Invest as a lender

7 Replies

Hi, I want to invest in real estate as a private lender smarter not in stuck I don't like the up and down. I am looking to invest my money Wisely like the back based on holding asses lending money LTV of 70-75 ,so I have some Equally In case that something go wrong I will have room for error and still be fine. I don't have A lot of money plus I want to start small any way to To test the water .Can anyone,pls tell me the con and the pro let me know if you know about any good company and website out there right now that I can look at it.

Investing as a private lender is a great thing to do and the monthly cash flow should be a win/win for you and your investor

I have a link that you can click on a read about the pros and cons of private lending.  What to expect.   

Remember, trust is important

Make sure the property/deal makes sense

http://www.biggerpockets.com/renewsblog/?s=private...

The brief synopsis of what I think are the pros and cons of private lending:

Pros

+ You don't have to take the risk of being a landlord and dealing with tenants.

+ Your money isn't tied up in a physical building.  (Unless the person defaults and you wind up taking over their property.)

+ If you establish trust with someone and build a relationship, you can wind up lending to them over and over and make more money.

Cons

- You need to build trust in someone and make sure they have credibility.  That can take time.

- You don't make as much as buying and holding or flipping.

The con is if you do a long-term loan your money is tied up. If you do shorter-term loans you have to keep redoing your loans and in the meantime you earn almost nothing. Each new loan is a new set of risks.

Lots of cons, if you advertise or offer financing you're not a private lender, you're in the business soliciting loans. This really isn't a venture that should be taken just because you have some money, you really need to see your attorney and make sure that attorney is aware of brokerage and lending regulations as well as predatory practices.

A better approach might be to find a broker who has the knowledge and is compliant, have that relationship reviewed by your attorney. You can enter into a partnership and fund a project inside a partnership agreement instead of being a lender, again, see your attorney. No forum or web site is going to teach you how to be a lender.

Before you jump in as a lender you better understand how the shoes of a lender fit, you are not buying the property in a situation of a defaulted loan.

Might search "Private lending" on BP and do some more homework. Then see your attorney.  

Thank you everyone for your quickly response being  so helpful, God bless

Originally posted by @Dawn Anastasi:

The brief synopsis of what I think are the pros and cons of private lending:

Pros

+ You don't have to take the risk of being a landlord and dealing with tenants.

+ Your money isn't tied up in a physical building.  (Unless the person defaults and you wind up taking over their property.)

+ If you establish trust with someone and build a relationship, you can wind up lending to them over and over and make more money.

Cons

- You need to build trust in someone and make sure they have credibility.  That can take time.

- You don't make as much as buying and holding or flipping.

thank your for help me rethink my thought,you make a lot since 

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