Texas Home Notes, LLC is an investment Fund (the Fund). The Fund lends money on Trust Deeds* to Gem Rentals LLC, The Loans are for five years, paying 8% interest only. It is the goal of the Fund to pay investors an interest rate return of between 7% and 8%.
Funds will also be lent to other real estate investors as hard money loans at rates as high as 13%, secured with short term, first lien, real estate notes. To keep idle money working until needed for longer term loans.
Investors will be given two options to invest in the Fund. Investors can choose to invest in the Texas Home Notes, LLC ‘s lending Fund, or as Private Lenders in individual property liens.
Option 1: The Fund: Investing in the Fund’s lending pool, funds are grouped together in one account. Each investor owns a percentage of the Fund based on their contribution percentage. Mortgages (Trust Deeds) are held in the Fund’s name, Interest earned is paid to the Fund and distributed quarterly to investors. (Accredited investors only)
Option 2: Private Lender: Investing in individual mortgages, the investor will deposit funds into escrow at the title company. Mortgages are held in the investors name. Interest is paid directly to the investor. The amount invested varies with the mortgage amount. Typically $40,000 to $75,000 per transaction.
If an investor does not qualify as a accredited investor they more then likely will qualify as a Private Lender.
The Investment Fund
Each investment unit will be in increments of $5,000. The fund will raise $2,000,000.
The Fund is for a minimum term of five years or a maximum term of 10 years at which time the Funds assets are to be sold and the proceeds distributed as per the terms of the funds origination charter.
At the end of the fifth year from when the investor made their investment The borrower will pay off the loan and the capital acct of the investor will be returned. The investor may be given an opportunity to make the same or a similar investment at that time.
The use of Trust Deeds and conservative loan to values is to protect our investors capital against principal loss as much as possible.
Typical Loan To Gem Rental LLC.
Gem Rentals, LLC Buys a House in need of some TLC, They make repairs, do some remodeling and updating. They rent the house or sell it on a owner carry note.
Actual example: House on Contour drive Spring Branch, Texas, Three bedroom, two bath house, 1865 square feet, in need of remodeling and updating.
- Purchase price: $39,000
- Acquisition cost and closing cost $2,500
- Remodel cost $25,000
- Total Cost $66,500
- Rent $ 900 a month
- Value based on comps, and rent $98,000
- Loan from investor Fund $58,000 (Loan to Value 59%)
- Payments interest only 8% $ 373 a month
- Tax & Insurance $ 232 (escrow)
- Total monthly payment $ 605 a month
The loan to Gem Rentals LLC is secured by a first lien note on the real estate. The loan is at 8% interest for five years. At the end of five years the loan is re-financed or the property is sold. Loan is serviced by a third party loan service company, loan service fees are paid by the borrower.
Typical Hard Money Loan
Texas Home Notes, LLC (The Fund) Lends money to Real Estate investors IE: Flippers to keep any idle funds busy short term, until the funds are needed to finance an owner carry deal. The loan rates are at 12% to 15%, short term loans. Secured by first liens on the property.
Actual example:House on Fox Run San Antonio, Texas, Three bedroom, two bath house, 1735 square feet, in need of remodeling. The Real Estate Investor (flipper) buys the house for $75,000 and needs a loan of $25,000 to rehab the home. The loan is structured as follows.
Loan Amount $25,000
Loan fee 3% $ 750 (Paid to Gem Rentals for securing the deal)
Interest rate 13% (Six months term)
Renewals (60 day extensions) are at 15% interest,
Exit fee 2% of the loan amount $ 500 (Paid to Gem Rentals for administration fee)
Interest paid to the lending pool during six month term $3,250.00 13% interest.
Loan to Value: The total cost of the project including our loan to the flipper, based on the estimated sales price of the finished project cannot be more the 75% (loan to value).
The Fund will be managed under an operating agreement between the Texas Home Notes, LLC and Gem Rentals LLC which is owned and managed by James E. Glasgow Sr.
James E. Glasgow Sr. is 67 years old. He has 32 years of real estate investing experience and 45 years of management experience. Mr. Glasgow is an experienced business owner having owned his own businesses for 28 years. Mr. Glasgow started investing in real estate in 1982. He has invested in single family homes, apartments, office buildings, raw land and mortgages. He is the Author of two books on real estate “How I Made Millions in Real Estate and How You Can Too” as well as”Real Estate Syndication a how to manual”.
Having sold his other businesses in 2014, Mr. Glasgow is now a full time real estate investor. He owns and operates Gem Rentals LLC. Mr. Glasgow is a Texas licensed real estate agent.
Gem Rentals LLC The Borrower
Gem Rentals, LLC was formed in January 2010 to invest in distressed properties that require rehabbing for resale or rental. We invest in single family properties in San Antonio area and surrounding counties. Gem Rentals, LLC is solely owned and managed by James E. Glasgow Sr. Gem Rentals, LLC is located in San Antonio, Texas 78218
Gem Rentals, LLC. purchases residential real estate in San Antonio, Texas and neighboring Counties. We target properties that can be acquired at 70% or less of the current fair market value after repairs. These properties generally need moderate renovations and updating to go into the retail, owner finance, or rental market. The resale value of the properties after repair ranges from $75,000 to $150,000. While our main objective is to make a minimum of 15% to 30% profit based on the After Repair Fair Market Value on each deal, we are also aware of our responsibility to the communities we do business in, and our role in the betterment of these communities. Therefore, we always make every effort to provide products that are of good quality and will improve the neighborhood.
Our most profitable business strategy is to sell the homes on owner carry mortgages at 10% or higher interest. To this end we are raising money to fund these owner carry notes. This strategy has allowed us to pay our investors 8% interest returns consistently for more then twenty years.
There is a huge supply of older homes in blue collar neighborhoods where the house need a little work and the sellers do not have the money to get the home to market ready status. These are the houses we buy.
In doing so we help our investors earn 8% returns, we help people live the American dream, we help neighborhoods by improving one house at a time, we help owners who need to sell, we recycle houses and that is about as green as you can get. We help the economy, create jobs and improve the tax base while giving people a chance at a better standard of living. And we make a profit too.
Make the Call
This investment summery is provided as an Exhibit to the Private Placement Memorandum, under which this investment opportunity will be offered to qualified investors. This is a limited time offer. Investors will be accepted into this offering on a first come, first served basis. Investors who wish to explore this investment opportunity after reviewing this Investment Summery, should contact the Manger at 210-413-7230 firstname.lastname@example.org to request the Private Placement Memorandum.
Disclaimer: Certain statements contained herein are forward looking statements, which reflect numerous assumptions and estimates and involve a number of risks and uncertainties. There are possible developments that could cause our actual results to differ materially from those forecasted or implied in the forward looking statements. This information shall not constitute an offer to sell or a solicitation of an offer to buy securities, nor shall there be any sale of securities in any state in which such offer, solicitation or sale would be unlawful prior to registration, qualification or applicable exemption under applicable federal and state securities law.
* A Trust Deed Investment consist of a Promissory Note secured by a Deed of Trust recorded on real property. The Borrower executes the Promissory Note payable to the Investor with the intent to pay the Investor a certain interest rate, plus repay the principal amount within a time frame specified in the note.
Texas Home Notes LLC is recorded as lien holder on the property holding the liens for the investors accounts. In the event the borrower defaults on their loan obligation they will lose the property through foreclosure. As a lien holder to the property Via Texas Home Notes LLC you are investing in a collateralized real estate investment, with a moderate risk factor.