Frequently Asked Questions (FAQ)
The following are the FAQ pages from our *SPECIAL REPORT* which can be sent to you upon request. Our goal is to completely educate you on how our private lending program works, so you are comfortable and confident when choosing to invest with SEL-Dixie Capital Investment Group.
1) Who Borrows Money At 12% interest?
We do, and because we do, we have learned that…
The availability of money is worth more than the cost of money.
We make it possible to acquire houses at amazingly low prices because we pay cash with funds available from private mortgage lenders; funds that are not available from banks. In the past few years, banks have tightened up dramatically… ironically, right after the “bailouts” that were intended to boost the economy and help average Americans. Now banks will typically only loan on the purchase price of a house rather than the value of the house after it is repaired. The result is thousands of vacant houses across the country, sitting empty. This is why Real Estate Investors, like us, have no shortage of inventory and it’s the right time to invest.
2) What Kind of Loans Are Private Mortgage Loans?
Let’s clarify what kind of loan a private mortgage loan is. It is a loan that you make to a Real Estate Investor and, in turn, your loan is secured by the actual property that the Real Estate Investor purchases. We do not borrow with high loan-to-value loans, like the banks used make before the banking collapse. We deal with very low loan-to-value (LTV) loans; no higher than 70% of the “after repair value” of the property the loan has secured. This gives you additional security. This means if a house appraises for $100,000, we will not borrow more than $70,000 (which includes purchase price and all repair costs).
This way, you, as a lender, will never lend more than 70% of the property’s “loan to value” to us. Having that 30% of “equity” means you’re making a secured loan. You should never make a loan without at least 20-30% equity. We don’t violate this rule, so you come out a winner.
3) Do I need a lot of money?
We are willing to borrow with loans as small as $25,000 and as high as $600,000. The amount of the loan is determined by the value of the investment house attached to the loan, and the amount of repairs needed. Most of the properties we are purchasing are single family homes, valued anywhere from $100,000 to $400,000. Smaller loan amounts, i.e. loans less than $100,000, maybe combined with greater funds, and the lesser amount may be a “second position” lien mortgage. The details of each loan will be explained to you at the time of lending.
4) Who handles all of the details?
We do. It’s our job to get you proper documentation and protect your interest. All of this costs you nothing. We pay all closing costs. If you make a $25,000 loan, you send a check for $25,000 to the title company, and you get a secure mortgage for $25,000 (with you being the mortgager).
5) How do I get paid?
We will set up your account. Just sit back and you will receive a large check from the title company for 12% simple interest along with your principal loan amount when we sell the property. The simple interest amount due to you is based on the number of days your money was loaned out.
6) Is this a long-term loan?
We borrow money to buy and fix properties and then we eventually sell the property. You start earning interest from the day we purchase the property and then your principle and accrued interest is paid to you when we sell the property. So the terms vary. But our business is to buy and sell property and typically we will get your money out working again within 6 months or less.
7) Is this a mortgage pool?
No! You make the whole loan yourself. You get a lien against the property. You are the bank.
8) Is my loan really as secured as it sounds?
Remember that making loans is a business and should be treated like a business. That is why we have created a separate document called a Disclosure Statement to let you know exactly how the company operates, the risks and exactly how your money is secured.
We follow these common sense guidelines that we’ve talked about and if you set up a simple system and let the professionals implement the system, your loan portfolio can be hassle-free and produce staggering yields. Also remember, all costs are to be paid by the borrower…not you!
9) How do I use my IRAs or pension plan?
Making real estate loans is a widely accepted use for IRAs and Pension Plans. Think of it, now you cannot only loan out money that has been unavailable for you to use, but you can make it grow rapidly…Tax Deferred!
Since Uncle Sam isn’t taking a bite out of your profits until you draw out the money, more money is left in the account to compound and grow. The results are staggering…your money will grow two, three, or even ten times faster than your current investments and you maintain control.
In order for you to use retirement accounts for loans, they must first be administered by an “IRA Custodian”. The custodian is set up and approved to administer your loan activities. This means you will probably have to transfer your plan to one of the custodian’s, unless of course, your present administrator is set up to do that.
We can help you find an IRA custodian that is right for you, then simply send the transfer form to them and they’ll do all of the work for you. Once you’ve done that…
You’re Ready to Make Loans!
When we’ve selected a property, you notify your IRA custodian where to send the check for the gross amount of the loan and you’re in business.
There should be no cost to you except your plan administering costs. Some custodians will even collect monthly payments for you and deposit them into your account.
If you have any questions regarding your plan or its administration, contact your Plan Administrator. If you need help transferring your IRA, just give us a call. We’ve located the best in the country, so you can get going immediately.
10) Perhaps the toughest question of all,
What are my options if SEL-Dixie Capital Investment Group Does not pay me as agreed in the mortgage, am I going to get stuck with the house?
First and foremost, please be aware that our business and personal reputations are on the line with every deal we do; if we did not do business the right way, we’d be out of business.
Secondly, remember that you will be holding a first position lien mortgage on the subject property being used as collateral for your loan. As explained earlier, we will not borrow more than 70% of the after repair value of the property. So, if we walked away from the property, or do not do what we agreed to do, you can simply foreclose on the property to recoup your funds
Foreclosure isn’t the evil, time-consuming, costly legal process that most people think it is. It’s as simple as sending your note to an attorney and saying, “Do It.” All you have to do then is sit back and wait. Nine times out of ten, before foreclosure is complete, someone will be calling your attorney’s office with a payoff letter and your loan will get paid off. When this happens, you will collect all accrued interest, your principal balance, all attorneys’ fees, court costs, and all other expenses you have incurred in connection with your loan.
If you wind up with the house, that doesn’t mean you have to keep it. It can be sold immediately at a fair sale price and still produce a profit over and above your already superior yield earned on your loan.
SEL-Dixie Capital Investment Group, LLC, like any other business, is in business to make money. Your assurance that we will deliver as promised, should be based on the understanding that since we can only receive OUR paycheck when the house is sold... the house WILL be sold!
Now we’re doing a lot of talking about default here, and maybe more information than was necessary, but we just wanted to make sure you had all the facts and your questions are answered. We pride ourselves on our reputations and we have never defaulted on a payment to a Private Lender.
11) What kind of documents will I receive?
Your closing package will contain the following:
1) An original Promissory Note.
2) A copy of the mortgage. The original will be recorded and then sent to you.
3) A copy of the title insurance policy.
4) A copy of a hazard insurance policy naming you as payee in the event of a loss.
5) A copy of the After Repair Value appraisal.
6) A copy of a UCC-1 filing form, which puts te State of Florida on notice that the subject property is being used as security for a mortgage loan.
In Summary,
Well, we’ve covered a lot in this Special Report, and we hope we’ve enlightened you on the awesome power of making private mortgage loans. If it appeals to you, you can get started right away. While most people are complaining about low paying investments, you could be receiving a return of 12% all of the time…
Are you now ready to take action?
So, what’s it going to be? Are you going to continue to let other people control your money so you only get a return that barely keeps up with inflation? Or, are you going to take control and make sure that when you get ready to retire, you can do what you want without worrying about money and if you are retired, squeeze every interest dollar out that you can.
Private lending is an incredible way to build wealth in a hurry that most people aren’t aware exists. You’re not one of those people who are uninformed anymore. If you have more questions, give us a call. Perhaps we can get together for lunch or just chat on the phone.
John Sholtes (727) 735-9292
Anthony Marottoli (727) 624-9480
