Monthly Paying High Yield First Position Mortgage Notes, short-term alternative that yields an impressive 8%.

[Errol M. Kofsky]

We have a new safe and secure product to share that is very exciting. It is a first position commercial mortgage note that offers a high rate of return starting immediately. The duration is typically 12 months. The interest rate is attractive at 8%. Here is an example. $100,000 invested today will earn 12 monthly payments of $666.67 of interest and a final payment that is the return of your principal, of $100,000, 365 days from the start date.
What is the catch? There isn’t any. You have a first position lien on the commercial property that cannot exceed 60% of the appraised fair market value. By being in first position you have priority over any other liens or claims on the property. The originating company has a second lien on the same property. They originated the deal, did all of the title searches including paying off any existing liens on the property, and had a professional fair market appraisal of the property completed. Your name will be recorded as the first lien holder, and we will provide you with a copy of the Title Policy on the property, or a First Position Letter, both of which will indicate that there are no other liens or claims ahead of you. We will also provide you a copy of the appraisal.
Why would the second lien holder do this? The second position lien holder manages the entire process by collecting the monthly payments from the borrower, and then disburses them to you on the first of every month. If the borrower is late on his payment, you will still be paid on time for both interest and principal. The contract has late payment fees built in and accelerated interest payments that they collect from the borrower. By paying you on time the second lien holder keeps these additional fees.
What happens if the originating company goes out of business AND the borrower defaults? You would have to hire an attorney to foreclose on the property. That cost would come out of the sale of the property. You would collect all of the late fees and accelerated interest on your loan. The benefit to you would be a much greater rate of return; the downside is that your money may be tied up for an additional 6 months to over a year. We are disclosing this to you, although the likelihood of this happening is very small and has never happened.
Why should I consider this? The risk is obviously greater than structured settlements that are court ordered, but the term is shorter and the rate of return is higher. The equity in the property is the collateral and protects your downside risk. This opportunity is backed by a first position commercial mortgage note no greater than 60% of its fair market appraised value.