3. iii
CONTENTS
Real Wealth Real Estate: 10 Minutes to Low Risk Investment. . . 1
The Stellar Advantages of Real Estate Investing. . . . . . . . . . . . 2
Welcome to Hard Money Made Easy. . . . . . . . . . . . . . . . . . . . . 4
Here’s How it Works. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
So, What Exactly is a Private Hard Money Loan?. . . . . . . . . . . . 8
A Run-Through of the Loan Process. . . . . . . . . . . . . . . . . . . . . 11
Short Term High Interest Finance. . . . . . . . . . . . . . . . . . . . . . . 13
Safer Investing in Real Estate Today. . . . . . . . . . . . . . . . . . . . . 15
Why People Need Hard Money: Community Building. . . . . . . 18
Making the Yield: The Goal in Business. . . . . . . . . . . . . . . . . . 19
Why is this a Major Opportunity?. . . . . . . . . . . . . . . . . . . . . . . 21
4. 1
Real Wealth Real Estate
10 MINUTES TO
LOW RISK
INVESTMENT
What is the one investment vehicle that nearly all wealthy
individuals swear by?
The unequivocal answer is: ‘real estate.’ For holding onto
accumulated wealth, or for creating new wealth, there’s simply
nothing better for investors.
Real estate billionaires, in fact, make up a significant portion
of total billionaires in the world–Sheldon Solow, owner of
Manhattan’s 9W 57th tower; Ted Lerner, Washington, DC
shopping mall magnate; and leading the pack, of course, is
Donald Trump, who trades in real estate.
Even Ray Kroc, founder of McDonalds, was in the real estate
game.
There’s a perfectly good reason why so many wealthy people are
attracted to real estate and stick with it throughout their wealth-
building careers.
For one, real estate is a stable investment in comparison with
other investment vehicles, such as the stock market. The stock
market will always rise and fall at the whim and emotions of a
fickle market. To say the least, it’s much riskier and stressful than
most people would like.
The same holds true for mutual funds, commodities, and
options.
5. 2
THE STELLAR
ADVANTAGES OF REAL
ESTATE INVESTING
Before you enter into any investment, ask yourself...
Do I have control over the asset?
Can I increase the value of the asset?
Is my investment secured?
Is my investment insured?
When it comes to stocks, mutual funds, commodities, and
options, the answer is NO.
You have no control, no value-add, no security, no insurance.
But with real estate, you have ALL these assurances and
benefits.
Do you have control over the asset? Absolutely. Real estate is
a HARD ASSET. Your fund manager has the ability to minimize
and manage risk…and structure it AWAY from you, the investor.
Can you increase the value of the asset? Yes! You can improve
it, rehab it, add amenities, remodel, rebuild, expand, and
increase its value and longevity in a myriad of ways.
Is your investment secured? Yes, again. When you lend private
hard money to a borrower on a property, you get a secured,
recorded lien to protect your interest. And that lien is typically
a first position lien, putting you in the driver’s seat should your
borrower default.
Is your investment insured? YES! Depending on your
investment, you’re insured with either a residential hazard
6. 3
insurance policy or a commercial policy. So in worst case
scenario, should something devastating happen to the property,
your investment is insured.
As you can see, the benefits of investing in real estate far exceed
those of the stock and mutual fund markets.
Your real estate investment–when managed correctly and
intelligently – has the power to create continuous long-term wealth.
Because of these advantages, it’s not uncommon to find people
moving established wealth into real estate to make it more
secure, so that they can grow and ‘keep’ what they have.
Right now, I’m going to share with you how investors just like
you can enter the real estate investing arena without ever having
to buy, sell, manage, or landlord a single property. And without
ANY previous experience whatsoever.
You’re going to discover how to earn significant returns on your
investment in a short span of time by investing in a Private Hard
Money Fund.
And the best part is, there’s nothing complicated about it.
Tremendous investment
opportunity resides
within the real estate
industry. For wealth
generation, nothing
pays off quite as
handsomely.
7. 4
Welcome to
HARD MONEY
MADE EASY
I think you’ll agree that real estate investing is a goldmine for
people ‘in the know.’
While it can take years to orient yourself to certain real estate
investing strategies, there are others ways investors can
capitalize on this opportunity.
That brings us to hard money, and how easily it bridges this gap.
