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PRIVATE LENDER
PRESENTATION
RE CAPITAL GROUP
www.RECapitalGroup.net
Invest In Real Estate For
Guaranteed Returns of up to 12% Annually
Be The Bank!
Become A Private Money Lender
What Is
Private Money Lending?
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This is where an investor lends their money to a borrower
for one or all of the following, related to real estate:• Acquisition (to include purchase and closing costs)
• Rehab
• Improvements
• Costs related to management and holding of a property until
resale of the property
Any type of these loans are called Private Money Loans
Traditional Investing:
The Difference
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THE TRADITIONAL INVESTMENT:
• Most people try to generate a retirement
income by letting people make decisions for
them
• By the time they need the money, they
discover the money barely keeps up with
inflation
Private Money Lending
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• Wealth with passive investments secured by
real estate offer a safe and very attractive return
• As an investor:
Think of this like holding a Bank CD
Private Money Loans
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• Decisions on the borrower are based on the
value of the collateral, not the borrower
• This makes the investment safe and passive
How Private Money Loans Work:
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• The Investor (you) provides a direct loan to a real
estate investor
• You lend your money to buy / rehab/ improve a
Residential or Commercial property
• The loan is be secured by:
- A Trust Deed on the property (as a short term 6-
12 month “Bridge Loan”)
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In our opinion,
•Private Money Lenders should only lend to
borrowers who want to buy and sell a
property (flip it) for profit as these borrowers
are in business to make money and are not
emotional about the property
•Private Money Lenders should NOT lend to
owners/occupants
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• You’ll lend money short term to the
borrower and charge the borrower interest
for the use of your money they will use for
the purchase and rehab of the property
• The percentage you charge is interest
earned by you!
• This interest stays stable and never
changes like the stock market
Replace The Bank:
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• If you have CD or savings in a Bank, you
are letting money lie around in a very low
interest rate bank account
• Why not turn the table on the bank?
• Why don’t you become the bank?
You, The Lender Third Party Escrow
Investors Escrow
You Transfer Money To The
Escrow or Title company When
The Buyer (Your Borrower)
Closes Escrow
At Close Of Escrow Upon Resale Of The
Property, Funds Go Directly Back To Lender For
The Amount They Lent For The Project – Plus
The % Of Interest They Charged The Buyer
HOW IT WORKS IF YOU ARE SENDING CAPITAL DIRECTLY TO ESCROW
Escrow Holds The Closing
Costs & Title Fees And Pays
Out The Sales Commissions
Escrow Instructs The
Title Company To File
A Trust Deed (Lien)
Against The Property
In The Lender’s Name
Escrow Cuts A
Check To Your
Borrower For
Rehab &
Holding Costs
Escrow Cuts A Check
Directly To The Seller For
The Purchase Amount
The Buyer Rehabs
The Property
And Resells It
Private Investor Q & A:
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#1. Can I use an IRA or 401k to make
loans or invest in real estate?
• YES! It’s your IRA, its self directed
• It is easy to accomplish and it’s only a
matter of moving it to an administrator of
your choice
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You, The Lender Third Party Administrator
Third Party Escrow
Investors Escrow
You Transfer Money To
Third Party Administrator
The TPA
Transfers
Your Money
From Your
IRA Account
To Escrow
Escrow Cuts The Check
Directly To The Investor
Upon Resale Of Property
Funds To Lender Go Directly
Back To Escrow
FBO Your New IRA Account
At Closing
Funds Go
Back To TPA
FBO Your
IRA Account
“Tax Free”
HOW IT WORKS IF YOU ARE USING A THIRD PARTY ADMINISTRATOR
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Making Loans with an IRA
• This is not a rollover with penalties from the
IRS - It’s merely a transfer from your current
administrator to another
Making Loans with a 401k
• If you were to leave your job, the 401k would
transfer to an traditional IRA -Then you can
take control of the funds to start making private
money loans
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#2. Do I have to have a license or something to
be able to loan out this money?
• NO! These loans are a security so you’re not
going to need a license or have to register with the
SEC
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• Only when loans are pooled does it
become a security that needs a license.
• Only when loans get pooled or loaned out
by multiple investors does it become
necessary to have a license (there are
exceptions to the SEC rules that you can
fall within to pool your capital with others )
• Of course you can stick with each
individual loan where you are completely
100% in control
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#3. Do I have to do all the paperwork?
• NO! The Escrow company, Title company or
Attorney prepares all the documents for you and
gets your borrower or investor to sign them.
•If you’re making a loan, they can record the
documents for you that need to be recorded (some
do not get recorded).
• In this case, you would not cut the check directly
to the borrower, they would do this for you!
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• The real estate closing would be done by your
agent (escrow company, title company or real
estate attorney), depending on your state
• The real estate closing agent would be
responsible to receive your funds and make
sure all the documents are in place to secure
your investments before they close!
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#4. Do I know what documents I need?
• Don’t worry, your escrow, title company or
attorney will handle the documents for you
• Always seek help from these professionals
• Make sure the following list is always
complete and all documents are there at the
time of closing or no funds get released!
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Documents for your security
• Titled Insurance issued at closing naming
you, as an insured along with the investor
• Fire insurance with you on the policy, as an
insured
• The original note and a copy of the
mortgage or trust deed (the document that is
recorded) will be given to you
*Don’t worry - All the documents will be mailed to you by the closing agent
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#5. Can this be a long term investment?
• That is up to you and the borrower or investor
• Most loans are short term, repaid to the investor
within 6 months-1 year
• Whatever it takes to meet your and the
borrower or investor’s needs, and your
investment plan
After all, you’re the bank!
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#7. Is real estate a safe investment?
• If you apply common sense and don’t break the
rules, it’s as safe as any other high yield
investment
• Private Money Loans in real estate are
generally safer and generate higher returns
than the stock market or the rates you would
receive on a Bank Certificate of Deposit
account
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#8. Stock market VS Mortgage loans
Stock Market• You’re betting on companies you know little about and
the volatility of the market is out of your control
• Everyday you’re wondering whether you’re gaining or
loosing
Mortgage Loans• With a loan your return is fixed and won’t change
regardless of whether the market is up, down or sideways
• Your loans are secured by real estate
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Remember, YOU become the bank!
• When you make a loan, you receive your return and
there’s no guess work
• You determine the interest rate – and the rule is:
the longer your money is tied up, the more interest you
receive
Examples: ▪ lend money for 6 months and receive 6% interest
▪ lend money for 9 months and receive 9% interest
▪ lend money for 12 months and receive 12 % interest
At the end of the term, you can take your principal + interest
OR you can take your interest only and let the borrower
keep your original investment to put into their next deal,
earning you more money
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• Private Loans are great investments
• They are safe, with high returns backed by real estate
• You are not a slave to the ups and downs of the stock
market and you can reinvest to make continuous
returns
• Remember, YOU get to look at the deal and agree to
the rules or you don’t invest
•You owe it to yourself to check it out and give it a try!
Build Your Wealth:
RE CAPITAL GROUP
www.RECapitalGroup.net
If interested in this investment opportunity,
Contact:
Cheryl Gollnick
(951) 318-6420
Thanks For Viewing Our Presentation
