back from the property if the borrower can't pay up. The lender in the 'second position' only gets what's left after the first lender has been paid.

How can you handle the risk of being in a second lien position?

As a second lien holder, you might feel like you're in the passenger seat, but don't sweat it, we've got a strategy to keep things smooth. We're really picky about our markets – we only buy in areas that have shown solid appreciation for the last five years. Plus, we're not into heavy lifting; we go for properties that are rent-ready from the get-go, meaning we can start generating cash flow ASAP. And we're not just chasing any deals, we hunt for those with positive equity. It's all about making sure our moves are calculated and your investment is protected. We understand that your trust in us is as valuable as the investment itself.

For loans larger than $50K, we offer the option to place a lien directly on the LLC that owns the property, not just the property itself. That way, you're not just backing a piece of real estate, you're having a secured claim on the entire operating entity. It's like having an insurance policy on your investment, further ensuring that your loan is well-guarded. We're not just in the business of real estate, we're in the business of building trust and security with our partners.

What is Creative Finance in real estate?

Creative Finance is basically financing that thinks outside the box. It includes methods like seller financing, private lending, partnerships, lease options, and more. It's a cool way for investors to buy properties without using their own cash or going through traditional lenders.

What's a "subject two" deal?

A "subject two" deal is a type of real estate deal where the buyer takes over the seller's mortgage payments, but the original loan stays in the seller's name. The buyer gets the keys to the property and makes the mortgage payments for the seller.

What's "cash outlay"?

Cash outlay is the initial wad of cash needed to secure a deal. In real estate, this might include stuff like down payments, closing costs, or money for renovations.