There are two different types of postcards you can send related to private money: one to your internal list of potential private lenders and one to folks that have already loaned money secured by real estate to see if they might be interested in loaning money on properties you buy.
For both of these mailings, we follow the same basic steps that are described in the Postcard for Private Money Checklist.
In the checklist we walk you through selecting the mailing list you will mail to and preparing the postcard to send.
You can either send the postcards out using the self service US Postal Service or have your mailing house do the mailing for you using the checklist.
Of course, we remind you to remove anyone that is not interested in receiving future postcards from you so that you do not mail them next time you do a mailing.
Until my next post,
James
We are in the home stretch of questions from the private lending FAQs series. Today, I am going to share with you how I answer the question that deals with insurance that we purchase that helps protect our private lenders and ourselves.
The question is: How does property insurance help protect me as the lender?
And here is my answer:
We buy property or hazard insurance to limit our risk and liability as a property owner and to protect the investment for the lender.
If there is a fire at the property that completely destroys the property (or another problem covered by the insurance policy) and the insurance company pays the claim, the proceeds and can be used to restore the property so it can secure the loan against the property.
Until my next post,
James
As we draw down to some of the final questions in our private lending FAQ series, you will very likely want to address the use of retirement funds as a source of your private lender’s money.
The question we answer is: Can I use my retirement accounts to do this?
The answer:
It is very likely that you can use your retirement account to do private lending.
While I am not an expert at retirement accounts, I do have contacts with third party faciliatators that are experts at using retirement accounts to make private money loans and I would be happy to refer you to them where they can discuss your particular retirement account and assist you with setting it up to do private money loans.
With the tax benefits offered by some retirement accounts, it makes putting private money loans in your retirement account an extremely attractive investment.
Until my next post,
James
Here’s another question that you will probably want to answer for your own private lender program. This is how I answer it from my own private lending FAQs.
The question is: How do I know the value of the property I am lending on? And my answer is:
First, if you want an independent third party certified appraiser to appraise the property, we can definitely provide that to you upon request. This is the same type of analysis that banks will typically do to verify value before they lend.
We can also provide you with recent comparable sales of other properties that are similar to that property and that are near that property. This can give you a very accurate idea of what the property is worth after all the repairs have been completed.
Should the property need repairs (and many do), we can provide you with a list of the repairs we plan to do on the property and what we expect those repairs to cost.
If there is anything I can do to help you feel comfortable about knowing the value of the property that is securing the loan you are making, please do let me know.
Until my next post,
James
Today I will be answering yet another question from the private lending faqs. Today’s question is: How frequently do I get payments on the loan?
Here is my answer to our private lenders:
The frequency of your payments is determined by the loan agreement between you as the private lender and us in advance of the loan being made. The agreement is outlined in the note which is prepared by the title company, escrow company or closing attorney.
If we agreed to make monthly payments, you should expect payments to be made monthly.
If we agreed to let the interest accrue and for you to receive a check with the original loan amount plus all interest due at the end of the loan period (or when we sell the property), then you can expect to receive one lump sum payment then.
Until my next post,
James
Today, we address an important question from the private lending FAQs that you will likely want to prepare as you put together your own private money program for your own real estate investing.
The question is: What is the minimum I can invest? Here is my answer to it:
Since we do not pool money from multiple private lenders together to do our deals, the deal itself and how much is needed to fund the deal will often dictate how much the minimum you can invest is.
With that being said, the minimum you might expect is probably around $10,000 as few deals that we would do would require less than that.
Until my next post,
James
