Benefits of Becoming a Private Money Lender

With stock market volatility and unscrupulous members of the corporate board, you can find it hard to earn a fair return on your investment dollars as an investor. Hard Money Lender for Real Estate Investors┬áis an excellent resource for this. Stuffing the money under the mattress almost seems better because it’s not rising anywhere else. However, consider being a private money lender before you rip the mattress cover off.

As a Private Money Lender, you would agree to lend a certain amount of funds to a borrower in exchange for interest in some form of collateral, just like any other lender. Typically this collateral is commercial or residential real estate, although business equipment and start-ups are also frequently pursued by private money lender funds.

Since you’re a private investor, it’s easy to get started: what makes lending private capital so enticing to the investor is the fast return on investment. Private money loans are typically short-term loans that are usually shorter than nine to twelve months, and you have the luxury of picking your deals with cherry.

You will have full leverage of your investment dollars and who gets them, unlike conventional lending agencies, where everything has to be passed through a committee. The average real estate loan for private money would have a loan-to-value ratio of not more than 65%. This way, even if the deal goes wrong, your investment is secured. You’ll be able to spot a good deal at a glance once you learn the ropes and mitigate your risk.

You might be wondering why someone in their right mind would consider investing in real estate, with the real estate market the way it is. It’s basically basic supply and demand. Land is the only finite product. In other words, they don’t make any more of it, and who has it is all that changes. People do need houses in which to live and physicians need offices from which to work. The main problem is that they’re not lending to banks.

They are so scared that they have failed to do what they are supposed to do, which is to lend money, to cause a board member to lose his bonus. As real estate still needs to be purchased and sold, you would be in the best place to earn a nice income for yourself as a private money lender, helping other real estate investors raise their incomes as well.