Earn 10-15% in a Secured Investment!

Put your money to work in a high-yielding investment secured by real estate.

We professionally broker real estate finance transactions between real estate investors who want to purchase and rehabilitate a property, and private individuals who wants to earn a 10%-15% return on their cash investment. Investor Funding Resources facilitates an exchange of resources that profits all parties while creating jobs, improving neighborhoods, and eliminating toxic assets.

As the Private Money Lender, your investment is secured by a specific property that has been researched and inspected by our team here at Investor Funding Resources.

We use the same financial instruments used by conventional lenders to protect your investment (i.e., a Note and a Deed of Trust). The borrower is required to purchase title insurance for their property, and to name you as the beneficiary of their home owner’s insurance. Also, every transaction is accomplished through an escrow company (at the borrower’s expense).

To protect against devaluation of the property our loan amounts are limited to 60%-65% of the After Rehab Value (ARV), minus the estimated Rehab costs.

In some cases we combine a first loan at 60% ARV and second at 10% ARV for a Combined Loan to ARV of 75% - again, minus the estimated Rehab costs. If you choose to fund a loan in the second position you will earn as much as 15% return on your investment.

For more discussion about how maximum loan amounts are established visit the RE Investors page on this website.

If the borrower defaults, you will have the right to foreclose on the property and force a sale. This is extremely rare in our lending model - we do everything we can avoid it and we are proud to say that none of our lenders have ever had to force a sale through the foreclosure process. However, even if the property is foreclosed you would ultimately recoup your initial investment as well as the interest you are owed - as long the value of the property doesn’t fall below your loan amount. This is why we keep our loan amounts down to 60%-75% of the ARV. You could even end up with an asset worth far more than you “paid” for it!

But again, we do everything we can to avoid this scenario: Before we fund the loan we make our own assessment of the property’s ARV by reviewing comps on the MLS and Title company lists. We hire a licensed property inspector (again, at the borrower’s expense) to make sure there are no serious issues with the property. We confirm that the estimated Rehab costs are aligned with our general contractor’s professional opinion. We require the borrower to show Proof of Funds needed to cover the down-payment, closing costs, and rehab costs, as well as the carrying costs for six months.

We also require that the borrower contribute in cash at least 10% of the purchase price, with a minimum of $10,000 (many of the properties we finance are being purchased for less than $100,000). This assures that every party has “skin in the game".

Let's take an example. Recently we funded a property in a middle-income neighborhood in North Hollywood that needed about $20,000 in Rehab money.

1. We determined a conservative ARV of $310,000.
2. We took 60% of the ARV to arrive at $186,000.
3. We deducted the rehab cost of $20,000 to arrive at $166,000 as our Maximum Loan Amount.
4. The actual purchase price was $168,000 and we required the borrower to put down 10%, so the final loan amount was $151,200 ($168,000 minus the $16,800 down payment).

In this example the property is valued at $150,000 more than the loan amount (after only $20,000 in Rehab costs). That's 50% LTV after the Rehab is finished. Talk about a safe investment!

The loan was made at a 12% rate of interest, which means that our private money lender received payments of $1,512 each month.

Most of the properties we finance fit the profile below:

• Properties are mainly in Los Angeles or Orange County. Almost all are in Southern California.
• Property Type: Residential. 1-4 Units. Mostly single family homes in decent neighborhoods.
• All properties are non owner-occupied. We are very strict about this.
• Purchase price range: $100-$200
• Rehab cost range: $10-$30K
• After Rehab Value range: $250-350K. (ARV is also the Fair Market Value.)
• Layout or configuration is typically 2-3 bedrooms and 1-2 bathrooms with a standard lot size.

Private Money Inverstor Guidelines

We must be very selective when choosing our Private Money lenders. We need investors who are ready to wire funds when we need them. Most come to us by word of mouth or personal referrals, but we invite you you contact us if you are interested. We look for the following criteria:

• Investors with limited funds or income streams may be turned down.
• We prefer you didn’t borrow from your lines of credit to participate in these investments.
• We want you to have cash reserves in addition to your investment dollars.
• Money Investors must be willing to sign a letter of commitment to make funds available within 48 hours.

• Sam Sadat oversees the entire process. Sam has been in the industry for 23 years. He is a leading expert in real estate finance and has written a bestselling book on the mortgage industry as well as many articles. He has lectured around the country and made appearances on TV and radio.
• Extensions for the loan will be granted, if asked for, at your discretion only.
• All of our legal documents (deed, note, disclosures, etc.) have been created and or reviewed by expert real estate attorneys.
• Your money is still semi-liquid. In emergency situations, you could ask us to assign your note to another Private Investor. A 60 day written notice is required, explaining the nature of your emergency. If valid, we’ll do our best to assign your note which is subject to an assignment fee.
• Payments are made monthly to you directly or to an escrow account for disbursement.
• All legal documents and insurance requirements are handled by escrow and overseen by us.
• A recorded deed will be mailed to you for safekeeping as well as all other original documents such as note, disclosures, appraisal, etc.

If you would like to be considered as a Private Money Lender with Sadat Private Money Exchange Contact Us today, or fill out the short form below and we'll contact you.

We accept investment amounts from $30,000 up into the millions.