Be a lender and an investing partner and get a secured, consistent monthly return AND investment ownership 

 

• Secured 1st lien mortgage on the property 

• Larger capital investment per transaction: $100,000 - $500,000 

• 7% - 12% annualized returns depending on LTV 

• Monthly Principal and Interest payments 

• 40% - 50% ownership position per investment 

 

This loan is provided to purchase the property chosen by our seller financing buyer. We set up an LLC to purchase the property. The 1st lien investor funds 70-90%* of the purchase price. The investor gets a preferred return based on the LTV provided. The investor also gets a membership interest in the LLC of up to 50%.  The investor gets paid their preferred return FIRST as the LENDER before any member profits are disbursed (just like a bank gets their mortgage payment before investors can take a profit). After the preferred return is paid to the investor the remaining proceeds are split between the members.  

 

This option is for investors looking for higher returns by combining a safe investment for their funds with upside profit which typically comes with the seller financing investment.  This investment option includes providing a mortgage (a Note secured by a Deed of Trust) in first lien position plus an ownership interest in the property.   This loan is provided to the LLC that we establish to purchase the property, not to the seller financing buyer.  Therefore, the loan is secured by the LLC, not by the seller financing buyer.   The members of this LLC are our company and the lender (since the lender is also a co-owner).   

 

If the seller financing buyer does not make a payment the payments to the LENDER stop under seller financing buyer payments resume.  Interest continues to accrue in the LENDER’S favor while payments are suspended.  Payments to the LENDER resume when seller financing buyer payments resume.  If the seller financing buyer does not pay loses the property to our LLC via foreclosure the LENDER’S loan will be brought current from the down payment received from a new seller financing buyer, or will be paid in full if the property is sold traditionally.  The LENDER gets paid first, before any profits are taken by the members. 

 

Three levels of protection 

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1. First, payments received from our seller financing buyer (who is making monthly payments and who provided a large down payment to purchase the property) are used to pay this loan. 

2. Second, our LLC is responsible for the payoff of this loan if the seller financing buyer does not pay. 

3. Third, in the unlikely event the lender does not receive payment from either the seller financing buyer or our LLC, the LENDER is protected by a first lien on the property. The LENDER can force a trustee sale and get paid in full or obtain full legal ownership of the property. 

 

*LLC ownership can vary from 40%-50% depending on seller financing buyer down payment and amount of ownership provided to 2nd lien investor. 

 

With a first lien, the investment is secured in first position with a Note and Deed of Trust (like a mortgage in many states) meaning you are the first to get paid above all other liens placed on the property (except property taxes).  Your investment is protected by trustee sale (foreclosure) rights just like the big banks. If you do not get paid you can foreclose and take full ownership of the property.   

 

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Don’t want to partner?   Be a first lien investor and get a secured, consistent monthly returns.