Private Money Lending: An Investment Strategy Not Everyone Will Tell You About
When you hear a presentation from a financial adviser, it would be completely different from what I am about to tell you. Financial advisers are compensated when they sell you stocks, bonds and mutual funds, and often only recommend the investing areas where they receive the highest commission.
If I were a financial adviser, things would be different.
I would not be recommending a stock, bond or mutual fund based on my commission but rather on your portfolio, structure, family, lifestyle and expectations. It speaks to the importance of being your own money manager. Your sustained success would be very important for me… if I were a financial adviser.
But, I am not a financial adviser. I’ve gotten into a completely different market that makes the aforementioned investments not only look too unsafe, but they yield too low a return.
What Is Private Money?
Private money is capital lent by a private citizen or company through the United States. Private money has SHORTER terms and a clearly defined repayment schedule. Terms for these types of loans vary from lender to lender and will depend on the experience level of an investor, as well as, the length of the investor’s relationship with the particular lender.
With All Considerations, Why Is Private Money A Rewarding Investment?
- Private money is a passive investment
- Private money generates a fixed interest rate per year
- Private money is collateralized by a physical asset (the property)
- Private money is secured by a private money mortgage recorded at the county register
- Private money is insured against loss (whether burned down, destroyed by the elements, etc)
- Private money contains equity from the start
When is private money not your dream?
When you are doing it wrong.
How Not To Do Private Money
When you lend $100k to an investor you found on Craigslist with no due diligence, no appraisal, no title insurance, no title work up, and no verification of recording to verify lien position is done, private money THEN becomes a TERRIBLE idea.
Why Secured Investment Corp?
- You choose deals at your own comfort level, view only pre-underwritten loans, and get full transparency to whom you are lending
- For our notes, private money lending can learn on average, 8-12 percent annualized return.
- You are a first position lien holder.
- Lenders only lend 65% of the appraised as-is value
- Borrowers have to have “skin in the game” in the form of cash, partner, collateral and/or equity
How To Invest
If you do your due diligence, private money then becomes a (and in many ways THE) best investment strategy.
“You don’t have to be rich to invest, but you do have to invest to be rich.” –Bradley J. Sugars
If you are interested in lending, there are different ways you can fund, through: self-directed IRAs and 401k, liquid funds, an LLC and a family trust. You can review our FAQs, speak with our Director of Funding Heather Dreves at 1-800-341-9918 (ext.402), apply to be a lender on site, or if you are an accredited investor looking to invest in our Fund, please sign up for our informational webinar.