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Private Lender - FAQ |
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Invest with us and make up to 22% profit on your
investment!
Q: How does it work?
A: Our Company
is in the business of buying distressed properties (residential
and commercial) located in Manhattan, Brooklyn, Queens and Nassau
County. Once we locate the property, we evaluate
the deal. If the deal makes sense for everybody involved in the
transaction, we buy this undervalued property in the name of one
of our LLCs. We are very conservative in our choices. The
maximum loan amount is based on 65-75% ARV (after repair value),
which means that after all expenses (purchase, closing and rehabilitation
costs, if any) the private investor still has at least 25-35% equity
in the subject property available. See our Private Lending Process for
more information.
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Q: What is a private lending?
A: A private lending
is a loan made by a private individual or a corporate entity to
a real estate investor that is secured by real estate. Private
Loan Investors are given a first or second mortgage that secures
their legal interest in the property thus securing their investment.
We offer very low LTV (Loan to Value) ratios to our Private Lenders,
and this means additional security on the investment.
For example, if a property is valued at $100,000, our Private Lender
will never have to loan more than $75,000 dollars on the property.
That's a 75% loan-to-value ratio.
As a lender, it is in your best interest to minimize the risk and
maximize return. As a lender, you should always have a 25% safety
cushion. We don't violate this rule, because your security is at
stake.
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Q: How am I going to be protected?
A: When
we buy a property, the money private lender put into a deal is
secured by the following:
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Mortgage – a legal document, which states
that you are a first position lien holder and you can foreclose
on the property in case of default;
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Note – a legal document, which states
that a borrowing entity will pay you an agreed upon interest;
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Home Owner’s Insurance where you will
be added as additional insured in case something happens to
the property;
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The private lender has always at least 25-30%
equity in the property.
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Q: Where are you buying these properties?
A: We buying distress properties (residential and commercial)
located in Manhattan, Brooklyn, Queens and Nassau County.
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Q: What is the term?
A: We usually borrow money for six - eight months. This is enough
time to buy the property, renovate and sell it. Sometimes, we may
use the funds up to 12 months.
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Q: What is the return on investment?
A:The rate we are currently paying is 12% per annum plus one point
(one percent of the loan amount), which are usually rolled into
the loan amount and paid when the property is sold unless different
terms are negotiated. If the property is sold within six months,
at the closing you will be paid the principal balance of the
promissory note, six months of interest, and one point. If you
would do another transaction on the same terms during the same
calendar year, your actual annual rate of return would be 14%.
For more details as to how you can make up to 22% annually, see
our Private Lending Programs and
our Private Lending Process.
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Q: What
is the minimum amount required to be on the private lender’s
network list?
A: $100,000. Please be advised that you
should not lend money if the amount you plan to lend will be
more than 10% of your total net worth in any single investment
transaction.
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Q: Will I see the property before I will be required to lend
the money?
A: Yes. You will inspect the property and have an absolute right
to decide not to lend on this particular property.
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Q: At what point do I have to make a decision to lend?
A:
Once you agree to fund the project, you will be required, within
two business days of the signing of the Letter of Intent, to transfer
10% of the purchase price to the attorney’s escrow
account. Once the 10% deposit is transferred, you will not be able
to change your mind. You will be contractually obligated to lend
the rest of the money at the closing. If circumstances beyond your
control arise and you would request a return of funds, we will
do our best to substitute you with another lender and return your
deposit.
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Q: Who handles all the paperwork?
A: Attorneys and title companies.
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Q: What
is your Principal’s professional
background?
A: The Founder and CEO is Igor Noble. He has
been investing in real estate from 1992. He is an attorney in
the State of New York and was concentrating on Real Estate practice
before he formed Great Northern Mortgage Corp. in 2004. From
2004 Mr. Noble was actively involved in commercial and residential
financing, and investing in real estate in New York and Florida. Mr.
Noble lives with his wife and three children in Hewlett Harbor,
New York.
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Q: Where
is your company’s office?
A: 68-60 Austin Street, Suite 302, Forest Hills, NY 11375
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Q: Who borrows at high rates and why?
A: Investors
like us do, because we have learned in our business that it is
not the cost of money that matters, but quick access to the funds
so we can capitalize on opportunities. Our company can acquire
good deals on properties because we can act with lightning speed
and can close with cash. Private loans give us this competitive
advantage over other investors who take weeks to go through the
bank approval process in order to purchase properties. Additionally,
if a real estate investor locates a good deal on a property, many
times the bank wants to loan on the purchase price not the value
of the house, thus penalizing the investor for finding a great
deal. Having access to money is generally a deciding factor in
investing in real estate, so paying a higher interest rate is irrelevant
when compared with the risk of losing the deal.
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Q: Tell me about your company/companies?
