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Private Mortgage Loans as Investments | Add Comment

    • You didn' mention.... 6/28/2008
    A large market for private mortgages are professional real estate investors who are looking for capital to buy properties during a down market. Many of these folks know how to buy a property correctly so that they are going to make a decent profit. The only thing holding them back is a lack of capital and the implications of negative cash flow. Private mortgages are exactly what these investors need. Since the private mortgage lender is going to receive their money first when the house sells they are pretty secure in their investment. Often these investors like myself will structure the loans so that the lender will receive a minimum of 6 months or a years interest no matter how short of time the loan may end up being in force. These investors want to see a pay day so they are looking to sell quickly so it is possible to lend them the same money for 2 or 3 houses in the same year and make double or triple the rate of return because of the minimum interest being paid for each loan. I personally pay up to 12% APR with a minimum of 1 years interest so it is actually possible to earn over a 30% rate of return by the end of the year if the private lender reinvests the funds in another property each time one sells. I am a licensed Realtor and Real Estate Investor in Lakeland, Florida and would like to buy 10 million or more in properties over the next two years. The deals are out there and I believe that private mortgages are the win/win vehicle that is going to turn this market around.

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