Finding Private Lenders

My blog continues with tips from real estate investor Chris McClatchy on how to find private money. A lot of private money comes from sellers doing owner financing, or investors looking for a better return on their money than what they can get in the bank, or from people wanting to invest for higher returns in a self-directed IRA.

Other than sellers, how does a borrower find these folks with private money?

Again, speak up within your network and sphere of influence! Let people know what you need, by reaching out through various social media and "touches."

Touches may be coffee, lunch with a friend, phone calls, email, newsletter, blog, social media/websites.

McClatchy's lenders have included a friends mom, business owners, coworkers, other real estate investors, a banker referral to clients wanting more interest, even an NBA player and a bank employee.Tell everyone!
 

Borrowing private money is not about you, as much as it is about the lenders.  What are their goals and timelines?  Their financial situation.?  Do they want to increase their monthly income? Get a   return they can't find elsewhere?  

Real estate investors are creating jobs, supporting the local economy, building community and improving neighborhoods.  Give people the opportunity to invest in something that does so much good for their city. 

Private lenders want to avoid the Enrons, Bernie Madoffs and losses.  One way to prevent abuse is to be sure that a lender's funding is secured by property.  

It is up to the borrower to build relationships, educate potential lenders to get the appointment to sit down and discuss private money.  Send thank you notes and appreciate those who believe in you.  

Make prospective lenders curious with your elevator speech, e.g. "I rob banks legally."

Be excited! Use simple language, not so much real estate terms.  For example, "The rent more than covers the loan I need;"  "I buy real estate with people tired of getting low returns and tired of the stock market gamble;"  " I share real estate deals with people looking to put money to work...private lenders"   

Be credible, be on time.  You must be sure about your deal and project confidence.  If you're not, why would they be?  

Protect their investment by sending money directly to the escrow company.  Ask if they have any questions?

Chris McClatchy usually asks for a 5 year term on a private loan.  But he adds that the lender could call the loan with 6 months notice.

Ask for and provide testimonials and referrals- "would you be comfortable telling people that we met your needs? and paid as promised or better."  

Pay your private lenders a week early,  and they usually re-up on your next real estate deal.  Send cards and notes with payments, letting your private lenders know how much you value their support, or keeping them posted on your progress.

So start searching for your private money today!

Happy New Year!
Happy Investing!

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14 Ways to Avoid Capital Gains Tax

1.) Match Losses - Investors can realize losses to offset and cancel their gains for a particular year. 2.) Primary Residence Exclusion - Individuals can exclude up to $250,000 of capital gains from their primary residence ($500,000 for a married couple). 3.) Home Renovation - Sharp real estate agents and home renovators make their under-market investment purchases their primary residence...then flip the houses, selling for a better sales price but avoiding any tax on their gains via the primary residence exclusion. 4.) 1031 Exchange - You can avoid capital gains and depreciation taxes by rolling the proceeds of your sale into a similar type of investment within 180 days. 5.) Stock Exchange - Stock investors with highly appreciated securities can also do a like-kind exchange.

(go to article)

6.) Exchange-Traded Funds - ETF's use stock exchanges to avoid triggering capital gains taxes when stocks move in or out of the index... 7.) Traditional IRA and 401k - If you are in the higher tax brackets during your working career, you can benefit from contributing to a traditional IRA or 401k. 8.) Roth IRA and 401k - Traditional accounts can postpone taxes to a more favorable year, but Roth accounts can avoid them altogether. 9.) Health Savings Accounts - HSA's are one of the few accounts where you can receive a tax deduction for contributing to them... 10.) Give Stocks to Family Members - If you are facing a high capital gains rate, you can give your highly appreciated securities to family members who are in lower brackets. 11.) Move to a lower tax bracket state - State taxes are added on to federal capital gains tax rates and vary depending on your location. 12.) Gift to Charity - Instead of giving cash to the charities you support, you can give appreciated stock. 13.) Buy and Hold - Many investors buy good index funds that never need to be sold. 14.) Wait Until You Die - Most people die holding highly appreciated investments. When you die, your heirs get a step up in cost basis and therefore pay no capital gains tax on a lifetime of growth. Happy Investing! Today's blog from www.Forbes.com courtesy of  DJ Vyzis, Sales Executive, Veristone Capital

FREE Webinar on Real Estate as an Alternative Investment

Now that the stock market has hit an all time high and real estate is just starting the most significant recovery since the great depression, a lot of investors are looking to allocate some of their capital to alternative investments such as real estate.

The question is....Can you do this in your IRA?

Technically, yes you can move your IRA funds to a self directed account and then invest in many alternative asset classes such as real estate (see our Blog on some of the advantages at http://reicapitalusa.com/blog/).The big financial institutions that act as custodians for most IRAs generally limit investments to publicly traded stock, bonds, mutual funds and bank CDs. Why? Mainly because that is where they make a huge profit on managing your retirement funds-- regardless whether you have a profit or loss!

So to gain complete control over your IRA fund investments, you’ll first need to move your IRA to one of about two dozen smaller custodians offering self-directed IRAs. Once you have a self directed IRA, you can then begin to place funds into real estate investments which can yeild tremendous returns-- if managed correctly. See our full description of how this works at http://reicapitalusa.com/sdira/

Last year Forbes.com published an article titled "Go Rogue With Your IRA" where they described how some IRA holders have found very creative alternatives to investing with their self directed IRA funds classes ranging from private equity and promissory notes to gold, oil and gas and even livestock. To read the full article browse to the link below:

http://www.forbes.com/forbes/2012/0625/investment-guide-12-laura-harth-rodriguez-stock-bond-go-rogue-with-ira.html

Need More Info?

