How to become a private money lender

Question

How do I join an investment group? I am not confident in the stock market. I have enjoyed doing my own investments in RE but I'm burnt out and want to be a silent investor. I extend about one land contract a year (all that's allowed per Frank Dodd laws).  I own a small portfolio of properties in the Lapeer area, passing off the final ones to a manger now.  Ideally I would be the silent investor on projects I care deeply about -- there are a dozen excellent ones near me - but I was burned on the last 2 due to me not having the time, energy or experience to run the team. I'm thinking silent investor is the way to go but I want to see how the pros do it first.

Luke Trovinger · Answer

Hey @Cathy Malmrose! A great way to get your foot in the door for doing so would be to attend your local real estate meetups. There'll be a few ways to find out about them, networking with your current contacts, using the BP event search under the networking page, or starting one of your own! At these meetups you'll be able to speak with local investors to build relationships, and ultimately lend money once you reach that stage of comfort with your new contacts. Hope this helps! Good luck!

Michael Glist · Answer

I think it depends on what your goal is.

If you are looking to be able to see the deals first hand, drop by and see progress and pick work with only people you want on deals you actually want to then you should either work with investors you know that may need capital or as mentioned go out and talk to investors and find one of a few (depending on how much capital you have) and start the process to see who you would like to a nd feel comfortable with investing with.

If you are looking to be more hands off than you could reach out to a local private or hard money lender in your area and see what they offer to their investors to invest. This would still potentially give you the ability to pick and choose which deals you invest in (depending on how they are set up) and also give you a company that would handle most of the transaction from processing, underwriting, closing and collecting payments.

I hope this helps and good luck on your new venture in the Real Estate world.