What's in it for private lenders?

Question

Stephanie P. · Answer

Different folks have different skill sets.  Here's a good example:  My husband was been a defense contractor that specialized in renovating government buildings.  He was excellent at job coordination, making sure the jobs came in under budget and on time and managing the bureaucracy that is government contracting; the endless progress meetings, inspections etc...  One day we were talking about this very thing, buying some fixer uppers and either flipping them or holding them for cash flow.  I said "You're handy, you're in construction, we could do this" and he said "Honey, like I tell the government inspectors that come on the job, if you see me with a hammer in my hand, something has gone horribly wrong."  He went on to say he could tell me how to do the job, how long it would take and the materials that were needed, but when it came time to using his tin snips to construct a metal framed wall or core drill through a cement floor, it just wasn't his forte.

Not to make too much of a generalization, but there are different aspects of investing like the construction piece, that don't work for some and work great for others.

One girl's opinion

Stephanie

Brian Garrett · Answer

It's because they prefer to be a passive investor.

The same reason people invest in syndications and notes.

Andy Mirza · Answer

Account Closed When you hold paper, you don't have to deal with "tenants or toilets." Too much work in my opinion, even when you have a property manager and even if your properties are in good neighborhoods. Property managers still need managing and need guidance on bigger issues. I've been much happier since switching over to notes, although that has its own headaches. Personal preference. When I get tired of even that much work, I'll switch to lending out money to eager, go getters who do all the work. I'll be happy to collect a little something that's "mailbox money."

Account Closed · Answer

Ahhh, I see. @Andy Mirza Sounds like you guys command a good overview of everything and make all the magic happen from behind the lines.

@Martha Bueno I love your shovel analogy! Makes a lot of sense.

Thanks for enlightening me!

What's in it for private lenders?

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