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Why Invest in Real Estate?

February 7, 2017

Yep The Fallout From The Recession Left Some Investors Less Likely To Look To The Real Estate Sector As An Option For Wealth Growth.  However, We Have Witnessed A Radical Change In The Economy And As A Result, Real Estate Has Once Again Regained Its Rightful Place As A Solid Investment In Today’s Financial World.

The fallout from the recession left some investors less likely to look to the real estate sector as an option for wealth growth.  However, we have witnessed a radical change in the economy and as a result, real estate has once again regained its rightful place as a solid investment in today’s financial world.

Unlike stocks and bonds, real estate is founded on brick and mortar.  A major advantage of real estate investments is the significant portion of return, which accrues either from rental income or appreciation over the long term.

Additionally, investing in real estate has a lower risk factor than other major asset classes.  This allows the investor to lower his/her portfolio volatility.  Financial consultants always advise diversification for their clients.

We have seen that as the economy has grown, the demand for real estate has driven the rents higher and higher, allowing for unprecedented growth in individual capital.

Of course, one of the major drawbacks of real estate investing is the lack of liquidity.  While you might be able to cash in stock overnight for immediate funds,  a real estate transaction can take months even with a competent agent.   Overall, as long as you have built flexibility into your portfolio,  you can be comfortable with some portion of it being illiquid, but producing capital appreciation.

For the past 29 years Sun Pacific Mortgage and Real Estate has provided many investors with the opportunity to invest in Notes.  We regularly have trust deeds available, for property investments throughout California.

If interested in earning 9-12% return, we look forward to working with you.   Please call 707-523-2099 for information on becoming an investor through us.

Is A Private Money Loan Considered Cash?

November 15, 2016

 

Sold-Cash-Key

A private money loan is basically considered a cash sale by the Seller, making the possibilities of closing the deal more certain.  The offer is still considered a loan, but it comes with several benefits that both parties will appreciate:

1. No loan contingencies, since the borrower and property have been fully vetted before you write the offer.

2. No appraisal contingencies.  Although the borrower can order one, the offer is not dependent on the outcome, since most private money loans require a sizable down payment.

3. Quick closing.  Private money loans have been known to close in a much shorter period of time than traditional lenders and banks.  It is reasonable to close in 10-15 days as opposed to a month or longer.

4. Property condition is not as great a concern.  Less than pristine properties are easier to purchase with private money since this type of loan is considered “all cash” and is based against equity or loan to value.

Private money, also known as hard money loans, can be a viable option in the real estate financial world and are of considerable interest to Borrowers, Sellers and Investors today.

If you or someone you know is interested in getting such a loan or have further questions, call me at 707-523-2099 and I’d be happy to help!

The Latest Trend for Pension Funds: Private Equity Investment

November 8, 2016

Recently it has become increasingly clear that private equity is an attractive option for pension funds. Because the ultimate question in any investment decision, big or small, is the return on money, Investors are turning to private equity funds to bolster their portfolios.

The More Time, The More Money.

After the lean years that followed the 2008-2009 financial crises, the performance of private equity funds has started to outpace the market.  Contributing to the interest in this type of investment is the volatility of other public and private markets.  Private equity is not subject to the same daily volatility of other investment options, such as the stock market, from emotional reactions and headlines.

When you consider the investment goals of the typical pension fund investor, long-term capital appreciation is at the top of the list.  You won’t find the fluctuations of the bond and equity markets in private investments, making this option a far better place to entrust your funds.  The private equity industry has matured and become more diverse in recent years making it a viable option for Investors looking to grow their finances.

My family owned and operated Hard Money Company has been in business since 1988.  If you have any interest in investing in California trust deeds, then call our office at 707-523-2099 as we regularly have these available.

 

Fractionalized Loan Investing

August 11, 2016

Fractionalized

Funding Large Loans…

I wanted to report nothing but good news here at Sun Pacific Mortgage. Last month was another record production month. We are funding an ever increasing number of loans and larger and larger loans.

To get some of the larger loans done we have had to “fractionalize” the loan. This is the formal term we use that describes having more than one investor contribute funds to get the loan done. As an example: $750,000 loan amount and 2 investors each invest $350,000. Another example: Same loan amount of $750,000, but Investor 1 funds $300,000, Investor 2 funds $200,000, Investor 3 funds $200,000 and the final Investor funds $50,000. This is a very common investment tool.

Here are some of the pros and cons of “fractionalization” from the Investors viewpoint.

Pros first: These are just a few of the reasons to do a “fractionalized” loan. 

  1. This allows you to have a share in a very good loan spreading the risk to a number of investors.
  2. It allows you to get your money out there rather than waiting for a loan that fits your available funds.
  3. You don’t have to have all your eggs in one basket. Rather than doing just 1 loan you spread your investment dollars around on a number of smaller investments.

