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Private Investing Process
1. Private lender invests
1. Private lender invests
1. Private lender invests
2. Supporting documents
1. Private lender invests
1. Private lender invests
3. Purchased Real Estate
1. Private lender invests
3. Purchased Real Estate
4. We Renovate
6. Principle + Interest is Paid
3. Purchased Real Estate
5. We Sell or Hold Real Estate
6. Principle + Interest is Paid
6. Principle + Interest is Paid
You choose between long & short term opportunities.
6. Principle + Interest is Paid
6. Principle + Interest is Paid
6. Principle + Interest is Paid
How the Process Works
How the Process Works
The process is simple. We find a property that fits our Mission and Goals - you let us know you are ready for the opportunity and disburse funds into a secure investing account.
We then purchase and renovate the property for either retail sale or long term hold and find quality renters.
If it’s a renovation investment, the next stage is the property renovation. Once the renovations are complete (typically 3-6 months depending on the size of the project), we’ll list and sell the property with one of our preferred agents. When it’s time for closing, you’ll receive your principle plus the interest payment. It’s that simple! The goal is to keep turning that money for you and keep you making substantial profits so you keep coming back to us – building a long term mutually beneficial relationship.
If it's a long-term rental, you earn a steady interest based on the rental income of the property. We promote home ownership and many times our renters end up buying the home they are renting. Once the renter obtains a mortgage to purchase the home, you receive your principle plus interest and we'll help you find the next investment.
Investing in financial & real estate involves some degree of risk. Please view our disclaimer.
We Follow a Strict Due Diligence Process
We have a systematic and disciplined approach when in comes to investments, putting each potential investment through a strict due diligence process. This rigorous set of criteria includes, but is not limited to, the following:
• Comparable property analysis and examination by an certified, independent appraiser
• An economic study of the neighborhood, city planning and development
• Demographics of area, marketability, and growth potential
• Statistics on the crime rate
• Public transportation and schools
• Overall condition of the property, including heating and air, plumbing, electrical, roof and structural condition
Competitive Advantage
Our company can acquire great deals on properties because we have programs in place to assist the seller, as well as the ability to act quickly and close on the seller’s timeline. This is why we can buy properties at a fair price. We are then able to provide generous lending opportunities to our investment clients that give us a competitive advantage.
We have an aggressive TEAM approach, and a top-notch ability to expand our client base through our knowledge of deal structuring and advanced real estate techniques.
We also employ marketing strategies as soon as we purchase a home. Often times, we are able to find our own buyers allowing us to secure a strong sales price and save on sales commissions. Our renovation process is also down to a science with handpicked and proven construction team who know we are not retail clients. We pay wholesale prices to all contractors and typically get bulk discounts on all materials.
Investing with us provides a win-win for the homeowner. We can offer homeowners something that very few companies can. We are helping sellers by purchasing their homes in their timeline -- in as little as 10-14 days. Knowing that we’re going to renovate the home and we are buying in as-is condition is a very important factor to sellers who live in older, outdated homes, or those needing repairs. These sellers will also not be required to pay any attorney fees, closing costs, home warranties, inspection fees, realtor commissions, etc. We are not the perfect fit for everyone; but for the seller with the right motivation, these features are a necessity.
Advantages to Working With Us
• We have the business systems and knowledge to purchase properties QUICKLY
• We create value by finding properties in poor condition, strengthening them and putting them back in use after renovation
• We pay wholesale prices with our contractors and typically get bulk discounts on all materials
• We find our own buyers allowing us to secure a strong sales price and save on sales commissions
Investment Buying Criteria
Strengtheing Homes, Communities & Lives
Our goal is to buy and strengthen homes in stable areas where there is still strong buying demand. Part of our grand vision is to improve the overall quality of living, ultimately strengthening live. By investing in real estate in Honolulu you are improving the overall quality of life, we are committed to increasing the value and strength of our communities by rehabilitating properties. We are able to target poor condition properties and breathe new life back into them by renovating and improving the condition of the property. By doing so, we are able to create beautiful homes and encourage home ownership.
The ability to identify a wise real estate investments is certainly a learned skill. We have been thoroughly trained and possess this skill - along with the intuition to spot these great investment opportunities in today’s market.
Not every opportunity is a “good deal”, and we have built our company on a sturdy foundation knowing our numbers. Invest in real estate knowing that if the numbers don’t make sense to us, it certainly won’t make sense to our investors. Our goal is to be in business for many years and brand a company that will be passed down to our children, which cannot be accomplished by taking uncalculated risks.
What is Private Investing?
A private investment is very much like a mortgage loan, secured by real estate. Investors are given the opportunity to secure their funds to real estate, which in turn secures their legal interest in the property and secures their investment. When we have secured a home, we give our private investors an opportunity to fund the pre-purchased, purchase and/or rehab of the home. Through that process, the investor can yield extremely high interest rates – 4 or 5 times the rates you can get on bank CD’s and other traditional investment plans.
Essentially, private investing is your opportunity to become the bank, reaping the profits just like a bank would. It’s a great way to generate cash flow and produce a predictable income stream - while at the same time, provide excellent security and safety for your principle investment. You can do what banks have been doing for years…make a profitable return on investments backed by real estate. There is no other investment vehicle like it.
"Through private investing, you have the Opportunity to become the bank."
