If Private Lending is So Great, Why Isn’t Everyone Doing It?

3 min read
Lee Carney Read More

Join BiggerPockets (for free!) and get access to real estate investing tips, market updates, and exclusive email content.

Sign in Already a member?

In every community right now, there are investors finding out the benefits of creating or buying secured real estate notes. There are investors creating safe and secured private loans, which earn them double digit returns and a monthly interest check in their mail box. These investors are not savvy banker tycoons, but they are the everyday average person who knows they need to improve their financial future. But, these everyday investors are not in the habit of telling you about their little GOLD MINE. They would rather keep the masses in the dark and continue to collect their interest check. Ask me how I know this…. I know this because I AM that everyday investor who became a successful private lender.

So, WHY am I Letting the Cat Out of the Bag?

Am I just an overly nice guy – not particularly. Here are two reasons…my ‘hidden agenda’, per se’.

Do I ever run out of money in my private lending business….YES. Therefore, I want to give you my 15+ years banking perspective on how to make a safe and secure private loan. I liken Private Lending to driving a car. You and I know how to drive a car, but if we get into a brand new car, we are unfamiliar with how to turn on the wiper blades, if the radio is XM, or how to adjust the mirrors.

Same thing with Private Lending, we have all made a friend or relative a loan. Anyone can make a loan, but not everyone can make a Good and Profitable loan or buy a profitable cashflow note (buying an existing note or creating one…same thing). I show you how to do just that so you and I can potentially do business one day. One day, I may have a loan request for $75,000 but only have $50,000 to fund it. Occasionally, I also sell a few of my secured cash flow notes that I have in my personal portfolio, not just brokered.

Second reason I am letting you in on the secrets of Private Lending….Tangible Assets. Friends where ever you have your nest egg, where ever you have your family wealth, please ensure you have it in some sort of Tangible Asset. Here’s why….

$100 Trillion Bank Note

Recently, I bought online a $100 TRILLION bank note from the Bank of Zimbabwe. I use it when I do presentations to Real Estate Investment Associations as what NOT to do. I bought it for 56 cents! Can you believe that? It cost more to ship it than it did to buy it. Why…years ago, the Zimbabwe government over inflated its currency to the point of collapse. This is not an isolated case. Study some of the causes of the French Revolution – their currency ended up going away.  Study what caused the currency devaluation in Russia in 1998, Belarus 2002,…remember the Asian Financial crisis in 1997?  I am just saying the U.S. is not immune. Listen to the folks who went through the depression.  They will tell you to have tangible assets. Investments you can taste, feel, and touch. Private Lending is one way to secure your investment with those tangible assets as every loan I make is backed, at a low loan to value, by marketable real estate in my local area which I know very well.

I’m Just Saying…

Friends, we have got a recipe for disaster, in my humble opinion.

  • We purportedly adverted a major financial crisis. (One day we are in financial ruin, next we are fine? That’s suspicious.)
  • Federal Debts and Deficits (They just don’t go away). Go to www.usdebtclock.org. That will scare the bejeebies out of you.
  • Business and Personal loans are at an all time high.
  • Banks lending capacity reduced due to increased regulations.
  • Inflation looming.  (The Federal Reserve cannot continue to print money without repercussions.)
  • Increased taxes.

I am not an economist and I don’t use tarot cards.  I am just pointing to the obvious, saying this is NOT sustainable. I have all my money in private loans backed, at a low loan to value, by marketable real estate in my local area which I know very well. I suggest you find a similar business model and make it successful.

To Your GOOD Wealth…
Photo: Tony Fischer Photography