After multiple years of consistent results, several people have asked us how they can become a part of what we do.
With the volatility of the stock market and the risk of alternative investments, investing in real estate is essentially one of the smartest and safest strategies to promote wealth building. Having a proper foundation and with adequate knowledge, investing in real estate can be highly lucrative for anyone. However, if you lack experience and want to put idle, or low performing money to work, it could be worthwhile talking to us about becoming a “private money lender”.
This process offers the same type of underlying security and profit potential as renovating or building, but without actively being involved.
Private money lending is when individuals lend their capital to other investors to utilize for investment purposes. The lender is then paid an interest return on their investment, with terms pre-determined.
Leaving your hard-earned money in a savings account is not the appropriate way to save or grow your assets. Private money lending helps secure a loan in real estate that is much more in worth than any other loan. We never leverage more than 70% of the after-repair value.
The private lender is secured by a promissory note and in our case a collateral assignment too. This provides an extra layer of protection for our lenders.
Private money lending is ideal for those that have idle money or a surplus of cash in a savings account, receiving little to no return. For those that have a sizeable IRA, 401K, or a private pension this is a great option to allow it to continuously grow. This type of investment is also perfect for those that want to participate in the real estate market, have the security of a real estate asset, but would like to be passive and just collect the income.
Steps of becoming a Private lender:
Contact us for an initial consultation
Conduct your due diligence
Finalize loan amounts and finish paperwork
Send money and begin collecting
This is not a solicitation or offer of securities.
What Is Private Money Lending?
Frequently Asked Questions
Is there a minimum amount I can lend?
Currently, we have set a minimum of $10,000.
What lengths are the terms?
At the moment, we have options for 12 and 24 months. Anything outside of this will be customized or on a case by case basis.
When is the loan interest paid?
Lenders have various strategies for investing. It is either to earn a regular income or to build wealth for their future. To try and accommodate this we created a few options. Interest on the loan can be paid out Quarterly, Bi-annually, or at the end of the term.
What is a promissory note?
A promissory note is a document that is legally binding. It is a promise to pay a particular amount to the bearer at a specified date or a given time.
What is a collateral assignment?
A collateral assignment is where the ownership rights of an asset are transferred to a lender from a borrower. In this case, it gives a charge over all the company's assets and bank accounts to the lender, if Raw Developments does not meet its obligations to that particular lender.
Where are the properties located?
We have seen a lot of success in the Florida market that we currently focus on. The majority of what we do is in the Tampa Bay, St Petersburg, and surrounding suburbs. For the right projects we work outside of these areas and on several occasions, have purchased in Orlando and Sarasota.
What type of properties do you invest in?
Our focus is on single-family homes and luxury condos.
Can I visit the properties?
If a lender would like to visit us and see any of our projects, they are always welcome to do so at their own cost, and with advance notice so we can be prepared for a tour.
Do we receive updates?
Although this is a passive investment, we want you to be at ease while we are working hard in the background. If a lender ever wants an update, they can visit the website. That is where we continually update our gallery with new properties as they are completed and our blog too. We are available to answer all your queries at any time also.
Can I keep my funds at the end of the agreed term?
Yes. New documents will be issued accordingly.
What are the tax implications?
Unfortunately, we are not in a position to provide tax advice, and strongly recommend that you discuss any tax matters with a tax planner, or accountant, ahead of time.
Are there any penalties if I request to end the loan early?
Our goal is to always have the funds working hard, which means they will be tied into assets and cannot be easily liquidated. If a lender would like to terminate early, a written copy of their request should be presented. Whilst we cannot guarantee an early payoff, we will be review case by case to see if there is anything that can be done to accommodate the request.
Are there any upfront fees or points?
No upfront fees or points. The lender receives interest on the full amount of the loan.
Will my loan be used for 1 specific property or spread over several?
At any one time, the funds could be across multiple projects in the portfolio.
Should I be worried about a changing market?
We never leverage a property of more than 70% of the ARV. This puts us in a strong position to adjust accordingly. In advance to this, we are always monitoring the market with our team of experts, and ready to alter our criteria accordingly to minimize risk.