307 E. Northern Lights Blvd.
Anchorage, AK 99503
THE OPPORTUNITY: Six First Mortgages (2 are already reserved) for $88,000 earning 6% interest and payable through a collection escrow at First Mortgage, Inc. in 12 monthly payments of $440 and then 180 payments of $742.59.
Because the Borrower and the home purchaser will always have a minimum 41% Protective Equity(See definition below) that is subordinate to the First Mortgage, the investment risk for the Lender is very low.
To become a Lender, go to the "How To Invest" section of this website. You may invest individually, through your company or a self directed retirement plan.
THE BORROWER: The Borrower is Cozy Affordable Homes, LLC, an Alaska Limited Liability Company. It's members and their principals are:
Government statistics for the Matanuska Susitna Valley show that the median income for a two person household is $68,600 and 85% of median income is $58,310. Therefore the 30% for housing is $1,457 per month (30% x $58,310/12). With an allowance of $200 for taxes & insurance, $80 for condo dues, the government estimate of $162 for utilities, the maximum mortgage payment is $1015. ($1,457 - $200 - $80 -$162 = $1,015). Through use of creative financing, the initial mortgage payments for a Herkimer Lake Cozy Home will be only $970.
THE COLLATERAL: The six homes will be developed as site condos with each home having a city sized lot, natural gas and a communal well and sewer system as shown on the following site plan:
Each Herkimer Lake Cozy Home will be a 1BR, 1Bath home containing 550 to 597square feet, with the following floor plan:
Below are actual photos of the first two cottages constructed.
While the floor plans for all 6 Homes will be similar, there will be 3 different exterior designs. The architect renderings of these designs are as follows:
More information on the Herkimer Lake Cozy Homes is contained in the Appraisal of a representative model. To see the Appraisal CLICK HERE
PROTECTIVE EQUITY: Protective Equity is the difference between the amount amount owed to the Borrower on Wrap Around Mortgages and the amount owed to the Mortgage Investor (Mortgage Protective Equity) or the difference between the value of the property and the amount owed to the Mortgage Investor (Total Protective Equity). The Protective Equity is the amount that would be lost by the Borrower and/or the owner in the event of a payment default. Therefore the greater the amount of Protective Equity, the less risk on the Mortgage Investment. Click Here to see the Protective Equity Analysis for this Mortgage Investment.
HOW TO INVEST: To learn how to invest in a 59% Loan to Value, First Mortgage paying 6% interest--CLICK HERE.
OTHER MORTGAGE INVESTMENTS: The following section describes other Mortgage Investment Opportunities offered by Cash Now Financial Corporation.
SELLER FINANCED MORTGAGES: The first category of Mortgage Investment is Seller Financed Mortgages. These are Mortgages created upon the sale of the property in which the Buyer makes a down payment to the Seller and pays the balance of the purchase price in accordance with the terms of a Promissory Note secured by a Deed of Trust against the property sold. Seller Financed Mortgages are always sold at a discount from the face amount. Therefore the Investor's yield is always higher than the interest rate stated in the Promissory Note. Since yield is calculated based upon the scheduled payout term of the Promissory Note, if there is an early payoff, there will be a higher yield.
DIRECT LOANS: The second category of Mortgage Investment is Direct Loans initiated by Cash Now as the lender or as agent for the lender. Because these are Direct Loans there is an opportunity for greater underwriting of the loan and because these are Direct Loans they are written to require larger late payment penalties. Therefore, all factors being equal, a Direct Loan is usually a more secure investment than a Seller Financed Mortgage with similar attributes.
Both categories of Mortgages are available in three investor options. All programs are subject to a minimum $50,000 first time investment. Repeat investors may make smaller additional investments after making the $50,000 first investment. The four investment options available are:
Whole Mortgages: With Whole Mortgages the Investor acquires full ownership and control of the Mortgage and as a result has full control and decision making authority on the Mortgage, but does not have the additional safety of a subordinated interest. On Whole Mortgages, the Investor is provided with a full offering package of information deemed relevant to an informed investment decision (Click: Our Services). For Mortgages smaller than needed for a $50,000 minimum investment, the first time investor will acquire a package of Whole Mortgages with an investment equal to or exceeding $50,000. This investment option is best suited to the experienced, well capitalized Investor who desires a substantial Mortgage Portfolio.
Preferred Partial Interests: With this investment, the Investor acquires the preferred right to receive 100% of all payments until the investment plus the stated yield has been received. The Seller of the Mortgage retains a subordinated interest, that remains subordinated to the return of the Investor's investment plus interest, even in the event of foreclosure and re-sale. In cases where Cash Now or its affiliates are Mortgage sellers, they retain the right to assume the Payor's obligation on the Mortgage by bringing it current and making the scheduled payments until the Investor receives the return of investment and interest thereon. Although the retention of a subordinated interest by the Seller does not guarantee the investment, if there is not sufficient value remaining upon foreclosure the Seller would have to lose 100% of its subordinated interest before the Investor would experience any loss. Under this program the Investor's Investment to Value Ratio (ITV) is always 60% or lower for improved properties and 40% or lower for land loans. This type of investment is better suited for the less experienced Investor with less tolerance for risk of principal loss.
Preferred Fractional Interests: In this form of investment, rather than receiving 100% of all payments, the Investor receives a stated percentage of all payments until the Investor has received a return of his investment and the agreed upon yield. In the event of foreclosure, the Investor receives a preferred return just like a Preferred Partial Interest. As with the Preferred Partial Interests, if the subordinated interest is retained by Cash Now, or one of its affiliates, the agreement provides for the right to assume the Payors obligation and make the agreed upon payments to the Investor. Under this program the Investor's Investment to Value Ratio (ITV) is always 50% or lower for improved properties and 35% or lower for land loans. As with the Preferred Partial Interests this investment is better suited to the less experienced Investor with a lower tolerance for risk.