Frequently Asked Questions

Exposure to Real Estate Without Ownership Burdens

One of the most significant benefits for investors is the ability to gain exposure to the real estate market without the complexities of direct property ownership. By funding private loans, investors can engage in profitable real estate projects while avoiding the operational challenges of property management, maintenance, and tenant relations. This arrangement allows for passive income through interest payments while strategically leveraging capital to support projects with strong appreciation potential.

Portfolio Diversification

Private lending enables investors to diversify their portfolios by allocating funds across various real estate ventures. This diversification mitigates risks associated with traditional investment strategies and provides a balanced approach to capital allocation. By investing in different projects, investors can enhance overall returns while maintaining a hands-off strategy.

Competitive Returns

The annual returns associated with private lending often exceed those of traditional investment vehicles. For example, annual terms set by the private lenders can typically range from 8%-12% annually*.

The availability of short-term capital is more critical to us than the cost. We need to act quickly to acquire properties from sellers willing to offer deep discounts in exchange for peace of mind or debt relief. This urgency prevents us from relying on the slow process of securing traditional financing through banks.

By acquiring properties with significant equity, we are able to repay your principal along with a generous interest rate. However, it's important to note that your investment is locked for the term of the project - typically amortized over five years. 

Absolutely! In fact, some of our capital partners choose to invest solely through their IRA or 401k. You simply need to have control over where your investments are directed. You can roll over any existing IRA or 401k into a self-directed IRA, which allows you to choose where to allocate your funds. There is no penalty for this rollover, as it’s not considered a distribution—you're just changing the account administrator to one that offers self-direction. This strategy also allows you to keep all gains tax-deferred. 

Private lending for real estate can often be a more stable and predictable option than the stock market. Unlike stocks, which are subject to significant volatility and market fluctuations, real estate loans are backed by tangible assets, offering a steady income stream through interest payments. Private real estate investments provide portfolio diversification as they are not generally highly correlated to the stock market. 

There are four key safeguards in place to protect your investment with each loan: 

1. Promissory Note: This document outlines the exact fixed return you will receive. The agreed-upon terms are clearly specified, ensuring transparency and accountability. 

2. Deed of Trust: A deed of trust, created by the title company, secures the property as collateral for your loan. This gives you a lien on the property, ensuring that it cannot be sold without paying off your loan first. 

3. Title Insurance: This policy protects you against any title-related issues or claims that could arise, providing an added layer of security. 

4. Insurance Policy: A comprehensive insurance policy is in place to protect you in the event of unexpected damages or other unforeseen issues. 

In addition, there is a significant margin of safety in the amount you lend relative to the property's equity. Even if something unexpected were to happen, you have the option to sell the property or manage it yourself, continuing to collect payments from the tenant buyer. 

What if the buyer misses a payment or abandons the home? 

Mallard Property Group ensures that loan payments to the lender are made without interruption. We require a $3,000-$4,000 down payment on each property sale, which is set aside to cover potential defaults. In the event of a default, the tenant buyer will be evicted, the property will be resold, and a new down payment will be collected from the new buyer.

What if the home gets destroyed in a fire? 

An insurance policy is in place to protect your investment in the event of an unexpected catastrophe, such as a fire or other unforeseen circumstances.

You make the rules! Whether you prefer payment via digital application, check, or ACH, we’re happy to accommodate whichever method is most convenient for you. 

We do not charge fees to our capital partners, and we do not profit from the properties until our lender is made whole. Our lenders are our priority and we are glad to put your returns first!