Benefits of Private Investing
You, as the private investor can benefit greatly. A real estate mortgage/deed of trust provides you with the security you would not get with other investments. You also have added layers of protection because of how we operate.
We currently pay 4-5 times what a typical bank CD is paying. Our rates will fluctuate depending on the purchase price, rental and/or rehab involved. Private investing means you can relax while the money is in a safe place, working for you.
Lender Protection
How Your Money is Protected
Mortgages offer the banks solid, long-term, fixed returns. You can put yourself in the position of the bank by directing your investment capital, including retirement funds to well-secured real estate mortgages. Mortgages have ultimate safety because if default occurs, the bank can recover its investment as the first lien holder on the property.
Each property we acquire is put through a rigorous evaluation process in order to assess the profitability before the property is ever purchased. “lntegrity" is an essential part of our business, and we only make sound investment decisions. Also, for your protection, you are also provided these documents to secure your investment capital:
Promissory Note: This is your collateral for your investment capital.
Deed of Trust/Mortgage: This is the document that is recorded with the county clerk and recorder to publicly secure your investment against the real property that we are providing as collateral
Hazard Insurance Policy: This is where you as the private lender would be listed as the “Mortgagee” for your protection in case of fire or natural disaster, etc.
We also ensure a title search as well as a title policy on the home just as we would in a typical transaction. For a rental investment with a long-term note, we always keep a valid hazard insurance policy on the property to protect against causalities. You’ll be named as a mortgagee and notified if the insurance was not kept current. In the event of any damage to the property, insurance distributions would be used to rebuild or repair the property, or used to repay you.
Private Investing Options
Cash
Personal & Business LOC
Personal & Business LOC
Cash held in most types of bank accounts can be accessed quickly and can fund your deals in minutes, instead of hours or days. Fees are generally minimal for wire transfers and cashier’s checks.
Personal & Business LOC
Personal & Business LOC
Personal & Business LOC
Personal loans and “signature lines of credit” can be obtained from most banks or credit unions by anyone with good credit and a stable income.
Retirement Accounts
Personal & Business LOC
Retirement Accounts
More and more private money lenders are using their IRA funds to invest in real estate. A self-directed IRA is essentially the same as a traditional IRA, but allows you to purchase a broader range of investments, including real estate
HELOC
Liquidated Securities
Retirement Accounts
Home Equity Line of Credit
A home equity line of credit is a very powerful source of funding that many people have and don’t even think of. Unleveraged equity is dead money and it’s not making any interest. You can easily tap into that money. It’s a way to make sure you’re in first position when we’re ready to pull the trigger and buy a property.
Liquidated Securities
Liquidated Securities
Liquidated Securities
Investments are a way to put your savings to work earning more money. However, if your stocks and investments have not performed as you had expected, it might be time to consider other investments. As you know, stocks can be liquidated as and when you wish. Sometimes you need to liquidate your investments because you need the money for something you want to purchase such as real estate.
Invest in Real Estate with Self Directed IRAs
What is a Self Directed IRA?
Most people think that an IRA can only be used to purchase investments, like stocks and mutual funds. But that’s not true! You can get private mortgage loans using the funds which are already in your IRA’S and other retirement plans.
As it pertains to lending for real estate investments, enter the Self-Directed IRA. The IRS has set forth guidelines on what you can and cannot invest in with your IRA. Many people are surprised at the scope of options available. From tax liens, gold, real estate investments and real estate notes, IRA’s are much more powerful than most people ever realized. If you add to that power of a Roth IRA which allows you to enjoy your earnings tax-free or deferred, and you’ve got a fast road to an easy retirement!
However, in order for you to use retirement accounts for loans, they must first be administered by a third party custodian. After selecting your custodian, you simply send a transfer form to them and they’ll do all the work for you, once you've done that you are ready to make private mortgage loans. We would be happy to recommend a local custodian we’ve worked with in the past who can assist you with setting up your account.
Investment Terms & Conditions
Minimum Investment
When working with private investors, $10000 is our average minimum standard investment. When first investing with us, a lower initial investment amount may be agreed upon to ensure you’re confident when working with our company.
Mortgage Terms
The majority of our loans are set up on an 12 month notes; however, it depends on the size of the project. If we are doing a new build or teardown and rebuild, we will have to wait on the county inspectors for many approvals - thus causing delays. We account for all of those details upfront and will give you an estimated time frame for the return on your investment. Also, we do not pool funds - your funding will be tied to one piece of property secured by a deed of trust.
Payment Schedule
Typically, we pay one large lump sum at closing on a short-term note. This is much easier to manage for both of us, especially if we’re working out of a retirement account.
1st or 2nd Lein Position
The Investor, as “mortgagor,” has the right of first lien holder and Power of Sale on the property. The 1 st lien position is placed behind a senior mortgage. You are probably used to hearing the term first and second mortgage. The second mortgage is a junior lien because it’s in 2nd position. The senior lien or first mortgage must be paid prior to the 2nd lien.
Investment Disclaimer
* Investing in financial and real estate markets involves a substantial degree of risk. There can be no assurance that the investment objectives described herein will be achieved.
** Past performance is no guarantee of future performance or that such investment opportunities will become available. These materials are intended only for discussion purposes and should not be relied upon in evaluating the merits of investing in any investment or security. Potential investors who express an interest in investing will be provided detailed information based on the investment opportunities available.