How Can I Become a Private Money Lender? [#AskBP 065]

On this episode of the #AskBP Podcast, Brandon explores the topic of becoming a private money lender, someone who lends capital for real estate deals. He shares the process for getting started, as well as the red flags to watch for when lending out your cash. Private lending can be incredibly lucrative and passive... but dangerous if not done right. If you ever plan to put your capital to work funding other people's deals, don't miss this show!

[dcroley]

I’ve successfully been a private money lender for 10 years. The after repair value is key, but also is the time it takes to get the repairs done. You MUST take time to get to know the flipper, his/her plan, how experienced they are, the refi exit strategy, and even what renos are necessary vs. nice to have. The longer you work together the more willing you can be to relax on LTV on the “front-end” of the flip (before it’s in selling conditions). Visit every potential property in person before the handshake. Get a lawyer that works on YOUR behalf, not the borrower. And avoid brokers. Go to local REI gatherings and talk personally with flippers. Have a loan term sheet ready to hand out.

[ladylinda]

The title of this video is misleading. This video talks about HOW Private Money Lending works. It does not really explain the details of how one would BECOME a Private Money Lender. Who creates the documents, how do you vet the borrower, what the fees are, resources for getting started, etc is what I was hoping to see.

[dcroley]

I’ve even used a HELOC to create my OWN line of credit to borrowers with my rate charged to them TIED TO PRIME! That way it’s structured to provide me a consistent rate regardless of what the Fed does. 😉

[SteelPanarchist]

Something I wish other videos would address, and maybe I always miss it, is at what point should one feel ready to start using their own capital to get started, or how might one get started by using another party's capital?

[Pat]

Good video Brandon but I don't know where you got these rates from...I have NEVER heard of borrowers for private lending paying any less than 12%. I'm a private lender for a number of developers in Boston, MA and Providence, RI. I charge 2 points at closing and 14% interest only fixed rate on a 1 year note. The lowest I've ever gotten from a developer is 12%. Double digit rates are standard in private lending for real estate

[Dr.Bertaud]

I can only start small with down payments and rehab loans... Not ready for the big league just yet. Any advice from a small approach perspective?

[flgator]

Do you need a license to lend to real estate investors? Great content.

[loveadventures]

What’s the difference between personal moneylender and private moneylender ?

[mauriciosalinas]

How Does the private investor set him self As separate entity (LLC )- trust or what ? Best tax season....

[juanzapata]

How do you get yourself as a lien holder and contract for the lending?

[sathiapal]

Be your own banker borrow small loans and make your future

[roblocke]

Taking over my Dads private loan portfolio. He has been lending his own money out for 35+ years. He manages all of it manually a.k.a. manila folder style. I am looking for some software to help manage all his loans. He has about 30 private loans active. He also has 12 rental properties he also manages the same way. Any recommendations would be helpful.

[NM-fdjo]

Im a private lender.typically in my country. There should be a collateral example give your atm or issue check to me. Or land title whatever.payment mode is monthly.total amount + the interest devided by like 6mos or 12mos depends on what has been agreed..

[bigblue]

What's the difference between private money lender and hard money lender

[watchingclose]

To be a Private lender Do i need a NMLS Or a MLO

[tonytruong]

How can I start this kind of business in California?

[LoganAllec]

@ Stock market has returned 6% in past 100 years? No way, man. I call this BiggerPockets bias 😂

[jaysant]

Can I be one of many private money lenders for one person? Like if the person needs $30, 000 and me and two other people fund them $10, 000 each.

[nelsonmartinez]

100k you can make 50k a year in the stock market!!! Why 10k

[cesartechunit]

is there a private money lender you would recommend?