If you are looking for more information on why real estate is an excellent investment alternative, we invite you to attend our webinar this evening at 6 p.m. PST 9 p.m. EST. It's sponsored by the folks at CamaPlan, a self directed IRA custodian with which we are working to provide their clients alternatives to their self directed IRA investments. You can enroll in the free webinar by browsing to the sign up form at https://cc.readytalk.com/cc/s/registrations/new?cid=5fozvkk7dty7

This is a "no selling" educational seminar that will provide you a good understanding of the economic drivers that make real estate an excellent alternative to traditional investment vehicles like stocks, currency or natural resources. We'll also cover the various methods which can be deployed to invest in real estate from active "hands on" tactics to completely passive ways to build your wealth with distressed and rental real estate.

In this presentation you will learn:

The key economic drivers that benefits real estate

How market and demographic cycles are used to increase ROI

How to identify and evaluate real estate asset classes

The operational requirements to be a successful real estate investor

Funding strategies that fit your abilities and goals

How to use a self-directed IRA to invest in real estate

The presentation will last about 35 minutes then you can post questions near the end which we will answer live during the Q&A.

We look forward to seeing you online tonight at 6 p.m. PST!

P.S.: If you can't make the webinar, but want to learn more about using your IRA to invest in real estate, please give us a call at 425.270.7292 to set up a time to meet with us to discuss your needs and answer any questions.

Wendy Ceccherelli and Bob Malecki

Investing in Value-Added Real Estate - Free Webinar

Are you looking for an alternative investment that outperforms inflation?

One that allows you control over its value?

One that provides excellent risk diversity?

If you answered 'yes' to the above questions then you should be interested in how real estate investing provides these benefits. To learn more about how Real Estate can be an excellent asset class with high growth potential, join us for a free webinar, co-sponsored by CamaPlan, at 5pm, Tuesday, March 26. Click here for registration.

This is a "no selling" educational seminar that will provide you a good understanding of the economic drivers that make real estate an excellent alternative to traditional investment vehicles like stocks, currency or natural resources. We'll also cover the various methods which can be deployed to invest in real estate from active "hands on" tactics to completely passive ways to build your wealth with distressed and rental real estate.

In this presentation you will learn:
The key economic drivers that benefits real estate
How market and demographic cycles are used to increase ROI
How to identify and evaluate real estate asset classes
The operational requirements to be a successful real estate investor
Funding strategies that fit your abilities and goals
How to use a self-directed IRA to invest in real estate.

Click here to register for the March 26 webinar at 5pm.

There are truly many advantages of investing in real estate and more millionaires have made their fortunes in real estate than anything else! Here is what some of the wealthiest Americans have said:

“Real estate is the basis for all wealth.”
-Theodore Roosevelt

“Buying real estate is the best, safest way to become wealthy.”
-Marshall Fields

“90% of all millionaires made it through real estate.”
-Andrew Carnegie

"I'd Buy Up 'A Couple Hundred Thousand' Single-Family Homes If I Could"
-Warren Buffett

Join us at 5pm, Tuesday, March 26 to learn how you can prosper from investment in value-added real estate. Show up at your computer at the designated hour and click here to join us for this free and informative webinar.

For more information, please contact info@reicapitalusa.com or Wendy Ceccherelli at 425-270-7292.

Tight Credit Drives Private Lending

Although the economy has shown some signs of improvement, there continues to be a scarcity of bank lending. Many entrepreneurs and businesses seeking capital are turning to private lenders, who may be able to offer more flexible terms and conditions to qualify for a loan. Investors can use their self-directed IRA accounts to finance private lending, creating arrangements that are mutually beneficial to both borrower and lender.

Demand has been slowly starting to strengthen for business loans, residential mortgages, and commercial real estate lending in early 2013. However, most U.S. banks are still reluctant to issue loans in the wake of the 2008 global credit crisis, according to Bloomberg. In fact, the average loan-to-deposit ratio at the top 8 commercial banks has plummeted from 101% in 2007 to just 84% today.

Even with cash deposits rising, and banks having sufficient capital available to make loans, stricter regulations and credit-worthiness standards have make it more challenging for loan applicants to be approved. There is significant pressure on financial institutions from investors and regulators to avoid risk; with the struggles that many companies and individuals have weathered over the last several years, there are few that have the unblemished credit track record that the banks now want to see.

The bright spot in the scarcity of traditional bank loans is that it has created opportunities in the private lending market.

Owners of self-directed IRAs are able to use their retirement accounts to make loans and investments in a wide variety of endeavors. Private loans can be made directly to an individual or business, with the IRA account holder reaping a substantial return on their investment, just as a traditional bank does when they make a loan. Self-directed IRAs like CamaPlan’s clients are continuing to make private loans for everything from mortgages to notes to buying existing debts.

As the loan issuer, the IRA owner can decide which potential borrowers are reliable, whether to issue a secured or unsecured loan, and set the terms for interest and repayment. Another form of private lending from a self-directed IRA is a private placement, which is not a traditional loan repaid on a schedule, but rather provides working capital to a growing business. Smart private placements can be extremely profitable, because the issuer owns equity in the company, and if the company thrives, the return on their investment will grow exponentially.

Do you have the tools and knowledge to be a private lender? Contact Wendy Ceccherelli at HomeLandInvestment@gmail.com to find out!


-- Submitted by CamaPlan, a self-directed IRA company 3/12/13 (photo courtesy of freepictures.me)