Should I be a hard money lender

2 Replies

I have an oppurtunity to be a hard money lender tgo an experinced REI

He will pay me 14% on my money and i will have to borrow it off my equity and pay 6%. He will put my name on a property he owns for the 100 or 200 thousand i invest andif worse case i own a portion of a property. I know people who have done this for 1 year and had no problems. This is fairly good return for borrowed money and no toilets or tenent problems.

Has any of you got involved into lending after making some in REI?

I've been a part of giving and receiving numerous hard money loans, and I would be VERY cautious with how the deal is structured. Owning a portion of a property that's being foreclosed on because the other portion didn't get paid means your investment is GONE. This is exactly how scam artists screw people out of hundreds of thousands of dollars. BE VERY CAREFUL WITH HOW THE DEAL IS STRUCTURED. If you are putting up a couple hundred thousand dollars, you better be VERY well protected.

Let's start with some questions.

How much is the property the investor is buying? How much of the purchase price are you putting up? Who is putting up the other portion? How is the other person structured in the deal? Will there be a mortgage against the property? How is the investor paying for the construction costs?

On top of these questions and any answers you might get, I would take a couple hundred dollars of that 200K and go talk with a very well qualified attorney about the best way to structure the deal.

On top of these questions and any answers you might get, I would take a couple hundred dollars of that 200K and go talk with a very well qualified attorney about the best way to structure the deal.

could not have said it better myself.

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