Val-Chris Investments

A private money lender can be the solution to all your home, investment, business, and real estate ambitions, but the dream doesn’t come easy. Circumstances come and go, and you may need to take action as soon as possible. Never fret—read on for the best approaches to help you find a private money lender for your particular situation and underlying needs. After reading, you’ll know more about how to find a private money lender to back your investment and turn your dreams into a vivid reality.

Earlier this month, our VP Jeff LaMotte was interviewed by Real Estate Bees along with peers on the affect this pandemic has had on the private money market. This survey included information collected from over 2,000 active hard money lenders and Jeff was asked some specific questions as an industry expert. During the COVID-19 crisis, many non-QM and hard money lenders closed up shop due to the future’s uncertainties with this virus, but businesses like Val-Chris Investments remained open, continuing to serve the needs of our private money clients!

Why?

A large part of the Private Money Trust Deed investment market had been gobbled up by the Institutional Non-QM (Qualified Mortgages) Mortgage Companies backed by Wall Street Investment Companies seeking higher yielding investment strategies in the last few years.  Trust Deed Investors were being squeezed out of the market and replaced by large aggregators. This provided fewer opportunities and competition was fierce for these loans.

Conventional mortgage rates are generally determined by a number of factors such as the federal reserve’s rate policy and the secondary market. In the current environment of rising interest rates, while interest rates are generally low, conventional lender’s rates change daily in small amounts. The final rate is dependent on when the rate is “locked in” by the lender putting the loan together.

On September 9th, 2015, the California Legislature passed bill AB 139 and Gov. Jerry Brown has signed this new legislation which has created a new form of deed for the transfer of real property in California effective 1 January 2016. The new deed is call a “Revocable Transfer on Death” deed (which we will call a revocable TOD deed), and this deed allows an owner of real property to deed it to a named beneficiary without the risk of a lengthy and costly probate proceeding or the requirement for formal estate planning documents.

A proposed Constitutional Amendment being considered by the California Senate this 2016 session will potentially affect thousands of taxpayers in our state, either directly or indirectly.

Private money lenders or hard money lenders exist to serve typically underserved markets in the real estate industry. Those markets range from potential homebuyers who are having difficulty getting residential loans from banks to investors and commercial entities seeking bridge loans. However, given the number of players in private money loans today, underserved may not be the right word.

In the world of trust deed investing, many people wonder what the difference is between using an appraisal as opposed to a broker price opinion (a “BPO”) to secure a hard money loan for either a residential or commercial property. The truth is that they serve the same purpose, as private money loans are issued by private investors, and the loan’s conditions are greatly affected by the value of the asset being used to secure it. In fact, a borrower’s equity in the property is a key consideration when underwriting a loan.  While both the BPO and the appraisal will give the private money lender a value on the property, are the costs, report detail, and skill level of the valuation analyst the same?

Investors have become accustomed to the Federal Reserve’s routine. “Coming Soon! A Rise In Interest Rates…But Not Too Soon!”

Anyone with the goal of becoming wealthy has, at one time or another, likely considered investing in real estate. Indeed, this is one of the best ways to achieve financial security. But it is a very competitive industry, and so the best way to ensure the highest chance of succeeding in the real estate investment game is to employ the proper strategies.