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The Equity Experts Real Estate Equity Investing & Hard Money Lending
Borrowers Home Equity Lender

PRIVATE HARD-TO-DO-LOANS AT RATES FROM
12-20%* & 3-10 PTS

NEED JOINT VENTURE PARTNERS?
WE CAN HELP.**
 
*Interest rates can exceed 20%. Rates are based on many deciding factors.

**In many cases.

 

With investors located around the world, we review and consider projects on a Global
basis. However, our first priority is within the United States and its territories.

The Equity Experts, a special finance consultancy is dedicated to helping
individuals, entrepreneurs and corporations to fund those Hard-To-Do-Loans.
With direct private money available for projects ranging from $50,000 up,
we will work with you to get your deals funded.

What kind of projects do we like?

  • Commercial Acquisitions
  • Residential Developments
  • Land Acquisition/Development
  • Commercial Development

 

Loan Scenario Submission

 

WHAT FUNDING PROGRAMS DO WE OFFER?

Unlike traditional lending, private mortgage/trust deed lending (also known as private equity, or “hard money” lending) is the process by which a private investor lends money against a piece of property and holds a mortgage or deed of trust lien against that property, much like a bank or mortgage lender.

In most cases, Borrower’s treat the transaction just exactly like that of a bank loan or conventional mortgage, but with a certain ease that is just not available through traditional lending sources.

OPTION #1: PRIVATE MORTGAGE/DEED OF TRUST LOAN

Borrower Pros:
• Credit ratings are often insignificant in lieu of strong real estate assets and a qualified borrower (based on assets, experience and historical performance).
• Funding can occur in days rather than months
• Interest only payments can be negotiated with some payments deferred to loan payoff
• Joint venture and/or straight loan programs can be negotiated
• Loans can be as short as 3 months and as long as 5 years (sometimes longer)
• Borrower’s enjoy the personal and consistent service of a professional loan management team rather than the cold distance of a payment coupon book.

Borrower Cons:
• Typical loans have larger transaction fees, higher interest rates and tougher default terms
• Borrower can default resulting in foreclosure of property more quickly
• Late fees, default fees and foreclosure fees are typically much more expensive
• Loan-To-Value ratio(s) are much more stringent than most conventional loans
• All closing, management and other related fees are the responsibility of the borrower
• Loan will typically require 6-12 months of guaranteed payments, no matter when refi’d

Typical Loan-to-Value ratios for Real Assets acting as Investment Security:
(Loan to value or LTV is the maximum amount we will loan against a property's verifiable value or purchase value, whichever is less.)

Commercial: 65%
RawLand: 50%
Construction: 65%
Development: 50-65%
Income-Producing Commercial: 70%

How it works:
After thorough due-diligence on a loan request and the borrower, we submit a summary of the loan and the borrower to our investors for acceptance. Once the investor(s) have committed to fund, our team then sets up an escrow through a third-party firm, completes all legal paperwork, helps with the final signing and then services the loan. Your monthly payment will be written directly to a collection account managed by a company who specializes in managing escrow and mortgage payments.

All fees are paid by the borrower for the life of the loan.

OPTION #2: SALE/LEASE-REPURCHASE PROGRAM

In our years of working with borrowers, we've discovered that there are unique times when for one reason or another, a borrower is able to afford the purchase of a property, but cannot obtain traditional financing. A divorce or the rapidly growing problem of identity theft can leave a person's credit score completely devastated - even if they've paid their bills and have a good job.

Although we do not do a lot of these transactions, we do offer them on occasion as an alternative to a high-interest private loan.

How it works:
An investor with a good credit score (680 or better) and verifiable assets can is willing to put up their personal credit rating for a return of cash.

Qualifying Details:

1. A borrower has the opportunity to purchase/refi a property with appraised value that is at least 20-25% higher than the asking price.

2. The investor purchases the property on behalf of the borrower, using the investor's credit and asset standing.

3. Borrower signs a lease-option purchase agreement to buy-back the property within a given amount of time.

4. The borrower enters a credit repair program to restore broken credit issues and prepare themselves for conventional property buy-back.

5. The borrower buys the property back from the investor within 1-5 years.

Borrower Pros:
• Credit ratings are insignificant
• Funding can occur in about 4 weeks rather than months - if at all.
• A low, prime interest rate is achieved rather than high-cost interest due to poor credit
• The Investor and Borrower sign an agreement that the property can not be sold by Investor to any other party unless Borrower is in default. Yet, Borrower can sell property at any time as long as contract details are met.
• Buy-Back can happen at any time after finalization of Investor purchase.
• Borrower’s enjoy the satisfaction of knowing they will have credit toward the purchase of the property when they can qualify for refinancing.

Borrower Cons:

• The Borrower pays the equivalence of 10% of purchase price as a transaction fee.
• Borrower makes a payment equal to (mortgage payment + amortized property taxes + amortized property insurance + mortgage protection insurance) plus 8% of the total of these monthly costs (or the combination of these costs plus $300, whichever is greater) to the Investor as a monthly “lease payment”.
• Late fees, default fees and foreclosure fees are much more expensive
• Borrower pays appreciation to Investor (at buy-out) equal to .0025% per month (3%yr)
• All closing, management and other related fees are the responsibility of the borrower
• Loan will typically require 6-12 months of guaranteed payments, no matter when refi’d
• Borrower will be responsible for extreme cancellation fees if in default of contract
• Borrower pays non-refundable, non-applicable costs involved in the transaction
• Borrower pays closing of Investor purchase and Borrower’s re-purchase of property

Let's look at how this figures in a real deal (12 & 24 month terms included):
This example is a single family residence on 10 acres. The buyers built the home and needed to pay of the construction loans but due to the subprime crisis, they were unable to find a traditional lender who would write their loan. Therefore they asked us to help them with a lease-buyback.

