Investing with PhD Homes

Real estate is a very safe investment vehicle that produces a high rate of return while at the same time provides higher level of security and liquidity. As a real estate investor with us you can contribute funds to projects of your choice. These funds are private loans secured by a mortgage. Private loan investors, also called private lenders, are given a first or second mortgage that secures their legal interest in the property and secures their investment. Unlike the high Loan-To-Value (LTV) ratios the banks and loan institutions make on homes, we offer very low LTV ratios to our private lenders to increase the security of their loan. Our standard LTV ratios are under 75% of the value of the property securing the loan and frequently as low as 60% to 68%. This means additional security on your investment.

For example, if a property is valued at $100,000, our private lenders will never have to loan more than $75,000 dollars on the property. That’s a 75% loan-to-value ratio leaving enough equity for unforeseen costs or in the event of a market downturn. As a lender, it is in your best interest to minimize risk and maximize return and this is why a loan should never be made without a 25% safety net. We don’t violate this rule, because your security is at stake.

If you are interested in investing with us check out some of our completed and upcoming projects. This will give you an insight into the type of projects we do as real estate developers. Contact us to schedule a call if you need more information about any particular project, loan structures or just to come visit some of our sites. 

Frequently Asked Questions

Who borrows at high rates and why?

Investors like us do, because we have learned in our business that it’s not the cost of money that matters, but quick access to the funds so we can capitalize on opportunities. Our company can acquire good deals in properties because we can act with lightning speed and can close with cash. Private loans give us this competitive advantage over other investors who take weeks to go through the bank approval process in order to purchase properties. Additionally, if a real estate investor locates a good deal on a property, many times the bank wants to loan on the purchase price not the value of the house, thus penalizing the investor for finding a great deal. Having access to money is generally a deciding factor in investing in real estate, so paying a higher interest rate is irrelevant when compared with the risk of losing the deal.

What’s the minimum investment?

The minimum investment is $25,000.

Who handles all of the details?

We will. It’s our job to get you proper documentation and protect your interest and it costs you nothing. The borrower pays all costs and you pay no fees. If you make a $100,000 loan, you send a check for $100,000 to the closing attorney and you get a mortgage for $100,000.

How do I get paid?

We will set up your account and you will be sent monthly updates about every property you are invested in. Upon the completion of the project you will receive a one time, principle plus interest payment.

Is this a long-term investment?

Generally, your investment is tied to a specific project with a timeline ranging from 3 to 18 months. We have lending programs for short term holds of three to six months. We also have longer term holds of one year and longer. You can pick a term that suits your strategy. It’s your money and it’s your choice.

What if I need to liquidate?

If you want out, a 45 day written notice is required, because we will need to replace your funds with another investor’s money. You really shouldn’t make mortgage loans if you feel you will liquidate this shortly, but the option is always available and we have been able to liquidate in as little as two weeks in some scenarios. Also, unlike with a bank CD, there is no penalty for early withdrawal. Just call us at 617-420-2274, and we will handle all of the details.

Is my investment really as safe as it sounds?

Yes! Your money will grow two, three, or even four times faster than your current investments and you maintain control. Each one of our properties that we acquire is put through a rigorous financial evaluation in order to evaluate the profitability before the property is ever purchased. Remember that making loans is a business and should be treated like a business. If you set up a simple system and let the professionals implement the system, your loan portfolio can be hassle free and produce staggering yields.

How do I use my IRA’s or pension plan?

Making real estate loans is a widely accepted use for IRA’s and other Retirement Plans. Most people do not know that you can make private mortgage loans using the funds which are already in your IRA’s and other retirement plans. Think of the power of loaning out funds at high interest rates that are Tax free or Tax Deferred! In order for you to use retirement accounts for loans they must first be administered by a third party custodian.  After selecting your custodian, you simply send a transfer form to them and they’ll do all of the work for you. Once you’ve done that you are ready to make private mortgage loans. From there, you simply notify your custodian about the investment you are looking to make and send the check for the gross amount of the loan. Even better, we can do all the work for you and you just sign few documents, sit back, relax and wait for your money to grow tax free or deferred.

What are my options if PhD Homes doesn’t pay?

There are several options but first and foremost, please be aware that “Integrity” is an essential part of our business and we only make sound investment decisions. One of PhD Homes, LLC’s distinguishing features is that we have never been late on a payment to a private lender. Additionally, our company’s policy is to invest our own funds into every one of our projects because if we aren’t confident in our investment decisions why should you be? Likewise, if we ever lose the support of investors, we can no longer operate our business and our own investments would be at stake.

However, to answer the question:

  1. We could restructure the payment schedule on the note. For example, let’s say we are behind on payments to you. Now PhD Homes, LLC can and would like to keep the house, but they can’t come up with enough money to bring you current in one lump sum. You could let us continue to make regular payments and make an extra payment on our arrearage in addition, or you could simply add the arrearage to the principal balance and extend the term of the loan. This means you would be collecting interest on interest for the entire remainder of the loan. There are always ways to work it out if both sides are willing.
  2. Have PhD Homes, LLC deed you the house. This is an opportunity for you to get a house at a greatly discounted price. When this happens, you can create tremendous profit by reselling the house.
  3. If left with no other choice, you can simply foreclose. Foreclosure isn’t as time consuming and costly of a process as most people think. It’s as simple as sending your note and mortgage to an attorney and saying ‘foreclose’. All you have to do then is sit back and wait. Nine times out of ten, before foreclosure is complete, someone will be calling your attorney’s office with a payoff letter, and your loan will get paid off. When this happens, you will collect all accrued interest, your principal balance, and all attorneys’ fees, court costs, and all other expenses you have incurred in connection with your loan. If you wind up with the house that doesn’t mean you have to keep it. It can be sold immediately at a fair sale price and still produce a profit over and above the already high yield on your loan.

What kind of documents should I as the lender receive?

Your closing package should contain the following:

  1. A copy of the mortgage. The original will be recorded.
  2. An original Promissory Note.
  3. A hazard insurance endorsement naming you as mortgagee.

These documents provide you with the security you need. If this appeals to you or if you have any more questions, please do not hesitate to call us at 617 420 2274, email us at or fill out the form on our Contact Us page.