Looking for a safer alterative to stocks and other traditional forms of investing? Would you be interested in earning a consistent return of 8%-10% on your investments or retirement? Would you be interested in learning how to do this without the risk of stocks or high risk bonds? If so read on… and learn more about private lending.

Private lending is a loan originating from a private individual, in simplest terms; you become the bank on a transaction to purchase real estate. You would be lending money in the form of a mortgage secured by real estate to Noster Villa, Inc., a local real estate investment company.

Security? Our company doesn’t actually receive the funds that you would lend to us. The required loan amount would be transferred (wired) directly to a title company at closing and used to pay the seller at closing. You will then have a promissory note/mortgage which is a lien on the property for which the money was borrowed. The mortgage is then recorded with the county in conjunction with the purchased property. You, as a private lender, would have all the rights and abilities that a bank would have in your position.

Key points on security:

• Your investment is backed by real property.
• The loan amount is in the form of a mortgage and constitutes a lien on the property; this loan must be paid in full at the time of a sell, in order for the property to pass through a closing.
• The property is insured for hazard and fire.
• You can require private mortgage insurance which pays off the loan in the event of our death or bankruptcy.
• You can foreclose on the loan in the event of our default on the loan at which time you would take possession of a property that had improvements made to it and would be worth far more then the loan amount.
• The mortgage is recorded with the county and is shown as a lien on our property.
• All of the above listed rights are part of state and county law and are enforceable in court.

• Our company was formed to purchase foreclosure properties which are for sale by the banks at below-market value; the loan amount will be at a level that is normally 20-30% below the tax accessed value of the property and 50% below the value of the remodeled property. This gives you added protection and security knowing that the property is worth much more than your loan amount.

I know of few other investments that give you this kind of control and security over your investment.

Where can the money come from? There are two ways to do this, taxable and non-taxable using retirement funds.

Taxable method: You can lend money from a personal or business checking account, money market account, or certificate of deposit (a CD would have to be cashed in or withdrawn from the CD and put into a regular banking account of your choosing).

Non-taxable method using retirement funds: You can lend money in a way that is non-taxable or tax deferred through the use of a self directed IRA (Individual retirement account). You can use this method if you currently have a self directed IRA or have funds that can be rolled over into a self directed IRA, things like: Old 401k’s, retirement plans from past jobs, IRA’s (traditional or Roth), these types of funds can be moved to a self directed-IRA and then you will have what is called “check book control” over your IRA. This allows you to invest in real estate, mortgage notes (what we are proposing) or other types of non- traditional investments. If you prefer to use retirement funds we can set up the self directed IRA for you.

What type of returns should you expect? We are offering an 8 to 10% APR return on your investment. This is the amount of interest you will receive per year on your money during the loan period. We normally will keep the property for one of three possible time periods, 3 months, 12 months or up to 30 years.

3 months – this time period would be your standard purchase, remodel and then sell.

12 months – this time period is mostly used for a lease with an option to purchase. The tenant leases the property for one year and then purchases the property and the mortgage (money you loaned) is then paid off in full. This time is sometimes needed to qualify a payer.

Up to a 30 year mortgage - this would be used when we sell a property on contract, long term leases and in the event we keep a property as a rental.

The average purchase price for the houses we buy is around $50,000. So we can use that as an example amount.

50,000 carried for 3 months at 10% APR is about $1250 in interest paid to you.

As proof, below is the first part of an amortization table for a loan with the above terms.

Monthly Payment = 438.79

Month Balance Principal Interest Payment Total Interest

1 49977.88 22.12 416.67 438.79 416.67

2 49955.58 22.3 416.48 877.57 833.15

3 49933.09 22.49 416.3 1316.36 1,249.45

50,000 carried for 12 months at 10% APR is about $5000, below is the 12 th month in the same table, the amount you would have received at the end of one year.

12 49722.06 24.23 414.55 5265.43 4,987.49

50,000 carried for 360 months (30 years) at 10% APR is about $108,000 + your original 50k returned, below is the 360 th month in the same table, the amount you would have received at the end of thirty years.

360 0 435.16 3.63 157962.88 107,962.88

Reinvestment of the profits from the first loan to accelerate the growth. As you can see after one year you have enough to loan the 10% down on the purchase of another $50,000 house. You decide to loan us that amount, but on a 10 year note, total of 120 payments of $66.08 and you would make $3000 during that time.

120 0 65.53 0.55 7929.04 2,929.04

But during this 10 year time you haven’t loaned any more money, so you have accumulated 43,135.81 in interest from the original loan + your new interest from the second loan of 2929.04 for a new total of 46,064.85. This is enough to be the private lender on a new property!

The point of these examples is to show that your money can grow as fast as you want it to. You can invest the interest paid from the loan in different investments until you have enough to be the lender on a full property again or part of a property. Or you can use the interest coming off the loan to lend a down payment amount every year if you like. This would keep your money growing at 10% APR for as long as you want to do it.

Below you can see an example of the three different loan periods compared to a CD earning around 3% which barely keeps up with inflation. Then take into account taxes on your interest gained and you could actually be loosing money in a CD or other low yielding investment.

If you are interested in participating in our private lending program, please contact us to discuss this in further detail. We would be more then happy to sit down with you and answer any questions you may have.

You can contact us at jared@nostervilla.com or call at 765-742-3400.