Rental Property Investor · South San Francisco, CA · Member since 2019 · 262 posts · 95 votes
Hello BiggerPockets community,
I am interested in private lending and looking for trustworthy opportunities to invest money into besides just parking it into a bank. I am seeking this lending route to get myself emerged into investing at a minimum level so to say. Is there any opportunities that offer around a 10-15% (or more) that are short-term (1 year or less) to invest in that help fund real estate deals? I have found one currently, but looking for more avenues to explore. Looking forward to the responses!
There are many options you have. There is no guarantee on the return only projections. A debt investment pays you a return say 12% plus points probably ends up between 14-15%. That would be investing in a single project I.e., fix n flip, BRRRR and other such investments. Then there are larger investments such as syndications larger multifamily projects. You will need to park your money longer generally 5 years. If done correctly your return could be in the 20% range and higher. There also equity deals. Easy example fix n flip share in profit and losses. If profit was $50,000 and your 50/50 that's 25K in less than a year say 100K investment that's a 25% return. Good Luck.
There are many options you have. There is no guarantee on the return only projections. A debt investment pays you a return say 12% plus points probably ends up between 14-15%. That would be investing in a single project I.e., fix n flip, BRRRR and other such investments. Then there are larger investments such as syndications larger multifamily projects. You will need to park your money longer generally 5 years. If done correctly your return could be in the 20% range and higher. There also equity deals. Easy example fix n flip share in profit and losses. If profit was $50,000 and your 50/50 that's 25K in less than a year say 100K investment that's a 25% return. Good Luck.
Thanks for the reply and explaining! Have you done any yourself or can you recommend any trustworthy opportunities that I should look into? I have started finding these "debt investment" opportunities, but want to try out the larger investments. I am interested in long-term and equity deals. Looking forward to a reply!
Yes, I have you used private lenders for my last 20 projects and have funded a few projects myself. So I have experience from both sides. Looking to getting in to bigger multifamily projects.
Rental Property Investor · Bristol, CT · Member since 2016 · 30 posts · 17 votes
6y
@Arron Paulino I would suggest networking locally at REIAs or meetups and getting some recommendations. When you offer yourself as a lender, there will be all sorts of people that will come up to you, but ideally you would get to know the person that you are lending to.
I personally would suggest a syndication but typical hold time is 5 yrs.
The thing with private lending is you want to find someone who is doing projects year round because if they only do 1 or 2 deals a year and your money is primed for 6 months out of the year, it’s not earning the maximal income. You also want to review their plan and exit strategy and make sure they have a handle on the numbers and the market and have a good track record.