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The subtitle of
Robert Kiyosaki's excellent book "Rich Dad's Guide
to Investing" is "What The Rich Invest In, That
The Poor and Middle Class Do Not!" We have an
investment program in Alaska Mortgages that meets
Mr. Kiyosaki's criteria. While you don't have to be
rich to invest in our program, you must be a person
of financial substance (Click:
Investor
Suitability)
and have a greater than average knowledge of
investments. These are
Mortgages that don't meet the criteria of the
highly regulated banks and insurance companies.
Typically they are Private Mortgages secured by
less attractive properties, borrowers with weaker
credit, Mortgages secured by land, or Mortgages to
borrowers whose mortgage payments exceed payment to
income ratios established by conventional lenders.
We sometimes also refer to these as "ugly duckling
mortgages". But like the fable of the ugly duckling
who turns into the beautiful swan, we have
developed methods to make such Mortgages attractive
investments for the sophisticated, affluent
investor. To protect the
financial integrity and liquidity of our banking
system and our life insurance system, government
regulators allow regulated investment entities to
invest in only the very best and most secure
mortgages. While Rolls Royces, Mercedes, Lexuses,
Lincolns, and Cadillacs are considered the best
cars, there are many less expensive cars that still
provide comfortable and reliable transportation.
Likewise, while Private Mortgages are riskier than
traditional conforming mortgages, they do provide
much better investment returns. The Mortgage
Investment Programs that we offer typically pay
interest from 9% to 15%. To consider the
significance of the rate differential between
conforming mortgages and our Private Mortgages,
consider the following: • At 6%
interest it takes 12 years to double your
money. Of course the
above examples of compounding do not include the
impact of taxation. That's why one of the best ways
to invest in Mortgages is through your Individual
Retirement Account ("IRA") or your pension or
profit sharing plan. Our average investor yields
over 12%. If a 12% Mortgage is allowed to compound
(assume reinvestment of principal and interest
payments) tax free, an initial investment of
$25,000 will grow to $241,157 in 20
years. While there are
significantly higher returns on Private Mortgages,
their risk exceeds the risk tolerance of some
investors. That's why we have strict criteria on
Mortgage Investments that we sell. In every case we
limit the amount of your investment to a maximum
70% Investment to Value (ITV) ratio. (Most
investment fall in the range of 50% to 65% ITV).
That means that if you make a $70,000 Mortgage
Investment, that investment will be secured by real
estate worth a minimum of $100,000. Therefore, in
the event of default, there is at least a $30,000
value margin to protect your investment. This does
not necessarily mean that the owner/borrower has a
30% equity. What we do to reduce your ITV to 70% or
less is, we either buy the loan from a Seller at a
discount or make the whole loan and then sell you a
partial interest with us retaining the riskier
residual interest in excess of 70% of value. In the
event of default, we always maintain the right,
but not the obligation, to cure the default
and continue making the borrower's payments while
we foreclose on the property. However, since we do
not guarantee your investment or your payments, in
the event we did not exercise our option, you would
be free to foreclose and our residual interest
would be subordinated to the return of your
investment and interest thereon. If you are a
sophisticated and affluent investor interested in
Mortgage Investments earning 9% to 15% interest,
then you should continue on this website by
completing our Mortgage Investment Tutorial which
will provide you with information to determine if
Mortgage Investments are suitable for you.
(Click: Mortgage
Investment
Tutorial). |
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