PSG Capital Partner's investors are an integral part of providing creative financing solutions for borrowers. It is Our Mission to be Your Financial Partner by providing you with profitable opportunities and protecting you against risk. More specifically, we underwrite First & Second position loans called First Trust Deeds & Second Trust Deeds based on the quality and long term value of the collateral, as well as the borrower’s ability to repay the loan.
Our investors earn 7.50 to 10% annually* with the security of knowing that their investments are secured by real estate and backed by a large amount of equity in the real estate. We offer experience and expertise to help turn your cash into a stable, high yield income producing investment through Real Estate Trust Deed Investing.
Throughout history, this has been a strategy of the elite. Due to today’s harsh lending environment, an opportunity for everyday qualified investors has opened. Many people have lost money investing in stocks, bonds and mutual funds with no collateral or guaranteed return. Our Real Estate Trust Deeds are unique investments because they provide a high return, a secured asset and reduced risk calculated against the principal.
Why Would Any Borrower Want to Pay Such High Interest Rates?
Conventional lenders today are extremely risk adverse, and have very stringent underwriting requirements. They do not want to lend on properties that are not “move in ready”. They are taking 45-60 days to close a simple loan, with excellent credit, good steady income borrowers, good reserves, and good documentation. It is even harder for borrowers that have less than stellar credit, and imperfect paperwork. Borrowers with plenty of equity who purchase properties can close fast, Rehab or rent without these Banks Underwriting problems and close with days not months. The sellers can now pick-and-choose the strongest buyers with the quickest closing and least contingencies.
Our private money loan borrowers are generally:
Buying properties at foreclosure auctions that require “all cash” on the spot or within 24 hours;
Buying (bank-owned) properties that are not “move in ready”;
Buying rental properties when they have “too many loans” according to the lenders; and
Buying “all cash” in a seller’s market, with the intention to re-finance to fixed rate conventional loans promptly.
Our private money loan borrowers are savvy real estate investors who are expecting a good return and/or who are able to re-finance very quickly, once the property has been property repaired or upgraded. They are willing to pay for a quick and simple source of capital.
As real estate lenders, you face the risks of
Borrower’s life changes (e.g., accidents, unemployment)
Property disaster (e.g., fire)
At PSG Capital Partners, prefer to manage risks in advance, and minimize the likelihood of foreclosure. We look for borrowers who are seasoned real estate players. We require our borrowers to have significant down payment or equity. We also require borrowers to name us as “loss lender payee” on their property insurance policies in case of a fire or other structural damages.
We also minimize our investors’ downside by looking for properties that
We can foreclose and re-sell relatively quickly and smoothly; and
We can generate rental income easily in case we are unable to sell after foreclosure.
Our many battle scars in the complicated world of real estate can really protect our investors. We have successfully completed foreclosures and negotiated “deed in lieu of foreclosure” with our borrowers. Our brokerage team can help our investors quickly stage and sell a property after foreclosure. Our property management team is ready to maximize the rental income in the event we are unable to sell after the foreclosure.
What Is the Minimum Investment? Do You Accept Self-Directed IRA Investors?
We work with two types of private money loan investors – those who want to be the sole lender on the loans, and those who want to diversify into multiple loans.
For investors who want to be the sole lender on these loans, our minimum loan size is $50,000. Yes, we can accept self-directed IRA for these “sole lender” loans.
For investors who want to diversify into multiple loans, we organize “loan pools” with 3-10 investors on a loan sharing “undivided interests”. For these pooled loans, we have a $50,000 per investor, per loan minimum. This option enables our investors to enjoy these monthly interest payment checks from several loans and several borrowers, with different maturity schedules, and different property locations. This is a good diversification option for private money loan investors.
Private investors can also benefit greatly by investing funds in short term real estate mortgages. Real estate mortgages are one of the safest investments for a predictable monthly high return in today’s market. Forget about taking losses with your stocks and mutual funds. Invest in mortgages backed by real estate in California and take advantage of today’s bargains in real estate.
Investing funds in real estate mortgages allows you to take advantage of the lower property values without worrying about tenants and toilets. Put your money to work providing short term funds to real estate investors who will rehab single family houses, while you make a great return on their efforts.
Providing funds for real estate mortgages allows distressed property owners to sell their houses and investors to purchase rental properties at reduced costs. The community enjoys the increased value of renovated properties, the investors are providing good rentals for displaced home owners and you receive a great rate of return on your safely invested funds.
There are a million posts about self-directed IRA’s already online. Most people by now already know what a self-directed Ira is, but if you don’t, here is a simple definition.
A self-directed Ira is by definition an Ira account where you can make investments in non-publicly traded investment vehicles. Instead of being limited to stocks, bonds, mutual funds, etc., you can buy real estate, invest in tax liens, private placements, and much more.
So, what can’t you invest in?
The IRS defines a prohibited transaction as follows: “Generally a prohibited transaction is any improper use of your IRA account or annuity by you, your beneficiary or any disqualified person. Disqualified persons include your fiduciary and members of your family (spouse, ancestor, lineal descendant, and any spouse of lineal descendant).”–Source IRS Publication 590
In other words, you can’t make loans to yourself, your family, or buy real estate for personal use.
Why use a self-directed IRA?
The number one reason for a self-directed Ira is to invest in Real Estate. You can buy rental property, make high yielding loans on real estate to others, (deeds of trust), and of course join the millions of others in America making high returns in the fix and flip market.
How do I choose a self-directed IRA company?
Although there are many to choose from in today’s crowded market, I still prefer to go with companies that have been doing this the longest and offer the lowest fees. The annual fees and per investment fees can really get you so it is important to do your own research. We’ve found the following companies to be the best in our experience.
Equity Trust: http://www.trustetc.com/