East Texas Creative Investments, LLC buys houses in a variety of ways.
When we pay cash for a house we use private lenders, such as yourself, instead of using our own funds or bank loans. Since we get a high return on our own cash, we can offer our private lenders a high yield when using their money to fund our deals.
The loan-to-value-ratio (LTV) for our private lenders is typically 75% or less of the after-repaired-value (ARV) and is usually considerably lower (as low as 20% LTV). For example, that means we will borrow from $20,000 up to a maximum of $75,000 on a $100,000 property. The money we borrow from you is secured by a 1st note and deed of trust (mortgage) against the property or, if you wish, we occasionally have an opportunity for a second position at a higher interest rate. Give us a call and let us know what an acceptable rate is for you on your money with a well collateralized loan. Monthly payments include principal and interest, or interest only, depending on your desires and the properties we have available for a mortgage to secure your money. Our target properties are in nice neighborhoods with an ARV range of about $75,000 - $150,000.
Interest only payments keep 100% of your principal working for you. Some loans have a balloon payment due in 3 to 7 years. The term is decided by the investor's desires. Even with Dodd/Frank and Texas legislation, we can give balloon notes since we are a corporate structure as oppposed to an individual or owner occupant. Some private lenders prefer the comfort of longer term notes and we can work with that as well, whether it's 10 years or 30 years or anywhere in between.
Our private lenders get:
Deed of Trust recorded against the property
Added on to the hazard insurance as the mortgagee
Copy of an appraisal or market analysis report
Lender's title insurance
We pay all costs involved to close the transaction. There is no cost to you, the investor.
To invest, we would first find out how much you are looking to loan and for how long. We would then look for a deal that will meet your criteria. Once located, I would call you, give you all the details and then you would decide to participate or not. There's never any obligation until after you approve the deal.
We are not mortgage brokers and we never co-mingle or pool funds together. One investor... one note and deed of trust. When you decide on a deal, you'll send your funds directly to the closing agent at a local title company or closing attorney when we're ready to close. We'll never accept your funds directly without your money being secured against a property, except in some occasional and mutually acceptable instances of an unsecured promisssory note which would be for $10,000 less. Anything over $10,000 we insist that our private lenders note be secured.
For some investors we can offer selling existing notes secured by real estate at a discount to yield 11-15%. These types of deals are less common but opportunities to buy discounted notes occur now and then.
All the houses used as collateral will be located in the Palestine, Texas area.
A majority of our private lenders currently include family members, seasoned business contacts and previous sellers I bought property from. Only recently have we expanded this to others, and the opportunities are limited at times and it is first-come, first served. So contact us now to secure your opportunity to become one of our private lenders.
If you have funds in a retirement account, you can use them to invest. The IRS requires the use of an approved custodian to qualify for tax deferred or tax free gains. We recommend www.TrustEtc.com to create a self-directed real estate retirement account. We will be glad to discuss this with you further.
To learn more, or to be added to our private investor list, click here to email your name, phone number, amount you have available and best times for me to call you. Your questions are always welcome.
Ken "Bruce" Crawford
General Manager, East Texas Creative Investments, LLC