As one of our Private Investors – YOU are viewed as our biggest asset. Without you there would be no Private Money company! You provide the revenue that allows Borrowers to become homeowners and provide that alternative real estate financing when a Borrower is unable to get financing elsewhere.
When we bring you a Trust Deed to invest, we always strive to be diligent & as transparent as possible, to support the confidence and trust you place in us.
Therefore I thought it would be fitting to let you know what goes on behind the scenes here at our office before an investment opportunity is prepared for your viewing and investing:
#1. To start, we have a fantastic promotional/advertising team. We have built up our platform to almost 300 separate Lenders and Brokers sending us their Private Mortgage Loans for funding. Initially, we do have set qualifications we review for each Borrower, including loan to value, loan amount, location, and property type. If the loan to value is within our parameters, the loan amount is reasonable, and location is within California or another State that we are licensed to lend in, we will take the next steps to continue the loan.
#2. We obtain necessary information & verifications about the Borrower, including a loan application, credit report, preliminary title report from Title/Escrow, something showing the borrower’s income & assets, and something showing property valuation. Valuation might be derived from an appraisal, BPO, Comparative Market Analysis, an average of online sites, etc. We also speak with all Borrowers directly, no matter their age, to ensure they duplicate the loan terms and there are no unanswered questions.
#3. After determining what appears to be a legitimate Borrower with a lendable property, we work with Title & Escrow to obtain all needed payoff demands and Title clearances. We do this to ensure that you as the Lender are provided with a clean and clear Title report with the best possible Title insurance we can obtain.
As a note, many other Private Money companies do not obtain anything showing income or assets but instead lend solely on the equity in the property. This type of lending is equity-based Private Money. While this is typical with many Private Money companies, we feel that it is valuable to also get a glimpse into the borrower as well as the property. This is why we go the extra step of getting income and assets from the Borrower. If there is a lack of income or assets, we might require a reserve account to be set up for the monthly payments to be made, assisting the Borrower in making their payments until they can execute their exit strategy.
#4. At this point we promote the loan as an available Trust Deed Opportunity via email. This is done 2X a day (typically around 10:00am & 2:00pm), as we get new opportunities. You would simply respond to the email if you have any interest or questions; you are not approving the loan by responding to the email, just letting us know you interest so that we can send you our due diligence via our submission. This will come in a hyper-link which includes all items we’ve gathered thus far, for your due-diligence on the investment opportunity.
As a note, we get about 60 new loan requests a week for loans. You will see only about 25% of these! The other 75% we will turn down for a number of reasons such as: too high of an LTV, documents provided appear to be fabricated, value of property too questionable, no plan to get out of the Private Loan, etc.
#5. After you have done all of your own due diligence on the investment opportunity to determine if this Investment is a good fit for you, you would let us know that you approve the loan. At that point we send you our Investor Approval Forms to sign up for the loan. Our in-house Processors will then prepare Private Money Loan Docs and any other required forms for Title. Our Processors will work with you from this step, through the funding and closing of the loan.
Besides having one of the top private money attorneys on retainer, we also attend bi-annual Private Money Conventions to ensure we remain up-to-date on any and all changes to Private Money lending regulations. Yearly we maintain our Continuing Education requirements with an 8-hour Mortgage Licensing Continuing Education Course, and every 4 years we do a 20-hour Continuing Education Course through the Department of Real Estate. This is in addition to the regular updates and newsletters we receive from the numerous Federal & State Agencies that we are governed by, Private Money legal counsel, as well as other Opinion Leaders in the real estate & mortgage industry.
So, there it is, a glimpse into what we do here behind the scenes to bring you our available Trust Deed opportunities!
