How to be a hard money lender

1 Reply

I have some money in an ira that I want to use to invest. I was thinking about being a hard money lender with a friend. There’s a house that we want to go in on for 80k. I would fund 50% of it at 40k. The rent is about $800. She would be buying it to invest also. What kinds of terms would be fair? This is my first rodeo as a hard money lender

The way you explained the deal, it sounds more like a joint venture than a hard money loan. That's ok, but the way you structure this deal depends on how you will get paid a return on your 40K and how your money will be secured. 
1. Will your IRA have ownership?
2. Will your IRA get an interest payment, part of the equity, part of the cashflow, or all of the above?

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