Cons:

  1. All investors need to agree on a course of action if the loan gets into trouble. This is only real con I could come up with. I must point out that this has not been an issue in the past 5 or 6 years as we have not had a residential foreclosure in that time, that I am aware of. The decision that matters is to foreclose or not foreclose. It’s usually pretty obvious.

Fractionalization can be an amount from $100,000 to $1,000,000. Hopefully this description of “fractionalization” can expand the opportunities for you as the Investor.

Owner Occupied Principal Residence – Part 2 of 2

June 28, 2016

Pic1 This is Part 2 of Owner Occupied Loans. In this writing I will feature several of the legal aspects of this all-important Program.
If you missed reading Part 1, click here!

The purpose of this article is to encourage investors to continue to make these loans, in spite of the rumors that exist surrounding them.

I will start off this article the same as the beginning of Part 1, by saying that I will always offer loans to homeowners that are owner occupants. It is an important segment of lending and a heck of a niche for my office. I will say that the feds have brought about a lot of regulatory protections for this class of Borrower, but that is simply because they have determined home ownership to be such an important right and should be protected. It’s kind of like car seats for kids, seat belts, speed limits, food labels, movie ratings, warning labels on medications, etc., etc.

I will also tell you that there has not been a foreclosure of an owner occupied loan originated by my office (that I am aware of) in the last 6 years. This is key.

There are really just 2 quasi-objectionable regulations that apply to owner occupied transactions.

  1. The loans can be rescinded for up to several years if the correct disclosures were not made at the beginning of the loan. Rescinding a loan means that the Borrower gives back the principal and the investor (and the Broker) give back the interest and the fees. I asked our attorney about the incidence of this and he had no answer. I have never heard of it happening. I have also done tons of research on line on the subject and cannot find case law that applies. That is proof that, while there is lots of regulation, the occurrence of legal problems with these loans must be minimal as I cannot find anything on the subject.

  2. These loans take longer to foreclose upon. As these loans are required to be serviced, this is a servicing question. The regulation requires you wait 120 days to begin the foreclosure process. Then it’s just the regular foreclosure timing. From my experience, most investors would wait this long at least. Add to that the fact that we have not had a residential foreclosure (that I am aware of) in the last 6 years and it really is much ado about nothing.

Pic 2
So, statistically, owner occupied loans don’t get foreclosed upon in any significant number (zero in my office), Borrowers do not rescind the loans in any significant numbers (I cannot find any mention of it on line), the loan to values are good, they have an ability to repay the loan, they have an exit strategy, they pay the property taxes and insurance monthly, they do a consumer credit counseling class and the properties will likely appreciate in the coming months and years.

So if you hear mention of avoiding these loans, show whomever has said it these articles. These loans are important and a very good investment.

Owner Occupied Principal Residence – Part 1 of 2

June 8, 2016

Oo 1  This Will Be The First In A Series Of Articles That Will Explore The Varied Types Of Loans We Offer Investors. This will be the first in a series of articles that will explore the varied types of loans we offer Investors.

Let me start off by saying that I will always do loans to homeowners that are owner occupants. It is an important segment of lending and a heck of a niche for my office. It also has the most regulation by the state and feds who, in their infinite wisdom, have decided that this category of homeowner needs protection. Lots and lots of protection.

I will also tell you that there has not been a foreclosure of an owner occupied loan (that I am aware of) for the last 6 years. This is key.

These are generally very good loans. Most are just shy of getting 30 year fixed rate loans at or under 4% from what we call “A” paper lenders like Wells Fargo, Chase or B of A. Most are turned down due to something in their credit. Second most are turned down due to income. Problem property is the third reason. All the turned down loans that we write have down payments of between 20% and 60%.

Many mortgage brokers have backed off of this type of loan. My guess is they have been run off by the profusion and confusion of regulations. The tragedy is, they have run a lot of investors off of this type of loan. And really, it’s not that tough to know the regulations and comply. Yeah, there has been a lot of regulation, but my viewpoint is that you get your wits around all of it and simply comply with the fed and state mandates and you do these loans. So that’s what I do and that’s why I promote this type of loan.

Almost all of the owner occupied loans that we write have an “exit strategy”. We never used that term before the proliferation of fed and state regulations in response to the recession, but here it is. We write these loans as 15 years loans but I would wager none will go to that term. I looked at the statistics of the owner occupied loans we have written that are serviced and the ones that had paid off lasted an average of 11 months. So we make 15 year loans but they most likely will not last that long. And if they do, hallelujah!

Champagne-Cork

One thing I must mention that I think increases the security of those loans, is the fact that the feds require they be impounded for the payment of property taxes and insurance. The feds did get that one right. You know every month that those items are paid and not accumulating.

