Private money investing (PMI) can be thought of as private, as an individual or several individuals personal money is invested in real estate or real estate mortgages. PMI is more describing the source of the funds lent to the borrowers, as well other considerations from the investor’s side. It can also be possible that more than one person, even groups of people, (LLC’s, Family Trusts, Corps etc) can invest their money together in what is called fractional trust deed investing. PMI is not different from hard money lending if the terms of the offering are easier qualifying and the interest rate & fees are higher than normal lending guidelines. This type lending fills a need in financing that is more lenient on the qualifying, more diverse and acceptable to more complex transactions than traditional institutional bank type funding. There certainly are very large financial organizations that do hard money lending as well as individuals and smaller outfits that are either Broker or CFL lenders.
Private Money Trust Deed Investing can be accomplished in a variety of vehicles and entity structures, but it is different wherein the creators of these types of investments are not your typical banks or savings & loan institutions. The majority of these investments are created by individual mortgage brokers or smaller companies dealing one on one with investors. There are also what is commonly referred to as “pools” investment funding which are comprised of many investors taking a smaller portion of a mortgage. All of these are considered Mortgage Investing Funding when a property is not being purchased by the investors but they are providing monies as secured loans against or secured by real estate.
The terms trust deed investing and mortgage investing mean the same, especially where a state, like in California, utilizes trust deeds to secure the note instrument to a piece of real estate. Other states utilize another type of document called a recorded “mortgage” document. Although mortgage is a common word used by most people to reflect they have a loan on the property, it is also the name of a document used in many states.
Investment funds which are the larger creators or originators of mortgage investments operate in much larger projects and sizable real estate or higher volume of business compared to the average local private money lending broker or company. Licensing for these companies is often CFL licensing as opposed to BRE Brokers. Many companies can be licensed both ways as each has restrictions and allowable functions. They often find their source of capital from larger institutions such as life insurance companies, substantial family trusts and other sizable capital sources.
Ask us today about individual and fractional notes, private money funding, real estate investing, and other types of investing programs in Bay Area, CA that we offer to private investors who are interested to make money in the real estate world. These types of investments can offer much higher rates of return than bank savings accounts and cd’s etc.
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