Hard money, also called ‘private money,’ is a term used to
describe loans that are secured by real estate and funded by
private individuals or parties. These loans are offered at a much
higher interest rate than your average bank.
With hard money, the underwriting guidelines are much less
invasive and less time consuming than those offered by banks.
When borrowers actively seek hard money loans, they do
so because it’s convenient, easy, and readily available. The
borrowers I’m referring to are real estate investors—rehabbers,
contractors, operators, and fix and flippers.
The borrower need cash NOW. They must act quickly. They
don’t have the time to wade and slog through the lengthy bank
approval process. Plus, the chances of a rehabber, operator, or
contractor obtaining an investment loan from a traditional bank
is very slim.
Which means they’re highly motivated to seek out private
hard money lenders.
8. 5
They will happily pay a premium for the privilege and
convenience of accessing readily available cash to fund their
deals and rehabs.
And that makes investing in a private hard money fund VERY
attractive to you, a capital provider.
When invested wisely with an experienced fund manager, you
can feel confident that your capital is secured, insured, and that
you’ll realize strong, healthy returns.
9. 6
HERE’S HOW
IT WORKS
A fund management team handles most of the transaction once
a prospective deal presents itself.
• The first thing the fund team sets out to achieve is the
discovery of a terrific piece of property with great profit
potential. Distressed properties, foreclosures, and major rehabs
are excellent sources of opportunity, among others.
A good fund manager focuses on finding these gems to ensure
that the property provides excellent returns to you, the investor.
• Once a property is located (either actively or through a
borrower who approaches the fund for a loan), the fund team
finds qualified, experienced rehabbers to repair and rehabilitate
the property. If the borrower is experienced, he or she may
already have a crackerjack rehab crew in place.
The team is also proactive in finding a buyer for the property.
The fund manager oversees the project to make sure that the
rehab crew and borrower are effectively adding value to the
property through improvements to the internal and external
aesthetics, as well as to the property’s utility, if needed.
• Once the property is renovated, the borrower sells the
property at a premium. At closing, the principal capital comes
back to you, the investor, plus the pre-determined interest and
fees.
10. 7
This short-term investment—typically 6 months to a year–results
in great profits for the investor and the fund management team.
Investors can be assured that the interests of the management
team and investor are aligned in these deals because both
parties are incentivized by the success of the purchase, rehab,
and sale of the property.
11. 8
So, What Exactly is a
PRIVATE HARD
MONEY LOAN?
A private hard money loan is a loan that is issued by a Lender–a
private investor, fund, or company–to a Borrower.
It’s a type of asset-based loan, meaning the loan is mainly
predicated on the PROPERTY’S CURRENT AS-IS MARKET VALUE.
Now, the person borrowing the money receives the funds only on
the condition that they pledge the real estate as collateral for the
loan. This is called a securitized loan. The security instrument is a
lien on the property in the form of a mortgage or deed of trust.
So if the borrower should default on the loan, the lender/fund
takes possession and ownership of the property. Make sense?
The interest rates for hard money loans are much higher than
interest rates for other types of investments. For several reasons:
convenience, risk, quick availability of funds, flexibility, and loan
structure.
The fund management team is also adept at ‘structuring away’
the risk from you, the investor.
The team stacks the deck in your favor to make sure that your
capital is as safe as can be, no matter what happens with the
property. So if the borrower (let’s say a rehabber or fix and
flipper) fails to comply with the terms of the deal, the fund
manager contractually and legally has the option to seize
the property. The fund manager then has the right to sell the
property as recourse, and effectively return the capital to
the investor.
12. 9
Hard money loans are attractive to borrowers for a number of
reasons:
• Experienced borrowers such as rehabbers, real estate
investors, operators, and contractors, s don’t want to deal with
the ‘red tape’ and paperwork hassle that comes with initiating a
loan with a bank.
There are always stringent guidelines and loan committee
processes that must be followed. Hard money loans focus more
on the collateral, while traditional banks harp on things like
personal credit rating, financials, and occupation.
• Many borrowers are also real estate builders and flippers, and
have ample experience. They have a goal in mind with a piece
of property and can spot an opportunity immediately.
So with a quick, short term loan and some personal investment
in the property, they can flip it for a profit. Then turn around and
do it all over again. Lather, rinse, repeat.
