Explained: Private Money Lending Program (5/12)

Hey everyone, Danielyn here with Freedom Family Investments and in this video we're going to be talking about private money lending. But I encourage you to stay on to the end because some of my very favorite private money lenders are going to be here to share with you their stories, their experiences of investing with us over the years.

Hey everyone, Danni Lynn here with Freedom Family Investments and I'm going to talk to you today about private money lending. So as a private money lender, you are going to get an 8 to 10% rate of return. The length of time as a private money lender is going to be one year or less the amount of money earned. Let's just say it's 10% and you invested $100,000 and let's say that we actually use the funds for a full year. That means that you earned $10,000 in that one year time on $100,000 investment. The disbursement to you of this $10,000 and your capital back is going to be at closing. Do you need to be an accredited investor? The answer is no.

Many times we're asked the definition of an accredited investor or what is the difference between an accredited investor versus a soph investor. Because the SEC can change their guidelines at any given time. We are going to post a screenshot of the current guidelines as of the recording of this video. But we encourage you to go to the SEC's website and check the current guidelines as of the time you are watching this video. One quick tip is to make sure that you are looking for more than just the financial requirements. Being accredited means that you are open to many more investment opportunities and and one way to achieve accredited status is not the financial requirements, but it's simply to pass a test. So check for licensing, check for LLC requirements or any other additional guidelines that the SEC has provided.

But you do not have to be accredited for this particular investment. So none of that matters. Does this investment have compounding? No. What is it backed by? It is backed by a first lien on real estate. That means if we're buying 123 Main street and you're lending us $100,000, you're going to have a first lien position on 123 Main Street $400,000. That means the after repair value for that property is probably around 1301-401501-60170, somebody somewhere in that range. You'll get a funding packet that gives you all the financials of the property so you know what you're lending on. How Much the purchase price is how much the rehab is and how much the after repair value is, which is what we're going to sell it at after the renovation is done. So that's all the information and what your return will look like. So on this particular investment, private money lending, do you have cash flow? Well, you do have cash flow, but it's after a year. So I'm not going to say yes, I'm just going to say no to that. Diversification. You won't have diversification because you're lending on one property. Now, if you're a private money lender and you're lending on five properties, yes, you have diversification across five different properties. But I'm not going to mark that either, because let's just for this example, you only lended on one property or you were only lending on one property. Is it passive? Yes, it's absolutely passive. All you're going to have to do is review the funding packet that Tiffany sends you and let her know, yes, I'd like to lend on this. And then you don't have to do anything until it comes down to Tiffany creating a payoff statement to tell you the property is about to close, you're about to get your money back plus interest. You're going to review that and approve it, and you're going to sign a release of mortgage at the very end of the deal so that we can remove the lien from the property. So it is passive. Is there compounding? No. Is this liquid? For the sake of the liquidity discussion, anything less than a year, I'm going to say yes to liquidity because many investments will lock up your funds for a long period of time because many investors do not want to touch their funds. They just want it to continually to be earning interest and they want to leave it alone. So people who are looking for liquidity are typically looking for investments that will give their money back if they need it within one year or less. So. So in this case, yes, it's liquid. So private money lending return 8 to 10%, length of time one year or less. The money earned if it was $100,000 at 10% and we held it for a full year, is $10,000. You would get your money paid back at closing. Do you have to be accredited? You do not. Is there compounding? No, it's backed by a first lien position on that piece of real estate. And the benefits here are passive investment and liquidity. I hope that helps explain private money lending. If you have any other questions or you'd like more information about this, please go to chatwithfreedom.com you're going to scroll down, you're going to see a calendar for Ben and cj. Just reach out to them, get on their calendar and they will explain this in further detail. They'll answer any questions that you have and they will get you set up to become one of our private money lenders if you're interested. Thanks again and we'll talk to you soon.

Well, I hope you enjoyed the video. Now it's time to get real. We're going to share with you some stories from real investors who are going to share their experiences with you so that these examples can come to life. When you're looking at investment vehicles and.

Where you want to put your money, how are you deciding and why did you decide on private money lending?

I still work a full time job. I'm doing the, you know, the investing on the side. But at the same time this presented an opportunity for me to get involved with your organization at a lower level. You don't have to have, you know, exorbitant amounts of money to invest. And I knew anything that you guys were doing in my heart that it was a good thing for me to pursue. And I've completed four deals with you guys successfully and made a very nice return on my money. So I'm very happy to be part of that even on a smaller scale and hope to eventually build it up. But yeah, I again, it goes back to the trust factor and knowing you guys and seeing your success and I knew that if I had any questions or any answer or any issues that I could ask you and I would get honest answers.

When I learned how to do investments and stuff. And one thing pop out is like the bank never lose. Now that is the game, right? If you are the bank, then everything you, you are, you not necessarily own the money, money in and out through the bank, right? But you get control. So if something's not right, you still have the control. So you never lose the money. Bank is never losing the money. That is the, the game. So I think, well, if the private, I'm not, I'm not going to open a bank. But if I want to collect the interest by very passively not to use a hammer to fix the toilets, that kind of thing. The really, really good way is just to trust the company. They know what they are doing and they need the funding so we can become like a collaboration, right? They have the skill, they got a time, they got the manpower. Then I have the money sitting didn't create interest. So why not become kind of the bank? Right? I wear the head of the bank, give some funding to the company like the Freedom Real Estate to do their job. Then in the end they make money, I make money, then the tenant has a beautiful house to live in.

Yes.

And that's the whole picture for me. The, you know, become a private lender is really to create a money flow.

Yes.

And a flow that really easy way because everybody doing what they are doing, other than try to cross over and try to control everything.