Earn Passive Income With Private Lending
Private lenders are entities that loan money to individuals or businesses but are not tied to any banks or credit unions. These loans are typically short term business purpose loans and collateralized by real estate at low loan to value. Private lenders make income from monthly interest payments and various fees.
Predictable High Yield Returns
When you invest in the stock market, you are placing a bet that the price will go up. Historically, this may be true more often than not. Yet we can observe times when this has gone horribly wrong! When you loan money as a private lender, you have an agreement that specifies how much you’ll be paid and when. Private lending when setup properly delivers very predictable double digit returns. You will enjoy that monthly check that comes like clockwork.
True Diversification
Not only does private lending help diversify a stock-heavy portfolio, but through private lending, it is also very easy to diversify amongst different asset types and acquire assets in various locations. Many private lenders lend in multiple states to diversify their risk by not having all their assets in one location. Of course, doing business locally is preferred since you can go out to asset directly. However, there are many services and tools which allow you to outsource things like valuation, title searches, property condition assessment, property preservation, repairs, maintenance, etc.
Protected - Secured Investment
When lending on real estate, your investment is secured by the property itself, perhaps with a mortgage or deed of trust in first position. Whether you are lending directly or through a company that vets the deals, you’ll want an appraiser to verify that the property is worth substantially more than the amount you are lending. The lower the loan-to-value percentage, the more security you have for your investment.
