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5 Questions to Ask Yourself Before Becoming a Private Lender

Lately, I’ve experienced a fair amount of interest (no pun intended) in private note investing, where you lend out your money to a real estate investor to passively earn interest income. It seems like many investors are sitting on a pile of cash from a recent flip or a work bonus, and are curious about diversifying their portfolio beyond stocks and other traditional investment strategies. I thought I would provide a little more information for those interested and contemplating whether investing in real estate-backed loans is right for you. There are a ton of us hard money and private money lenders out

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5 Things Every Borrower Should do to Expedite Their Loan Closing

One of the biggest complaints I hear about the real estate financing industry is how slow some lenders can be to close a deal. I have heard on occasion borrowers complain my team is not working quickly enough, or in other instances, borrowers will complain to us about other lenders they’ve worked with in the past who did not meet timely expectations. And while lenders are not exempt from human error, there are plenty of things a borrower could do to ensure their loan funds smoothly and quickly. Here are some tips and considerations every borrower should know about if

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Finding Qualified Borrowers to Increase Your Private Lending Deal Flow

You’ve just funded your first handful of private money deals and now you are hooked! If you’re like me, you fell in love with the act of sleuthing out a loan request and doing your due diligence on the borrower, their project, and the property being used as collateral. It is like a 1000 piece virtual puzzle with a handsome monthly reward at the end of it. In fact, your enthusiasm for private lending has become so infectious now you have friends, colleagues and family seeking you out to place their funds into a secured private money loan for passive

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5 Ways to Scale Your Private Lending Practice

The first time I funded a private loan, I knew I was hooked. I loved the art of underwriting the deal, I loved that it was backed by real estate (something I knew more about than the stock market) and I loved how little I needed to actually do after my loan funded in order for my “mailbox money” to appear each month. Little did I know I was in for the adventure of a lifetime. I had absolutely no idea the need for private lending opportunities was so massive. Truthfully, I didn’t even know what private or hard money

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How to Come in 2nd (position) and Still Win Every Time

A lot of people are surprised to hear close to 50% of my annual loan volume is in 2nd position loans. They are even more surprised to hear that despite funding nearly $100M in loans in the last six years – mostly through direct placement of whole note (also known as trust deed) investments for our private lender investors – our company has not had a single principal loss and sub 2% default rate. While there can be some increased risk involved in these types of junior lien loans, the same could be said for all private or hard money loans, regardless

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Common Mistakes New Private Lenders Make & How to Avoid Them

I’ve been asked quite a few times over the last year to review “deals” new(ish) private money investors would like my input on as a seasoned private lender. Many have also come to me after the fact to evaluate options to problem solve after existing loans have gone sideways. I thought I would recap some of the similar trappings found in each situation I reviewed to serve as a valuable lesson of what not to do when entertaining private loans in the future. Absolutely none of the investors who came to me were stupid or unaware. I think this is important to

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