Private Mortgage- Money at High Interest Rates, Secured by Real Estate

Private mortgages are as old as real estate itself. People borrowing money from other people and then secure their loan using real estate as collateral.

Banks became popular and the lender of choice for most Americans, especially when the U.S. government starting promoting home ownership in the 1950's with the introduction of the 30-year mortgage.

Most Banks Sell Their Notes to Private Investors

Most banks sell their mortgages soon after they originate the loan. Until recently, most were sold to private investors, either directly or through REIT's and/or mortgage backed securities. These were pools of mortgages, all combined and many times jointly owned by multiple investors.

The quasi-governmental mortgage companies FannieMae and FreddieMac now buy 95% or more of the bank loans.

Where Did the Private Money Go?

Private money is still investing in first-position mortgages. The difference is the money is now backed directly by individual properties.

Want to learn more?

Click Here to for a FREE copy of the Private Mortgage Report. It's easy to read and will answer a lot of questions, including:

• Increasing security of your loan
• Why Private Mortgages are a hedge against taxes
• Long Term Income through Private Mortgages
• Using Balloon Payments to shorten the length of the loan
• Use Private Mortgages for Estate Planning
• How to Document Your Loan for maximum security

Want to learn even more?!? The CALL ME! I'd love to talk with you.

David Safeer 801.510.3566

Transactions #12-14 of 52 in 2011

Transactions #12-14 are actually directly related to the first transaction of the year. How? Let me explain...

For the first transaction of the year, we lent $25,000 to a real estate investor that we had done business with before. He used the funds to put a down payment onto three properties and the owner carried the balance. One needed light rehab, the other two significant rehab. He told us that he had a contractor lined up and that the contractor would bring in fix-up funds.

Two weeks later he called back. His contractor disappeared. No one to do the work and no fix-up money. What did we want to do? Could we bring in the additional funds? He didn't have the resources. Oh yea, by the way, the city has a demolition order on all three properties and we need to convince Mayor Godfrey to stop the destruction order!

Clear Day Capital was not in a bad position, we had only $25,000 into the project. Worst case, we would have 3 vacant lots. The problem? Demolition is not free and the lots would have liens from the city for the cost of demolition and garbage removal. Lots cost money each year- taxes and insurance. New construction is not something we want to do- rehabs are much easier and less expensive and less time consuming.

We needed to make this a safer, more secure transaction and protect our investment. We wanted to make lemon-aid out of lemons. If we funded our current borrower the LTV would not be good and we would not have control. On the other hand, we didn't want to take the properties back- they did not fit our typical property profile and we didn't want to manage them.

Our original borrower went to our good friends and business associates (Shawn, Angel, and Sarah) at The Equity Growth Group (TEGG.) The borrower knew that they specialize in this type of house. What did they do? They called us since they know that we have capital!

We decided that we would work on this together. To make it safer, Clear Day Holdings purchased the three houses after we got approval from the mayor to delay destruction by 120 days. He required that we put rehab funds into escrow and have a firm bid from a licensed contractor, which we did.

Clear Day Capital provided the additional rehab funds, TEGG provides rehab supervision and property management when the houses are ready to be occupied.

We will be into the three houses about $150,000 total. This is low enough that we will be able to have good cash flow. The key for long-term benefit will be finding private money investors who want to lend us long-term (5-10 years) money and terms that we both win.

Want more details? Send me an e-mail, leave a comment, or give me a call!

Welcome to Clear Day Capital

Clear Day Capital provides bridge-loan financing (hard money loans) for professional real estate investors with projects in northern Utah. We listen to our clients, understand their projects, and help them make the project a reality.

New Clients

We work with a limited number of repeat clients that usually have multiple loans outstanding. We carefully screen new clients for experience, capital resources, credit worthiness, and their business plan. If you are interested in becoming a Clear Day Capital client, here is the process:

1. Call David Safeer at 801.747.6343 and set-up a time to meet
2. Meet with David for about 1-2 hours for a new client orientation. Please be prepared to discuss who you are, your experience, at what you are trying to accomplish. If you have partners, they should attend the meeting as well.
3. David will clearly explain Clear Day Capital's underwriting standards, loan documentation, past-due loan policies, origination fees and interest rates, and how to make a formal application to become a client
4. If there is a mutual agreement that we want to work together, you will make a formal application to become a client by submitting a 1003 (uniform residential loan application) and a current credit report. Click here to get the 1003 form.
5. Plan that the first project will take 1-2 weeks to underwrite and fund. Subsequent projects should take about 3-5 business days to underwrite and fund.

We want to make the process as easy as possible and at the same time set the foundation for a long-term working relationship.

Contact Information

Clear Day Capital can be contacted at:

801.747.6343 Phone

801.401.7267 Fax

dsafeer@cleardaycap.com