• Private money lenders have the ability and agility to be more
creative with more challenging loan scenarios. For instance,
there are strategies such as cross collateralization and more
flexible loan terms…which are very attractive and for which
borrowers gladly pay a premium.
Establishing reliable and trustworthy relationships with your
borrower is critical for a successful and profitable enterprise.
When a borrower demonstrates that they can perform over and
over again, and they continue to come back to you to fund each
of their projects, it’s a homerun for the team.
• Some borrowers may have filed for bankruptcy or have credit
issues, which stymies their ability to get traditional financing.
When this is the case, a hard money loan is the perfect
vehicle for them to climb out of hole and get back into
the real estate investing game.
13. 10
And even though these borrowers may be a higher risk, your
risk is minimized and your capital is protected with contractual
default and forfeiture provisions in the loan agreement and in
the mortgage and deed of trust.
Remember, the loan your fund manager originates is ASSET
BASED, so you’re covered by the collateral.
14. 11
A RUN-THROUGH OF
THE LOAN PROCESS
Let’s take a close look now at the loan underwriting process,
so you know how well your investment is safeguarded and
protected.
Hard money loans work in a specific way, according to the terms
of the loan.
Requirements involve proofing the equity in the property that’s
being pledged as collateral. Timeframes for hard money lenders
are super-fast. The entire process can be completed in 5-7
business days.
Once all the requirements are met and the documentation is in
place, loan funding is very fast.
The loan process itself requires several core steps:
• Pre-qualification: Before the loan process starts, the fund
manager gathers information about the borrower and the
property. The property itself is analyzed, comped for value,
reviewed, and then either rejected or approved. If it’s approved,
we take it to the next step.
• Loan application: Next, the borrower completes a loan
application and authorizes the lender to check their credit rating,
proof of income, and any other relevant documents and history.
Both parties are briefed on exactly what the loan entails so that
there’s no confusion as to the terms and conditions of the loan.
Good Faith Estimates and Truth in Lending statements are given
to the borrower by the lender. These docs explain all the
costs, fees, rates, and financials of the loan in minute detail.
15. 12
• Processing: Once the loan application is completed, it’s
submitted to a loan processor. A credit report is ordered and the
collateral property is appraised. The loan processor makes sure
that all documents are submitted and accurate. Verification of
employment status, income, assets, and any outstanding debts
is conducted.
• Underwriting: The underwriter will then assess the risk of
the loan. In mortgage underwriting, loan review is based on
the borrower’s finances, employment, income and credit. The
collateral property is also reviewed. The ‘package’ is found
either to be acceptable for a loan, or it’s rejected.
• Approval: Upon approval, the lender sends the borrower
a Commitment Letter. All terms and conditions are outlined,
and the clock begins. Acceptance of the offer to fund requires
signatures, proof of hazard insurance, payoff demands from
creditors, tax information, and escrow contacts.
• Closing: Time to fund. The closing process involves an escrow
agent, the borrower, and the lender. Numbers and monies are
checked and double checked. After review, the borrower signs
the loan. The lender sends the loan documents to the escrow
agent, and finally, transfer of funds to the seller of the property.
16. 13
Short Term
HIGH INTEREST
FINANCE
Investing in real estate was once quite difficult. One needed
money, intricate knowledge of markets and developments, and
financial savvy to make great returns.
In today’s world, there are multiple programs and vehicles
designed to appeal to an individual investor’s tastes and
preferences…
Low risk, high risk, stabilized properties, distressed assets, short
term – medium term – long term financing, bridge loans, the
list goes on. And unlike in the past, you can now invest and get
involved without any specialized knowledge or specialized skills.
What you do need is liquidity. With liquidity, you tee yourself up
for great returns.
If you’re looking to get into the short term, high interest finance
field with real estate as your main focus, then private hard
money lending is a superb opportunity for you.
You heard right – all you really need as an investor is available
capital and the right team to make it possible…and a smashing
success.
You have 2 choices as an investor and capital provider…
1. Spend years learning how to flip, manage, landlord, buy,
sell, and rehab properties…
OR…
17. 14
2. Find a well-structured, well-managed private money fund to
invest in. Merge your capital with your fund manager’s real
estate expertise to create lucrative returns and cashflow.
TIP: When vetting a fund and a fund manager, ask the hard
questions.
• How does the fund operate?
• What types of properties do they invest in?
• What are their underwriting guidelines?
• How do they manage risk?
• What kind of returns do you get on your investment capital?
