CWI Landholdings, LLC acquires and sells residential properties for a profit. These properties are located in the New York Hudson Valley and surrounding areas.
In order to buy and rehab properties, we often borrow money from individuals, rather than banks, because of the speed in which we can get the money to the closing table.
Our current Private Lending Program is very much designed to protect the interests of all of our lenders. Our business model, and the sustainability of it, depends on a continuous cycle of borrowing money from our investors for every project. Our Private Lenders are treated like gold and receive a great rate of return on their investment dollars. That in turn keeps them coming back to us project after project.
The Basics:
We have a list of private lenders who have verbally committed their funds for our projects. We are always looking for properties that meet our search criteria; when we find one that makes sense for us, we get it under contract. We calculate what the house will sell for after repaired (based on real comps and what repairs will cost) and use those numbers to determine the amount of capital needed per project. From there, we go down our lender list and ask each lender if they want in or out on the next project and if so, how much they wish to invest, continuing down the list until the capital requirements have been met. The funds are sent to our real estate attorney for placement into the escrow account just before the purchase closing. Then at the time of closing, all legal documents prepared by attorneys are signed and the project begins. Once the project has been rehabbed and sold, the principal and interest is returned to each lender on the project. The average length of project and the loan is 6 months.
Program Details:
We have a Private Placement Memorandum (PPM), which is a large legal document similar to a prospectus/disclosure statement, in place that allows us to legally borrow money from entities and individuals. We are able to do this in exchange for giving the investors a promissory note and naming them on a recorded mortgage securing the investors’ investment with the actual house that we are buying. This creates a secured investment for our lenders, meaning that their investment is backed by something of value. This legal framework requires that we have filed the appropriate paperwork with the State of New York Attorney General and the Securities and Exchange Commission (SEC). A copy of the PPM is given to every investor. The CWI program closely mirrors that of a typical agreement between a bank offering a home mortgage and a homebuyer. Every investor gets his or her own promissory note describing the loan amount and interest rate to be paid. If one investor is funding an entire project, his or her name is the only name on the recorded mortgage, naming the investor as a lien holder against the property. On projects where multiple investors are needed to reach the capital requirements, the PPM allows CWI to pool all the investors on the mortgage. Regarding the Loan-To-Value ratios, the amount of the loan never exceeds 70% of the ARV (After-Repaired Value) of the house. We use simple interest calculations to determine the investors’ return on their investment. The interest clock starts the day we purchase a project house and stops the day it is sold to the new homeowner. The current interest rate we are paying is 10-14%. Our current PPM allows for us to borrow sums of money from $5,000 to $5,000,000 for these investments.
Program Safeguards:
• The SEC and the NYS Attorney General know who we are and what we are doing. There are many rules and regulations in place, intended to protect investors, and it is CWI’s intent to always be in compliance with those rules. We consult with 3 different attorneys to ensure this compliance.
• Every investor gets a promissory note detailing the amount of the loan and the interest rate at which the loan will be repaid.
• Every investor is named on a recorded mortgage naming him or her as a lienholder against our subject (project) property.
• Every investor is named on a title insurance policy and is also provided proof of a hazard/fire insurance policy, insuring their interest in the property.
• Every investor receives a copy of an after-repair appraisal and/or a before-repair appraisal of the property.
You Can Invest In A Property With Funds From Your IRA, and Your Returns Stay Tax-Deferred or Tax-Free
One of the most important lessons to learn is that you can self-direct your IRA (Traditional/Roth) or pension plan. Your returns stay tax-deferred or tax-free. And we do all the work. What happens is you can self-direct your money to CWI, and CWI returns the principal and interest to the Roth IRA. Some of our trusted partners offering self-directed Roth IRAs are:
- Quest IRA: www.questira.com
- American IRA: www.americanira.com
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For more information, call:
(845) 275-3300 or
(518) 689-6400
Thank you for your interest. We hope to hear from you soon.
This is not a public offering or offer or invitation to sell securities or make an investment. Securities may only be offered or sold in the state or states where they are registered or under an exempt offering.
