Private Investors seeking to place at least $150,000.
Many people are unaware that an area of investment opportunities exist apart from the familiar world of stocks, bonds, annuities, CDs and other traditional investments where it is possible to experience consistent cash flow with targeted double-digit interest rates paid on a monthly or quarterly basis, offering investors the ability to participate in mortgage loans backed by real estate. Private mortgages have stable returns and fit well within a portfolio of stocks, bonds and real estate. Adding these to a portfolio will make the returns of the total portfolio more consistent.
What exactly are private mortgages? Why would I choose to invest in them?
A private mortgage is a secured debt obligation, which produces a regular, predictable income stream to the investor with all the security, protections and recourse that a mortgage lien can provide. While mortgages do not typically provide any capital appreciation, they do generate a steady stream of interest payments. Unlike stocks, the security is tangible bricks and mortar, where legal protections such as title insurance and many other unique rights and remedies ensure the enforceability of a mortgage lien.
What kind of returns do private mortgages produce? Is the interest rate fixed?
The typical minimum interest rate for a direct private mortgage is 10%, depending upon the time frame, the purpose, the loan-to-value ratio, the exit strategy and other factors.
The interest rate can be either fixed or floating, depending upon the way the transaction has been structured. Typically the floating rate mortgages always set the initial interest rate as the “floor” so that it can go up if, for example, the Prime rate rises, but cannot go down if the Prime rate drops.
Do private mortgage investments belong in my portfolio?
Not many investments can dependably generate such strong returns, and few other investments have an asset like real estate as a “backstop” providing a very well protected downside. Whether private mortgage investments are right for you will depend upon your time frame, your risk/reward expectations and your anticipated need for liquidity. Furthermore, private mortgages have stable returns and fit well within a portfolio of stocks, bonds and real estate. Adding these to a portfolio will make the returns of the total portfolio more consistent. When evaluating any potential investment, the advice of a professional investment advisor is helpful in assessing the role of private mortgages in an otherwise liquid investment portfolio.
Can I invest with my IRA?
Yes. There are many IRA custodians across the US that handle self-directed IRA’s and are familiar with this type of investment. You can utilize all forms of retirement plans including Keogh’s, Profit Sharing Plans, etc. We accept IRA and other tax-protected investments through third-party custodians.
Tax-deferred investors (IRA’s, Pension Plans, Keogh’s and the like) should speak with their financial advisor about any possible impact of UBTI (Unrelated Business Taxable Income).
A private mortgage is a secured debt obligation, which produces a regular, predictable income stream to the investor with all the security, protections and recourse that a mortgage lien can provide. While mortgages do not typically provide any capital appreciation, they do generate a steady stream of interest payments. Unlike stocks, the security is tangible bricks and mortar, where legal protections such as title insurance and many other unique rights and remedies ensure the enforceability of a mortgage lien. 
Not many investments can dependably generate such strong returns, and few other investments have an asset like real estate as a “backstop” providing a very well protected downside. Whether private mortgage investments are right for you will depend upon your time frame, your risk/reward expectations and your anticipated need for liquidity. Furthermore, private mortgages have stable returns and fit well within a portfolio of stocks, bonds and real estate. Adding these to a portfolio will make the returns of the total portfolio more consistent. When evaluating any potential investment, the advice of a professional investment advisor is helpful in assessing the role of private mortgages in an otherwise liquid investment portfolio.
