About Private Mortgage Notes
WHAT IS A PRIVATE MORTGAGE?
A private mortgage is money given by a private individual or private group to borrower(s) to purchase a property. In exchange, the private source’s money is secured by real property.
TWO WAYS TO INVEST IN PRIVATE MORTGAGES?
There are two methods of investing in private mortgages; Mortgage Pools and Direct Lending.
MORTGAGE POOLS?
Mortgage pools are like the mutual funds of private mortgages. Each investor’s money is gathered together with other investor’s money into one “pool” of money, and that pool is then used for private lending to a borrower(s).
Because a mortgage pool is pooling the money of all investors, the pool manager is able to reduce risk by diversifying over many different properties. The trade-off to mortgage pool investing is reduced returns. The mortgage pool manage draws their pay directly from pool profits. This substantially lowers profits and cuts deep into investor’s pockets. However, many investors have leaned toward the mortgage pool option over the direct lending option because it was easier and incurred less risk.
DIRECT LENDING?
Direct lending is when you lend money to a borrower, secured by real property they are looking to purchase and/or rehab. It is completely legitimate for any individual to offer a private mortgage to a borrower for a home purchase, giving the borrower a non-bank option for financing.
Direct lending is typically reserved for seasoned real estate professionalsmm7 due to the level of expertise that is needed to identify undervalued properties and go through the appropriate steps to protect the investment and assure a top return on investment. The direct lender typically has an appraisal done on the subject property, analyzes the value of the property and the upgrades/remodeling it will need, works the numbers to determine a break-even point, and then calculates what kind of offer on the property will be feasible to earn a good return on investment. Once that’s done, they qualify the buyer who wants to purchase the property and draw up paperwork that protects them against the possibility of the buyer defaulting on the mortgage.
Sounds like a lot of work, doesn’t it? As you can see, it does take a great deal of expertise to be a direct lender of private mortgages. Perhaps, all you want is a higher return on your money without all the “extra” stuff needed to get it. That’s where AryMing Assest Funding (AAF) comes in!
AryMing Asset Funding has made direct private mortgage lending a real possibility, even for the average and newbie investor. With our 14 years of rehabbing and selling properties experience, you don’t need any expertise in the real estate market to take advantage of the good returns and stability that private mortgages offer. We do all the ground work for you. All you need to do to take part in direct private lending is to invest the money.
PASSIVE V.S. ACTIVE REAL ESTATE INVESTING?
Some have turned to actively investing in real estate because of the high yields it can create but have found that, although it can be profitable, it often comes with a lot of downside. Being a landlord, investor, rehabber or wholesaler can be not only time-consuming, but also a money drain if not done properly. Most who venture into active real estate investing ultimately find that this type of investing is just another full-time job – something that business owners, professionals, individuals, or most retirees or near retirees are not looking for.
So if active investing in real estate is not the answer, is there a way to passively invest in the lucrative real estate market, protect the “corpus” of your estate, and get the tremendous growth in your portfolio?
The answer is yes, and AryMing Asset Funding will work for potential investor to leverage their money at double digit interest rate returns. We offer our investors high-yielding, passive investment vehicles backed by both real estate and the support and integrity of professionals dedicated to keeping investor money secure.
Private mortgage investing is not for everyone, and before any investor places money in a private lending vehicle, it is imperative that he or she has a complete understanding of what type of investment this is, whether this type of investment is appropriate for him or her, and whether AryMing Asset Funding is the best company to “hire” for the arrangement of this type of investing.