When I first got started, I went through the whole “I wanna do it all!” phase that a lot of new investors do. Every new strategy I learned about was exciting, and they all looked so profitable, and I had big goals about money and lifestyle that absolutely DROVE me to buy all the courses, do all the things, and become a tycoon as soon as possible, leave nothing on the table in the way of opportunities.

 

Where did that land me?

 

Working 18 hours a day 7 days a week.

 

Doing a lot of things that didn’t really “fit” me. Like rehabs. Which were profitable but didn’t really fit with my ‘details are hard’ brain.

Stressed out.

 

Ultimately divorced.

 

Yes, I made a lot of money, but I had no life.

And I’d love to say that once I homed in on the strategies I liked and was good at, figuring out how to spend my days and years and life suddenly clarified itself.

It didn’t.

 

Because even within a more limited real estate business, there are ALWAYS new opportunities to chase.

 

…Do I go after these deals in the adjoining state, where I don’t have a property manager, will need different contracts etc.?
…Do I acquire this whole portfolio of really run-down rentals from this guy, even though I know it will take a year to sort them out and get them upgraded, when they’re in areas I wouldn’t usually buy in? I mean, he’s offering 0% owner finan ... Read More…

 

Note: laws and regulations regarding the advertising, registering, and formalization of private loans vary enormously state-to-state. Generally, these rules apply to the borrower rather than the lender, but even lenders should be aware of what the laws in your state say about these transactions. Of course, this article is not intended as legal, accounting, or other professional advice. Always consult with your legal, accounting, or other professional before making any investment.  Further, nothing in this article should be construed as an offering or solicitation of a security.

Private lending is a strategy in which even moderate-income investors can easily get involved.

There are plenty of real estate entrepreneurs and rehabbers who want to borrow your money; if you let it be known you have as little as $20,000 to lend in most markets, someone will be right there ready to put that cash to work.

If all goes as it’s supposed to, it’s a truly hand-off investment; you just sit back and collect checks. And the return is oh-so-much-better than other fixed-rate investments; you can expect to average around 6-8% per year total (because higher rate loans are generally also shorter term; when you loan money to a rehabber at 12% but he only uses that money 9 months a year, that still works out to 8%).

But the big fallacy of private lending is that YOU, as the private lender, don’t need to know very much to assure that the deal goes well. After all, it ... Read More…