Frequently Asked Questions
How long is the typical loan, and how much do I need to invest?
Our typical deals range from $30,000 – $50,000 and each loan is amortized over 60 months. When you get your money and interest back at the end of 60 months, you will sign a Certificate of Satisfaction to clear your lien against the title. There is NO prepayment penalty to the lender. If we pay off the loan early (even if we have it only 1 month!), we still pay the full 12%/60 month interest amount.
Why are we willing to pay such high returns?
The availability of short-term capital is more important than the cost. We need to move quickly to purchase from sellers willing to sell their homes for deep discounts in exchange for peace of mind or debt relief. Due to the lengthy process, we don’t have time to go through banks. Also, since we’re buying properties with large amounts of equity, it allows us to give you a portion of our profits by repaying the original loan amount plus a generous interest rate. However, please note that your cash is committed once invested. It’s not as simple as selling your stock where your cash is returned next month, but that is why and how we can pay 12% interest on your investment.
How is the private lender protected when they lend money?
There are 4 key items that secure your investment each time you lend:
– An insurance policy will be in place for your protection in case of an unexpected catastrophe or problem. Also, since there is a large hedge factor in the amount of funds that you lend versus the equity in the property, even if we were captured by aliens, you can sell the property and make more than you’d make off the interest.
-A promissory note will state the exact fixed return that you will receive. Whatever terms we agree upon, the note will spell out those terms verbatim.
-A deed of trust will be created by the title company to put the property as collateral for your loan. That means you will have a lien on the property and we can’t sell it without paying you off as agreed.
-A title insurance policy will protect you against any title issues or claims that may arise.
Who handles all of the paperwork?
The title company or attorney will handle all of the paperwork. You will send your funds directly to their office and make everything payable to them. The closing agent will not disperse any funds until all of the documents that secure your investment are in place and signed off. They will create a promissory note that states the terms of your loan, the mortgage instrument that gives you collateral, and the title insurance policy. We will also send you a copy of the Insurance Policy.
How do I get started?
Just contact us and tell us when you’re ready! We’ll give you a call to learn your goals and the amount you have available to lend. We will then go out and find a property that makes sense and matches your needs. When we do, you’ll arrange for the funds to be sent to the attorney or title company. A closing will be set up at the title company office and you can sit back and watch your investment grow. You’ll get fixed returns that never change and that are safely secured by real estate.
What are the risks?
The buyer doesn’t make his/her payment or abandons the home? VSS Spectrum Properties pays the loan, not the buyer. Eviction proceedings begin 15 days after the missed payment. We require a $3,000 to $5,000 down payment. This money is saved for situations such as this. The house will be resold and another down payment will be received from the new buyer.
What if something happens to the owners of VSS Spectrum Properties, such as an alien abduction and nobody is around to make the payment? There is a team of people people working at VSS Spectrum Properties. The aliens would have to get us all! Even if they did, and the property is actively filled, the buyers’ payments would go to you, the lender for 25 to 30 years! If the buyer vacates the property, then you can sell it at a much higher value than the outstanding loan amount. Remember, the buyers are renovating their homes. It will be worth much more than the original purchase price.
What if the home gets destroyed in a fire? An insurance policy will be in place for your protection in case of an unexpected catastrophe or problem.
How do I know this isn’t a scam? You can call the attorney or title company prior to sending your payment. Remember, you do not ever send money directly to VSS Spectrum Properties. You send it to the lawyer or title company.
Can I use my 401k or IRA to lend from?
Absolutely! That is what many investors do! You must be in control of where your investments go from your 401k or IRA, and you can take any 401k or IRA that you own and roll it over into a self-directed IRA. There is no penalty for doing this because you are not taking a distribution, you are simply changing the Administrator to one that allows you to self-direct where the funds go. Doing it this way, you can make all your gains tax deferred without counting on someone else to get you 12% fixed returns day in and day out. Any Self Directed IRA company will work. The company we, and most people, use is Equity Trust Company. You can get a FREE information packet via their website www.trustetc.com to learn how easy it is to do. You simply fill out a form and send them your last statement. They do the rest and transfer your funds to your new account. The entire process only takes about 2 weeks.
How do I get paid?
He who has the gold makes the rules. How do you want to get paid? Check? Cash? Zelle? Cash App? Pay Pal? ACH? Whatever method works best for you.
What tax benefits do I get as a lender?
To put it simply, none. You will have to pay tax on any income. However, if you are using a self-directed IRA, then that income will be tax deferred as you will be required to make those payments to replenish your IRA.
Do you pay a referral fee?
If you introduce us to another investor who invests at least $30,000 you will receive a $500 referral fee. Be sure to talk to all of your friends, family, relatives, neighbors, and business associates to let them know about this excellent investment strategy. You’ll be surprised how happy they will be that you shared this opportunity with them.