An experienced, disciplined fund manager will have the answers to
all these questions. What he or she has to say should make you feel
safe and confident in their ability to wisely steward your investment.
Be wary of an inexperienced and impulsive fund manager. Though
the deal and opportunity they present may look ‘hot,’ the results
of funding it could be disastrous. Again, ask the hard questions.
Poor deals, weak underwriting, sloppiness, and failed processes
are common pitfalls awaiting eager investors who fail to partner
with the right person or company.
With experienced fund managers, you quickly learn what works
and what doesn’t…what’s acceptable, and what isn’t.
The expertise and foresight of an experienced fund manager
can ensure that the deal makes financial sense, and that risk is
structured away from you, the investor.
In addition to gaining great returns on investment, you get
to witness how the process works from start to finish. This is
invaluable to your investing and wealth building career. With
this kind of knowledge, you’re far less likely to make
those common mistakes that all too frequently cripple the
inexperienced investor.
18. 15
SAFER INVESTING IN
REAL ESTATE TODAY
It’s absolutely true that investing in real estate is far safer
than other investment options, especially when you have an
experienced team of professionals in your corner. I’ll say this
again because it’s worth repeating:
Real estate is considered safer because the investor and fund
manager can manage the risk, secure the investment, and insure
the asset…
Premium benefits and safeguards you don’t get anywhere else.
TOP NOTCH PAPERWORK
The hard money fund management handles all of the paperwork
during the real estate transaction. Management employs strict
controls to ensure your investment is as safe as possible.
To illustrate, let’s say the borrower–a rehabber on a great
investment property you loaned on–misses a payment. The
fund manager gives notice to the borrower to cure the missed
payment (plus any late fees) in a timely manner.
If that doesn’t happen, then the fund manager has the option to
foreclose and take over ownership of the property. The fund can
now sell the property to recapture the full capital deployed plus
all interest earned.
19. 16
DELEGATING DUE DILIGENCE
The real work begins once a fund management team identifies a
property with potential.
To ensure secured returns on investment, teams of tradesmen,
electricians and plumbers investigate the property for potential
problems.
Next, a certified local appraiser is brought onboard…one who
knows the area, the local market, and the community. This
ensures that an accurate property value is established.
By knowing exactly what the AS IS current market value of the
property is, the fund manager knows the exact amount of money
he or she will lend to the borrower.
Any good fund manager knows that if a property doesn’t have
a superb profit margin, they’ll pass on funding the deal. Better
to play it safe and search for better deals than to step into
something “iffy.”
EXCELLENT CASH FLOW AND ROI
The bottom line is ultimately what matters. When done correctly,
a hard money loan yields an excellent return on investment, or
ROI. You receive regular cash flow each month, starting from the
first month.
Returns depend on many variables. Good fund managers
understand how to choose the appropriate lending criteria.
The criteria are based on the type of property, location, the
environment, the degree of risk, and the terms of contract.
Analyzing each component of the deal is vital to securing the
best ROI.
20. 17
Once the rehab is complete, the property’s value and equity
naturally increase. The borrower is then able to sell the property
at a much higher price point than what he paid for it (the loan on
which you invested).
The beauty of a hard money loan is that your capital is returned
to you, along with profits and interest, in a very short time.
The best private hard money funds choose experienced
rehabbers who can find, analyze, buy, rehab, and sell a property
for profit in less than a year.
This is a fantastic way to grow your capital quickly. You get your
investment returned plus interest…and then you re-deploy into
another loan.
You also have the ability to invest in increasingly higher-level
real estate loans. With prudence and patience, you can build
an investment pool that’s constantly growing, returning higher
margins and higher profits year after year.
If you’re new to private money lending, it’s easy to get started.
All you need to do is choose a savvy, experienced, and
trustworthy fund manager.
21. 18
Why People Need
HARD MONEY:
COMMUNITY BUILDING
There’s no doubt that enterprising individuals who need hard
money do good for their communities. That’s why this type
of investment model is referred to as ‘socially responsible
investing,’ as it serves the needs of the immediate community.
Rehabs improve communities…and in turn increase property
values. And that in turn attracts commerce, solid citizens, new
markets, jobs, and opportunity.
So if you’re an investor who has the capital but lacks real estate
experience, find an expert fund manager to guide you into the
arena.
