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Q: I need 70% LTV, why won’t your investors go just 5% more?
A: Remember, the LTV percentage is the amount of exposure the investor will allow. As the exposure or LTV, increases, so does the risk for the investor. Keep in mind it is not a bank or corporation taking on the risk, but a small business entity backing your venture. Once you have performed on a few loans with a lender, the relationship builds and they may be open to higher LTV’s on future packages.
Q: How long does it take to fund my property?
A: A lot depends on you. If you have completed the Private Money Exchange product training through reading and listening to the CD’s, you are well on your way to a rapid close! There is not a standard length of time. The timing is determined by whether or not your package is complete enough to meet the lender’s requirements for presentation. Please allow at least 4 days from start to finish in order to receive documentation, review, match to a lender, send package to lender for review and approval, open escrow, prepare docs, and fund. There are instances when it can fund in 3-4 days, but plan for 8-10 days.
Q: What do you charge for points and interest?
A: Our standard quote is 5-8 points and 12-18%. The points and interest rise or fall according to the risk factor and the investor preferences.
Q: Who pays closing costs?
A: Typically it will be the borrower; however, closing costs are paid by the buyer and/or seller according to the terms of the purchase and sale agreement. It will not be paid by Private Money Exchange or the lender.
Q: When do I know if Private Money Exchange will get my opportunity funded?
A: From the time you input your information into our online system, please allow 48 hrs for a response. Expect a phone call, followed by an email regarding the information you provide us. The first step is to discuss in more detail what you have outlined online so we can determine whether or not our parameters meet your needs. After that it is determined, we can move on to the amount of assets, collateral, and other documentation needed to create a detailed picture for lender of who are and your ultimate borrowing goals.
Q: What do I do if no one calls me in 48 hrs?
A: Please call us directly at 800-473-6051 or send an email to customersupport@privatemoneybank.com. It is possible we did not receive your information, and will follow up with you right away.
Q: Will you fund land or development ready building lots?
A: We concentrate on investment and business-use real property only. Rental properties create revenue streams and often involve a lower amount of investment money before recovering your initial investment. Please choose another lending option for land, construction, and development opportunities.
Q: I am new to the real estate investment business and I still don’t fully understand what I am reading and hearing in the Private Money Exchange product – who can help me?
A: You made a choice to create profits and income through real estate investing and we applaud you and are here to encourage you! Purchasing a product is just one avenue to pursue. Continue learning by networking in your community. Meet realtors and title and escrow personnel, join investment groups or clubs, and seek out those involved in foreclosure auctions to gain additional insight. Don’t forget to connect with other small business owners and entrepreneurs through your local chamber of commerce. It takes time to learn the language and know the best resources to find great deals!
Q: If I bought the Private Money Exchange product does that mean you will fund every opportunity I send to you?
A: The Private Money Exchange product is meant to train and educate you on how to package private and hard money deals for funding. It also teaches you how to determine what is a “good deal”, where to look, what types of documentation is needed, or how to become an investor by making a higher yield on money you have sitting in CD’s. We review every opportunity we receive, but Private Money Exchange does not guarantee funding.
Q: Why do you charge more than my hard/private money lender in town?
A: Private Money Exchange was created to assist those that may be new to investing and are unsure where to begin or how to negotiate with confidence. Private Money Exchange takes extra care and attention in placing their deals while helping you learn and prosper along the way. We serve a nationwide clientele, provide education and more learning opportunities than you may find with other lending sources. It is our goal to create strong relationships with Private Money Exchange students, borrowers, and investors.
Q: What documentation do I need to fund a loan through Private Money Exchange?
A: Our lending affiliates and your relationship with those affiliates dictate much of what is required. The first couple loans will require much more information because we are establishing who you are, your level of experience, as well as beginning a business relationship with you. See our Guidelines page for a more complete list. If you are funding multiple properties with the same investor over the course of a year, it is not likely we will need two years of tax returns every time. If the opportunity is solid, it won’t be a problem to provide the data requested because you have done your due diligence before ever presenting the opportunity to us.
Q: Are you limited to certain states?
A: We have investors who are interested in opportunities in all 50 states.
Q: Will you close in the name of a Limited Liability Company (LLC)?
A: Yes, there are allowances for title to be vested in the name of a LLC. It is also a requirement with all loans closed in a company name, that loans must be personally guaranteed.
Q: Do you provide a Proof of Funds to obtain a purchase and sale agreement?
A: Once Private Money Exchange has received all your documentation and matched you with an interested investor, you will receive a lender pre-approval stating all the terms and conditions of the loan. It is up to you to negotiate the purchase and sale agreement before presenting the opportunity to us.
Q: Where do you come up with the value to determine the 65% LTV?
A: We base the 65% LTV on the acquisition or purchase price, not the future value. If the purchase contract is agreeable at $100,000 but you determine the house is worth $120,000, $65,000 is what the market will bear, therefore, $65,000 is the market value and the amount that can and will be lent. If you do not have cash to contribute to the transaction you can also pledge other properties as collateral where a first lien position can also be secured by Private Money Exchange. This property can be pledged out of your own portfolio or the portfolio of a friend or business partner that has agreed to use the collateral for the opportunity. In the event that a property can be included in the transaction as collateral Private Money Exchange can and will fund up to 65% of the blended value of the collateral which will allow you the buyer or the borrower to received 100% financing on the acquisition as well as cash back at closing. This same scenario can also be achieved by having the seller of the property take back a promissory note in the amount of 35% or more in a second or junior lien position. Either way, you can purchase property with no money out of pocket and receive cash back for fix up and repair.