Private Money Lending: Top-Secret Investment Strategy
Every investor is looking for the safest way to invest his funds. The safest investments are considered to be in financial vehicles such as CDs as well as government guaranteed funds and the more traditional savings accounts. Sadly, these days, these are leaving the investors susceptible to risks of inflation, since the yields on them are very low and, most importantly, they trail cost of living increases. So the main question that most people have is how the high net worth investors are able to avoid all those dangers?
Well, private money lending actually is the key to ensure high yielding as well as secure ways to avoid all the associated dangers. A lot of wealthy investors are trusting their money advisors to locate and vet the best deals. Still, even the accredited investors, who do not have such means, will also be able to use this possibility.
Sure enough, private money lending is deemed as a somewhat private affair between loved ones or friends and it hence involves little to no paperwork as well as a handshake. However, such deals are not meant for the nervous individuals and will need to be avoided by the more prudent investors. However, the private money lenders are bringing private borrowers and lenders together, managing the whole process.
These transactions that are being brokered by the private lending companies are involving the usage of first trust deeds. These deeds are being used in order to secure any monies that were loaned by the investor.
The loan value is also very much discounted against the overall value of the property for security purposes. Generally, only about 70% of the overall value is loaned. In case of the default, the investor will foreclose and sell the properly on time and in a beneficial manner.
Furthermore, do not forget that the first deed trusts deliver higher return rates for a guaranteed time period.
The final benefit of the private money lending is how convenient the provided brokers’ services really are. These agencies are offering the resources to locate the properties, vet the borrowers and make sure that all the required documents are completed. In addition, they will be able to deliver reputable third party resources who will service the overall loan. Finally, the investor may choose to review all the details of the deal with the financial advisor or consultant in order to make an informed decision.