Since 1990 Smokerise Management Company has purchased, rented, sold and lease optioned homes in Coweta County. To finance the purchase of these properties, we have often borrowed money from local banks or from national mortgage banks. We have great banking relationships with four local banks that would allow us to get all the money we would need. Bank loans are expensive, however.  They have up-front fees and high interest rates.  We have found that it is better to deal with investors like you.  You get a higher rate than the bank is willing to offer you for your savings and we get a lower rate than the bank is willing to offer us on our loans.  It is a good deal for both of us! Most of our properties are renovated and held for rental.  Some of our properties, however, are leased with an option to purchase (lease option).  In either case we plan to hold the homes for three to five years then sell the properties.
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You can receive a 6% return on first mortgage loans that are used to purchase or refinance rental properties here in Coweta County. To keep things simple, these loans are interest only and interest is paid monthly. Generally these loans have a duration of five years, but we do have some flexibility in the term of the loan.  All transactions are closed by a local real estate attorney with the proper documentation and a recorded security deed.

In order to receive returns higher than 6%, loans are structured so that the lender receives 5% interest-only loan payments monthly then receives part of the equity when the property is sold.  These loans are set up so that if the property sells in five years for the same price as it sold for in 2008, the lender will earn about 7.5% on their money.  If the property sells for more or sells sooner, then the return is higher.

Why would you want to participate in a loan of this type?  Basically, you are guaranteed at least a 5% return with the chance to earn much higher if the property appreciates over the next five years.  The upside is not limited.  It is like being a partner in the ownership of the property without any of the risks or work.  These loans would be at 70% loan to value, meaning you would be loaning only 70% of the value of the property.

Why would we give away potential equity?  The owners of the property plan to sell all of these properties when the market for sales improves, which should be within five years.  This type of loan gives the owners a better cash flow now, replacing 7% -7 1/4% loans with 5% loans.  In order to receive a better cash flow now, the owners are willing to give away some equity later.

This type of loan is a good deal for both the lender and the borrower.

In addition, either type of loan can be done with personal savings or retirement funds.

ARE PRIVATE LOANS A SAFE INVESTMENT?

 In our opinion, it’s definitely a lot safer than the stock market. With stocks you are betting on companies you know little about. It is a volatile market that no one can control. You could do very well one year and take  losses the next. Every day you wonder whether you are gaining or losing, and the only choice you really have is whether to buy or sell. No matter how savvy you are, you don’t get to make the rules. Your investment is at the mercy of ever-changing circumstances.

With loans secured by real estate, your minimum return is fixed. While market investors are worried about their investment, you can relax knowing that your investment is secure. You are loaning money to local people who have a great credit history who you can meet and talk with. Your loan is secured by local real estate you can ride by and walk thru while it is being renovated. Terms, rates and conditions are fixed and easy to understand with this type of investment.

Call and talk to us!  If your needs differ from what has been discussed here, let's discuss them and see if we can work out a good arrangement for both of us.


References Upon Request

To Contact Us Call Tom Carson at 770-683-4807 

If you have retirement funds that you might like to invest but you wonder how it would work, continue reading below for a detailed discussion.

 
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