Appraised value of property: $360k
Purchase price of property: $340k
Loan amount applied for by investor: $340k

Because this was a second home, the investor had to put up 10% deposit in order to make the conventional mortgage lender happy ($34,000).

The deposit is refunded to the Investor by the Borrower upon close of escrow and receipt of funds.

This refund of the deposit made the balance of the loan $340k minus 10% ($34k) = $306k
Therefore all calculations are based on the $306k instead of the whole amount of $340k.

From proceeds of purchase, out of escrow, the Borrower pays the Investor a non refundable lease transaction fee of $15,000, and signs the lease-option/purchase contract.

From proceeds of purchase, and according to consultant contract with The Equity Experts, a fee of $15,000 is paid for negotiation and organization of the transaction.

The monthly payment to the investor is $3100.00 this includes loan payment, property taxes, hazard insurance and a monthly profit modifier equal to $300.00.

Upon buyback of the home (anticipated to be 12 months) the Borrower will pay an additional appreciation of 3% per annum for a buyback/sale value of the property.


EXAMPLE 1:
So to summarize the costs to the Borrower with a 12 month buy-back:

$15000.00 non-refundable, non-applicable Transaction fee
$15000.00 non-refundable, non-applicable Lease/Purchase Contract Fee
$ 3600.00 Total of -12- monthly payment modifyers to Investor
$ 9180.00 12 month appreciation modifier (3% per annum)
$15000.00 Approximate closing & purchase costs x 2
(Investor purchase * Borrower repurchase)
$57,7800 Total costs to Borrower for 12 month Transaction

Value of Home in Mo. 12: $378,000
($360k + avg. 5% appreciation over 12 mo. Period)

Buy-Back price: $322,680 (includes $7500 in closing costs)
{$306,000 + $9180 (1st year appreciation modifier) + $7500 costs}

Additional Fees/Costs: $ 50,280 (spread throughout term of contract)

Total Est. Cost of Contract: $372,960 (Buy Back price + Fees/Costs)


EXAMPLE 2:
Costs to the Borrower with a 24 month buy-back:

$15000.00 non-refundable, non-applicable Transaction fee
$15000.00 non-refundable, non-applicable Lease/Purchase Contract Fee
$ 7200.00 Total of -24- monthly payment modifyers to Investor
$18635.40 24 month appreciation modifier (3% per annum)
$15000.00 Approximate closing & purchase costs x 2
(Investor purchase * Borrower repurchase)
$70835.40 Total costs to Borrower for 24 month Transaction

Value of Home in Mo. 24: $396,900
($360k + avg. 5% appreciation over 24 mo. Period)

Buy-Back price: $332,135.40 (includes $7500 in closing costs)
{$306,000 + $ (2 year appreciation modifier) + $7500 costs}

Additional Fees/Costs: $ 63,335.40 (spread throughout term of contract)

Total Est. Cost of Contract: $395,470.80 (Buy Back price + Fees/Costs)


OPTION #3: JOINT VENTURE PROGRAM

Unlike our previous investment programs, the joint venture investment option is perhaps one of the most variable of options for a Borrower.

In the case of a JV transaction, the Investor funds a loan/financing request for a lesser interest return on principal plus an ownership stake in a real estate property/project.

Although the terms on such transactions will vary according to the details of each opportunity, we typically attempt to arrange the following terms :

This is an illustration only, and cannot be construed as an absolute model for every JV investment:
Project: Housing development (55+), 720 units
Project End Value (projected): $210,000,000
Projected End Value Net Profit: $ 60,000,000
Investment Requested: $ 10,000,000
Ownership Share for JV capital: 70%
Buildout schedule: 7-10 yrs.
Return: Year 1-4 : Repayment of principal investment + 10% interest
Add'l years: 70% of Net Return
Total Return:
$10,000,000 Principal, plus 10% interest on unpaid principal until paid back; plus
$32,000,000 Ownership share of Net profit
Avg. Annual ROI (based on 10 yr. Build out & 10% interest over 4 years) 36%

Pros:
• Higher cash involvement from investors
• Lower interest rates, often deferred to exit of principal payoff
• Management help/oversight by professionals
• More negotiable terms
• Credit/Refi support for future take-out loan(s)

Cons:
Only qualified borrower/partners considered to be an investment opportunity
• Market variability
• More cost related to funds borrowed
• Outside interference/cooperation with project

 
 
   

 


Got great credit & interested in a standard Loan?
Contact Us at our conventional funding site: www.indigomortgage.net

The Equity Experts, LLC
10753 Prospect Ave. NE, Ste. F
Albuquerque, NM 87112
505-892-7200 (office)
505-892-2594 (fax)
info@TheEquityExperts.com

Parent Company of: The Equity Experts, Indian Nation Investments,
Tula Capital, and Opine Holdings, LLC

Proud Members:
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PRIVACY POLICY

 


Not every investor is suitable to invest in first or second mortgages.*

Certain Net worth guidelines apply.

This site does not constitute an offer to purchase mortgage investments, it is meant as an educational resource only. An offer is made only through an Offering Summary, and only to those who have requested to receive such summaries. Investing in mortgage investments involves risk. Please be sure to do all necessary due diligence prior to investing.

Money invested through a mortgage broker is not guaranteed to earn any interest or return and is not insured. Prior to investing, investors must provide applicable disclosure documents.