With the right fund manager by your side, you can instantly
enjoy the fruitful rewards of of the highly lucrative real estate
market…both in community service and profitability.
22. 19
Making The Yield:
THE GOAL IN BUSINESS
The main goal in business and investing is to make money from
money.
If an investor fails to put their money to work to turn a profit,
there’s no wealth generation.
See, the single most common problem is that most folks lack
investing experience and knowledge. However, an experienced
fund management team can provide you with all the tools and
pre-built proven systems to attain the holy grail of investing:
A fast, low risk way of getting into the real estate game!
And when that fund is capable of investing and RE-INVESTING
your capital in deal after deal on a consistent basis, you literally
create a hard money real estate loan machine that generates
cash faster than any other conventional investment.
There’s nothing more compelling and exciting than cash
flow. When you’re invested in the right fund, you have the
opportunity to create lucrative revenue streams in record time.
So, what does it mean to ‘Make the Yield?’
Investing in its purest form is about earning interest from your
money. With enough time and the right investment, there’s no
limit to the amount of money you can generate or amount of
wealth you can create.
Too many real estate investors go belly up because they don’t
have the equity to cover the debt they’ve generated should a
crisis occurs.
23. 20
Luckily, experienced managers are able to ‘structure away the
risk’ through due diligence and holding rehabbers responsible
for their end of the deal by imposing recourse (including fines),
loan caveats and conditions, and, if necessary, refinancing of the
property.
With the right fund, you’re positioned to generate sizeable
yields year after year…
…Simply by cycling your capital through hard money loans
and receiving interest and profits every step of the way. Few
investments these days can claim to be so low risk, stable, and
lucrative.
24. 21
Why is this a
MAJOR OPPORTUNITY?
Investing in the right private hard money fund is a MAJOR
investment opportunity. Why? Because a deliberate long term
real estate investment strategy is the most direct path to wealth.
While a majority of investors throw thousands away speculating
on useless, unstable stocks and bonds, or choose to place their
faith in ever-changing 401K plans…
You now have the knowledge to do something different.
There’s no easier, simpler, and quicker way to get started
investing in real estate than with a private hard money fund.
The ROI generated by buying, rehabbing, and selling real estate
is unmatched. And private money lending opens up a whole
new world of investing.
It’s not uncommon for our clients to deploy their capital time
and again, deal after deal. Our time-tested and proven system
for vetting properties and borrowers ensures stability and instills
confidence in our clients.
To find out if you’re qualified to become an investor or private
lender in any one of our deals or projects, please contact us at...
Mountain View Capital Investments
Telephone: 505.404.1131
Email: robb@MountainViewCapitalinvestments.com
You can also visit our website at
http://MountainViewCapitalinvestments.com
Call now to book a complimentary consult and find out
how you can get involved.
25. THE
HANDBOOK
PRIVATE
LENDER'S
FINALLY! EVERYTHING YOU NEED TO KNOW TO BECOME A REMARKABLY SUCCESSFUL HARD
MONEY LENDER IN REAL ESTATE – BY AN ACKNOWLEDGED LEADER IN THE FIELD.
Are you fed up with the unstable, unreliable financial markets?
Are you frustrated with the poor returns from your stock portfolio?
Are you looking for a simple and easy way to get started investing in real estate?
Then take just a few minutes and see how you can invest in secured, high profit, low risk real estate…
without ever having to buy, sell, manage, landlord, or rehab a single property.
In straightforward, no-nonsense, pull no punches language, Robb Krautbauer tells you everything
you need to know about how to get started investing in a Private Hard Money Real Estate Fund.
You’ll discover the unparalleled benefits of investing in a private money fund, how hard money works,
how to choose the fund that’s right for you, how to qualify properties, how to vet borrowers, how to
loan process works, and how to collect paychecks month after month.
With the author’s expert step-by-step guidance, you’ll have all the tools you need to confidently select a pri-
vate hard money real estate fund that’s right for you…so you can pave the road to a life of true wealth creation.
Disclaimer: This handbook is being provided for educational purposes only. Any investment comes
with inherent risk. The reader takes full responsibility for their investment decisions. It’s up to the
reader, consumer, or investor to do their own due diligence prior to selecting any investment vehicle
or entrusting their capital with any individual, fund, company, or entity.
ROBB KRAUTBAUER
MOUNTAINVIEWCAPITALINVESTMENTS.COM