The feds also require that the Borrower on an owner occupied loan demonstrates an “ability to repay” the loan. We don’t even write the loans if they cannot prove they can repay the loan. We turn down quite a few requests, even with a ton of equity, because they cannot prove their income.

Last item to mention is that the feds mandate these Borrowers do a consumer credit counseling class before the loan records. The counselor takes the disclosures for the loan and does a budget talk with the borrower. It’s done over the phone and takes about 45 minutes to an hour. This theoretically makes for a more informed Borrower. Makes sense to me.

Informed-Borrower

So, statistically, owner occupied loans don’t get foreclosed upon, the loan to values are good, they have an ability to repay the loan, they have an exit strategy, they pay the property taxes and insurance monthly, they do a consumer credit counseling class and the properties will likely appreciate in the coming months and years.

That’s why these loans are a great investment.

To continue reading on to Part 2, click here!

Hard Money Investing Is Ripe In California – Especially With Us!

March 21, 2016

What a great time to be a Private Investor in real estate. Hard money loan borrowers have only been increasing since 2012, as it is the only game in town after their favorite Bank or Conventional Lender tell the Borrower “no”.

Money-Guy-Walking-With-Bag-Of-MoneyProperty values are just continuing to rise. Becoming a Private Investor can earn you upwards of 13% in return by investing in mortgages. And by investing in real estate mortgages your investment is secured.

A Private Investor is also known as:
Private Mortgage Lender
Hard Money Investor
Hard Money Lender

These are all private individuals lending their money directly to the borrower with a promissory note with interest rates, points and prepayment penalties the investor sets, and securing that promissory note with a real estate mortgage.

Our family owned and operated Sonoma county company, Sun Pacific Mortgage & Real Estate, has been working with Private Investors since 1988 and we have become known for our integrity and honesty, throughout all of California.

We promote purchase loans as well as refinance loans and these can be at any Loan To Value up to 75%. With this down payment and equity in the property, the homeowner or real estate investor, is not likely to walk away from the property.  Many individuals have started or are continuing as a Private Mortgager Investor as they can secure a consistent monthly income from it.  It can be an excellent cash flow for someone retired or looking to set up their retirement funds.

A loan done through our office for a Sonoma County Home Buyer came to $196,000 with a rate of 12% and the Investor now gets a monthly return of $1,960.  This Homeowner is very happy and intends to refinance down the line for lower rate but gets the home they’ve been searching for!

Realtors, Brokers and Borrowers, for those who have a bankruptcy, short sale or foreclosure, have poor credit or difficult-to-prove income due to being self employed but have a decent down payment or existing equity, have come to know that they can most likely get a loan from us, despite being turned down elsewhere. We regularly have new and available trust deed offerings requiring funding.

Hard Money Investing in California is ripe. Time to jump on the bandwagon with Sun Pacific Mortgage & Real Estate and get a good taste!

If you are interested in investing with us then Call Our Office at (707) 523-2099.

Sun Pacific Investor Quarterly – March 2016

March 11, 2016

California Mortgage Association Conference

Our office is a member of the CMA. It is the leading association for Hard Money Brokers.

We just returned from the 2016 CMA Winter Conference. Attendees included Hard Money lenders, lawyers, servicers, insurers and Hard Money lobbyists.

The purpose of the Conference is to keep Members abreast of the constantly evolving lending rules and regulations. This allows us, and you – as the Lender – to operate safely within the law.

We make it a point to attend all 4 Conferences offered per year.

I suggest you make sure any Broker you do your loans with is doing something other than the required continuing education to protect you as the Lender in Hard Money loans.

ITEMS of NOTE…

The Conference covered many relevant topics. Two items that have really come to the fore in our operation are 1. Servicing of loans and 2. Qualification of Investors.

Servicing Loans: Lynn and I have never serviced loans in our office and likely never will. For many Hard Money lenders it is a big profit center. It was just never our bag. We did though, provide certain elements of servicing as a customer service to our Investors. We’d make phone calls to late payers, write dunning letters if need be and really just gave service after the sale.

It has come to the point now though, that our counsel to Investors is to definitely have the loan serviced. Especially with the volume of Dodd/Frank regulations, many of which apply to what you as the Lender must comply with in administering that loan after close of escrow.

The suggestion is a little self serving too, as it would take the burden of that follow up out of our hands and place it in the hands of a qualified and licensed Servicing company. Because, to be honest, it is time consuming considering the volume of loans we now do in my office and the number of Investors we have on the books.

It is peace of mind for $20 per loan, per investor. That is what is charged by Superior Loan Servicing, to whom we refer to the most. They are on top of the laws that apply to handling Borrowers on loans during the term of the loan and its ultimate reconveyance. You can also check with Redwood Trust Deed Services, Inc.

