If you’ve been looking for a way to create wealth safely and yet obtain a better than average retur401K Interstate sign 61x150n and do it without having to spend hours, days or weeks researching real estate may be your answer.  Most people try and generate their retirement income to a large degree by letting other people make their decisions for them.  By the time they are ready to retire, or maybe need some or all of their money to cover for an emergency they discover they’ve barely kept up with inflation.  The cost of living has risen faster than their investment.

Show me one wealthy person that created his wealth by following conventional methods.  If you do things like everyone else you’ll achieve what everyone else has achieved, low returns and a retirement that isn’t what you had planned or expected.

Individuals who actively invest in real estate by buying, rehabbing, and selling (aka fix & flipping) or buying and holding for cash flow find that after a certain number of purchases they can’t get another loan due to banking restriction.  They also usually are not able to borrow on properties that require any kind of extensive repairs.  In addition to these challenges if the individual is self-employed the likelihood of the bank loaning him money is lessened exponentially.

As a result of these factors investors must find another source of funding and most are usually more than willing to pay well above market interest rates to be able to do so.  This is where the private lenders opportunity exists to make an above average return and grow his wealth in a must faster time frame.  And that opportunity becomes even greater if they utilize a self-directed IRA or 401K.  Active Real Estate investors are more than willing to pay well above the average market interest rates, for various lengths of time and with various payment options that can be tailored to not only suit their needs but more importantly your investment strategies.


Now I’m not an expert on self-directed accounts by any means but I do know it’s very possible to build your wealth not only tax free but it’s possible to build a legacy that will provide for your heirs for generations to come and do it in a manner that not only will you not pay taxes on your profits but neither will your heirs.

Let me suggest that you watch the video at the end of this paragraph and then contact Edwin Kelly, CEO of Horizon Trust, at 1-888-205-6036 or go to   to obtain more information.  Horizon Trust Company is a self-directed custodian who obtained their trust company license in July 2011, and is based in Albuquerque, NM.  Although they are based in Albuquerque their corporate headquarters are here in Las Vegas.  Because they are local you have the ability to go to their office, meet the people you’ll be doing business with, and probably get a much more in-depth explanation and understanding of the benefits of investing using a self-directed account, no matter what type of investments you may pursue.

When we are purchasing property we generally are making offers based on 70% of market value minus necessary repairs and holding cost as well as our borrowing expenses.  As a result private lenders looking for passive income can be reasonably safe in loaning us the money to make the purchase and at times the needed cash to handle the rehab costs.  The loan is secured by a property with a minimum of 30% equity after repairs are completed so worst case scenario the lender can take possession of the property and sell it at a discount and have an even bigger return on his investment than originally planned.

In our case we never borrow money prior to having a property under contract and we never borrow money from more than one lender so our lenders are provided with a signed and executed promissory note secured by a first position deed of trust.  All of our purchases are handled either by a title company or our real estate attorney.  Once we have our offer worked up and submitted to a seller we put together a complete package for our potential private lender.  This package provides all the details on the property, after repair value (ARV), our purchase price, our estimated repair cost, the time frame we expect to need to rehab the property and re-sell it, our holding costs, details on the comparable sales we used to determine the ARV along with photos of those sales, and the return the investor will realize when the loan is repaid.

mortgagenotes2 smallOnce our purchase offer is accepted our private lender deposits the loan amount with the Title Company (or attorney).  Prior to closing an appraisal will be provided if required, evidence of fire insurance will be provided with the lender named as loss payee, a title insurance policy will be issued by the Title Company, and once recorded the lender receives the original promissory note and deed of trust.

There are several ways that payments are made on these type of loans. First as far as collecting payments, this can be set up to be made direct to the lender or his IRA OR a third party may be used to relieve the lender from having to deal with collection at all.  If the loan is a short term such as what would be typical in a fix and flip scenario then it’s common for there to be no payments made during the term.  The principal and the accrued interest would be paid when the property was sold or the note was due and payable, whichever occurred first.  If the lender wanted payments to be made they would typically be interest only payments but again, these terms are discussed and agreed upon as the deal is being structured.  Longer term loans may have the payments set up fully amortized or the may be set up to be interest only, again, it’s mostly a matter of what the lender is wanting as they are the ones in control.

Please note that the above information is intended to be just that, information that you can use to make investment decisions with anyone and any kind of investment, not just real estate.  If you have an interest in learning more about us and how we conduct our business please feel free to contact us.

Leave a Reply

Your email address will not be published.