Invest in Success: Partner with
PV Dallas Real Investments for Your Real Estate Ventures
Alternative assets like private real estate have historically offered a unique combination of lower volatility than stocks and higher potential returns than bonds. This mixture can anchor your portfolio, smoothing out the wild ups and downs of the public markets.
Lending for an 8 or 30 Year Term?
How long to commit your funds to an investment is an important decision.
​
Initially, some private money lenders are hesitant to lend for 30 years, but looking at statistics on home ownership and refinancing, AND the financial benefit of lending longer term, most reconsider and lend for 30 years.
​
According to Redfin, the average homeowner is staying in their home for 13 years, up from a 10-year average in 2010. But in many cases, especially with higher priced owner financed loans, the home buyer will refinance even sooner. Therefore, there is a very good chance that your loan will not be in repayment for the full 30 years.
​
​
Let’s look at the math with 2 Scenarios:
​
$150,000, 30-year Loan, at 8%, borrower refinances in 13 years and pays off loan
Monthly principal and interest payments of $1,100.65
Loan balance after 156 payments (13 Years) = $122,530.69
$144,232.09 in Interest received by the lender in 13 years.
$150,000 loan for 13 years at 8%
Monthly principal and interest payments of $1,549.61
Loan Balance after 156 payments is zero.
$91,739.47 in Interest received by lender in 13 years.
​
One can see from the above example that the lender receives significantly more interest in 13 years with a 30-year loan in compassion to a 13-year loan with the same interest rate.
The term of the loan can be any length that both the lender and the borrower find reasonable.
It is important to know that Promissory Notes are assets just like houses, stocks, and bonds in that they can be transferred, inherited, and sold.
​