If you have questions regarding servicing, you can call me for further information or better yet, go to www.superiorloanservicing.com and /or www.redwoodtrustdeedservices.com.

Ask us to set up your next loan for servicing.

Qualification of Investors: In the past, if you had some money and said yes to a Trust Deed Offering, we put you into that loan as the Lender. As of January 1, 2013, the BRE mandated we qualify Investors. They came up with BRE Investor Questionnaire Form 870.

As the Broker, I must have that current form in your file in order for you to be the Lender on a Hard Money loan. I have to make a judgment call, based on that Form 870, as to your ability to be an Investor. It must be renewed every 12 months to determine your further ability to qualify as an Investor in Trust Deeds.

I mention it, because we have instituted a policy of follow up on this Form 870 in our office. It is a necessary evil for you as the Lender. So if Team or Team calls to get this form updated, it’s the law!

Become A Real Estate Investor

March 3, 2016

Hello to all Current, New and Potential Private Investors;

Real-Estate-Investors (1)Becoming a Private Investor can earn 8% to 13% in return!

By investing in real estate mortgages your investment is secured. Investing in mortgages isn’t only buying or selling of mortgages at a discount. It includes directly lending your [hard] money to individuals and securing that loan with a mortgage against their real estate.

 

California Borrowers who have poor credit, want to buy a dump property to fix up or difficult-to-prove income due to being self employed get turned down elsewhere.  But, if they have a decent down payment or existing equity, they know that they can most likely get a loan from us, and this is where you would come in.  We send out regular Trust Deed Offerings throughout the week for primarily 1st mortgage, some 2nd mortgages, on purchases and refinances and bridge loans for investment properties, owner occupied or principal residence properties and sometimes land and commercial properties.  We then work with those private investors who want such trust deeds.

We have the experience and sincere desire to help, so can make it easier by walking you through your trust deed investments. There are exact regulations to be an investor but it is easier than you would think.

As the Broker of Sun Pacific Mortgage and Real Estate, I have worked with hundreds of individuals since 1988, who were interested in investing in California real estate, for regular monthly, monetary returns.  The majority are still with us today, as we have become known for our integrity and honesty.

 

We are looking for more Investors. If you or anyone you know is interested in real estate investing, please send us a message through our website, below, or, call us at (707) 523-2099. 

 

Do you want to know more?  Click here to learn more about private investing:  https://www.sunpacificmortgage.com//tips-to-become-a-real-estate-investor/

 

Recently Funded – Here To Help In 2016!

January 7, 2016

Here’s to you kicking off a fantastic new year in real estate by taking advantage of our alternative financing for you or your clients!

Guys

2015 marked another great year of Hard Money Loans from The Guys in the White Hats. January 2016 is our family company’s 28th year anniversary, serving all of California with our alternative finance programs!

This past year was very busy with many home buyers, home owners, Realtors and investors helped by our alternative financing programs, also known as hard money.

We recently expanded our family ranks and programs we offer, to be able to help even more people in this new year. (You can see our updated rate sheet below.)

We hope the following recently funded transactions through our office, give you a better idea as to how we can help you and/or your clients this year!

Best,
Broker & Broker, The Guys in the White Hats

P.S. We love referrals!

Recently Funded Transactions:

We finance Bridge and short term loans, Owner Occupied purchases and refinances, non-owner purchases for single and multiple units, commercial and some land. Get our financing despite credit score, self employed-difficult to prove income, need fast financing, property a fixer, etc!

Petaluma, CA
Loan Type: Owner Occupied Purchase
Amount: $420,000
Days to fund: 24 days
Reason needed: Credit score below 580

Apple Valley, CA
Loan Type: Owner Occupied Refinance
Amount: $341,600
Days to fund: 19 days
Reason needed: Self Employed with difficult to prove income

Santa Rosa, CA
Loan Type: Refinance of Non-Owner 2nd to handle a balloon payment
Amount: $377,000
Days to fund: 38 days
Reason needed: Had bankruptcy a couple of years back

San Anselmo, CA
Loan Type: Owner Occupied 2nd Business Purpose
Amount: $110,000
Days to fund: 15 days
Reason needed: Wanted to make improvements to the property

Penngrove, CA
Loan Type: Construction Non-Owner
Amount: $225,000
Days to fund: 25 days
Reason needed: Completing construction on a house

San Anselmo, CA
Loan Type: Bridge Loan
Amount: $235,000
Days to fund: 33 days
Reason needed: Wanted to buy another home while selling current one

Ukiah, CA
Loan Type: Commercial 2nd
Amount: $460,000
Days to fund: 21 days
Reason needed: Wanted to buy another piece of property

Click this link for our rate sheet, showing the programs we offer.

CALL TODAY, The Guys In The White Hats at
(707) 523-2099

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