What is private lending?
Private lending is an old business indeed. Long before banks, finance companies, trust companies and credit card companies, individuals borrowed money from one another in exchange for interest payment. Many times the loans were secured by personal assets like chattels (personal effects) or real property (land or building); other times, the money was loaned without security, on the strength of a person’s reputation and good standing in society. Modern day private lending is simply a continuation of the old practice: an individual with surplus money, will loan some to another individual. The loan is based upon the expectation that the monies will be repaid in an agreed manner, with interest. When a person loans money to another, they are investing in the borrower. The interest rate at which the loan is set, is equivalent to the return which the lender expects to get from his or her investment. Many lenders will invest in private loans because the returns they generate are greater than wh
This is a form of investment when a person, private lender, lends money to a private real estate investor. You, as a private lender in turn will be getting fixed returns that never change, are much higher (e.g. 11 to 13%) than you’d get in CDs, money markets, commodities, stocks and most mutual funds, and will be secured by real estate. An investor and a private lender partnering up together is the best way for both of them to get what they really want — to make more money.
Private lending, also known as Trust Deed Investing, is a process whereby private individuals lend money to property owners secured by their real estate, with the desire to receive a fair return (commensurate with risk) on their investment. It is NOT a “get rich quick scheme.” Oftentimes, private money loans are generally short to medium term in nature (1-5 years) and are used for all types of real estate financing. However it is advisable you start lending against single family homes. The words “private lending” invoke certain assumptions. – Private lenders must have money. Not true! – Private lending seems risky. Not true! – Private lending requires decades of experience to do. Not true! – Private lenders must dedicate full time to do this. Not true! – Private lenders must have good credit. Not true! So what is the truth? It turns out that private lending is a relatively safer way to generate passive income than owning properties. It is very similar to banking. Banks are in the busin
