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How to Lend Private Money In Real Estate Successfully
Increasingly, real estate investors are looking for alternative ways to invest their money in the real estate investing game. Portfolios are diversifying, new methods of investing are taking center stage, and it always seems like there’s something new shaking up the market.
Investing is always changing: but how we fund our investments has mostly stayed the same. While crowd funding is certainly the new kid on the block, there have been three primary methods for putting down those first payments:
1. Paying from your own pocket.
2. Taking out a mortgage with a bank.
3. Private money lending.
Private money lending isn’t new. It’s when an investor goes to another private individual or company and receives a short-term loan for the purpose of buying and remodeling real estate for investment purposes.
There are plenty of perks to turning to private money lending, both as a borrower or lender: but there are also pitfalls on both sides. We’re going to look at both.