Transcript Norcal Trust Deed Investing

Herrera
Realty LLC
Generating Wealth With
Private Lending
Agenda
Today, We Will Discuss:
Earning High Yields
Secured by Real Estate
While YOU Stay In Control
of YOUR Money
& Receive MONTHLY Payments
What Private Lending Is NOT!
What is Private Lending?
“Private Lending" refers to a
private individual making a loan to another
individual with real estate as collateral.
You Are The Bank
Your Name Is On The Note and Deed of Trust
Why Haven’t I Heard of This?
Benefits of Private Lending
• Secured by tangible property
• Safety - low risk
– As long as there is value in the property, your
investment is secure
• Great returns
• People are familiar with real estate investing
because real estate ownership is so common.
• Receive monthly payments
Basics
• Let’s assume we have a $500k house in the
San Francisco Bay Area…
VALUE: $500k
PROTECTIVE
EQUITY: $200K (40%)
This is our “protection” - our cushion…
LOAN: $300K (60%)
We lend NO MORE than 60% of value…
Why Would Someone Pay
That Kind Of Interest…?
IMAGINE THIS SCENARIO:
You get a chance to buy a property worth
$500,000, in today’s market, for $250,000.
You have 5 days to close.
The bank will only accept cash.
Do you care if you pay 12% for 6 months
if you can CLOSE on the deal?
Someone WILL Pay Because…
• Immediacy: Access to capital much faster than
conventional lender.
• Asset Based Underwriting: Borrower qualifications can be
subordinate to the value of the property.
• Timeliness: Conventional lenders are not fond of short
term loans
• Improvement Costs: “Rehab Loans” can include the cost
to improve the property, increasing equity
• Number of Loans: Traditional lenders limit number of
loans
How Does It Work?
5 STEP SYSTEM
Remember: YOU ARE THE BANK
Borrower
Requests
Loan and
Submits
Docs
Our
Broker
Confirms
Viability
Investor
Introduced
To Project &
Makes
Commitment
Escrow
Opened &
Investor
Places
Funds
Our Broker
Services
Loan. You
Receive
Monthly $$$
What Does It Cost Me?
Typical Investment
•
•
•
•
•
•
60% LTV
6 months to 36 months
1st Deed of Trust
7-10% Interest Rate
1% Servicing Fee
Non-Owner Occupied, 1-4 unit Residential
properties (mentioned before)
• Properties within 100-mile radius of office
• Rehab Loans for Fix & Flip deals
How Am I Protected?
Every Investment Has Risk!
• Almost all loans will have at least one late payment
– The investor actually gets paid more for that because
the borrower pays penalties.
• A portion will turn in “default”
• A smaller portion will go into “foreclosure”
• Very few make it all the way to auction. Why?
– Protective Equity!
• The MOST important number to look out for in private
lending is VALUE of property
Private Lending vs. Stocks
Private Lending
• Great cash flow generator
– and quickly
• Use OPE (other people’s
experience)
• Use OPT (other people’s
time)
• Passive income
• Relatively secure
• Higher returns than stock
market
Stocks
• Not good for cash flow
• Based on demand and
supply – beyond your
control
• S&P 500 Lower returns
• No collateral
In Summary
Private Lending is still one of the
relatively safest investments you
can make, offering you a high
return with consistent, monthly
cash flow.
Conclusion
Do you know someone who would
like to take advantage of one of
the greatest opportunities in our
lifetime with low risk and high
returns?
Contact: Bill Herrera, Ph.D. at
[email protected]