A:
Great Northern Family of Companies consists of Great Northern Realty,
Corp. and Great Northern Mortgage, Corp. We are a team of professionals
that focus on real estate investments and services. On the investment
side of the business, we buy, renovate, and sell distressed undervalued
commercial and residential properties. On the service side of the
business, we provide commercial and residential financing, short
sale negotiations and loan modifications, we do credit repair to
individuals with blemished, not perfect credit. We are proud members
of New York Better Business Bureau, New York and National Associations
of Mortgage Brokers, local Bar Associations, ETRUST organization,
which make sure that our companies' actual use of personal information
complies with the sated policies.
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Q: I think I would
not be able to sleep if I would become a private lender.
A:
In this case please keep your money in your IRA, CD, and/or saving
accounts. We are only looking for private funding with individuals
able to see the big picture and individuals who understand the
concept of real estate investing. We do have available funds
to finance the projects. However, when the lifetime opportunity
presents, we want to make sure we have enough capital to win
it.
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Q: My friend told
me that I could get more than 12% in return if I would invest
in the stock market.
A: This maybe a true statement.
Please remember, however, that you can lose your whole stock
investment in a matter of days. What we are offering is the security,
stability and the guaranteed return of your investment.
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Q: Do you think I should talk to my attorney or CPA before making
a decision to join the network?
A: Yes. We want you feel comfortable during your decision making
process. We advise you to talk to your attorney, CPA and maybe
financial planner to analyze your personal financial situation
and see if this is the right decision for you to make.
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Q: How do I use my IRA or pension plan?
A: Making real estate loans is a widely
accepted use for IRA and other Retirement Plans. Most people do
not know that you can make private mortgage loans using the funds
which are already in your IRA's and other retirement plans. Think
of the power of loaning out funds at high interest rates that are
Tax free or Tax Deferred!
In order for you to use retirement accounts for loans they must
first be administered by a third party custodian. One custodian
we commonly work with is Equity Trust Company. You can visit them
on the web at www.trustetc.com or simply talk to us and we'll help
you with the set up of your account.
After selecting your custodian, you simply send a transfer form to
them and they will do all of the work for you. Once you have done
that you are ready to make private mortgage loans. From there, you
simply notify your custodian about the investment you are looking
to make and they send the check for the gross amount of the loan.
Even better, we can do all the work for you. You just sign a few
documents, sit back, relax and wait for your money to grow tax free
or deferred.
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Q: What
is your company’s Privacy Policy?
A: We will
not sell or share any personal information about you except as
permitted by law. The security of your personal information is
very important to Great Northern Family of Companies and we take
a number of steps to safeguard it. For example:
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We limit access
to personal information to those employees or agents who assist
us in providing requested products and services to you. Employees
are required to comply with our strict policies and procedures
regarding the handling of your personal information. Employees
who violate these policies are subject to our normal disciplinary process.
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We
maintain electronic, physical, and procedural safeguards that comply
with federal regulations to protect your nonpublic personal information.
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We use industry standard data encryption technologies
when transferring and receiving consumer data on our website.
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We devote considerable resources to
the maintenance of secure Internet communications to help ensure
that your transactions with us are conducted in a safe environment.
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Q: What are my options if Great Northern
or a borrowing LLC does not pay?
A: First of all, we have never defaulted on a private lender
note. Integrity and commitment are essential parts of our business
and we only make sound investment decisions. However, here
is the answer to the question:
- We could restructure the
payment schedule on the note. For example, let's say we
are behind on payments to you. We can and would like to
keep the house, but can not come up with enough money to
bring you current in one lump sum. You could let us continue to make regular payments and we
would make additional payments towards our arrears, or you
could simply add the arrears to the principal balance and
extend the term of the loan. This means you would be collecting
interest on interest for the entire remainder of the loan.
There are always ways to work it out if both sides are willing.
- Have us deed you the property. This is an
opportunity for you to get this real estate property at a
greatly discounted price. When this happens, you can create
tremendous profit by reselling the house.
- If left with no
other choice, you can simply foreclose. Foreclosure is not
as time consuming and costly of a process as most people
think. You would send your note and the mortgage to an attorney
and ask to start foreclosure. All you have to do then is sit
back and wait. Nine times out of ten, before foreclosure is complete,
someone will be calling your attorney's office with a payoff
letter, and your loan will get paid off. When this happens, you
will collect all accrued interest, your principal balance, and
all attorneys' fees, court costs, and all other expenses you
have incurred in connection with your loan.
If you end up with a house, that does not mean you have to keep it. It can be
sold fast enough at below market price and still produce a profit over and above
the already high yield on your loan.
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If you are a private investor or an individual
who would like to join our private lender’s network, or
would like to get more information, please submit a form below
and we will contact you shortly. If you would like to reach Mr.
Noble directly, his email is inoble@GNCommercial.com,
phone 1-877-IGOR NOBLE.
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