Becoming An Experienced Private Money Lender Guide

Private money lending comes from an individual that lends their own money to a real estate investor. This loan will typically be secured by a mortgage on the property.


Pretty much a Private Money Lender is the bank to an investor. You are an investors alternative to a bank loan and hard money loans. Many investors will need a short-term loan to buy and/or renovate a property. A private money lender can help by lending with favorable terms.

Private money lending is as passive of an investment as you can make in real estate.
Honestly, we think it's the ONLY true passive form of investment.

Private money lending is for people that have the extra capital. This is not a cheap option. Lending money does come with risks (which we'll address later).

Private money lending is perfect for people who can relate to any of the statements below:

✓Professional like a doctor, lawyer, CEO, or any other kind who has a great income or a surplus of cash.
✓You have a sizable retirement savings account.
✓You are retired and looking for a passive income investment.
✓You are a business owner who owns a very successful business.
✓You are owner of an estate or other trust fund.
✓You just won the lottery ;-)

Now, you don't need to be ultra rich to be able to lend money. Sometimes there are opportunities where an investor needs $20K to do a cosmetic rehab.

Private money lending is not for someone that is looking to lend the only $20,000 they have.

Like we said before, lending can be risky.

We see this a lot with people who feel like they're missing out with this rising real estate market. Because of this the lend to the WRONG investor.

Later in this guide we will cover the pitfalls with lending and how to avoid them.

Also, private money lending is not for someone that can't handle risk. If you see that it's hard to part with your money for an investment then don't do it. If you do you will put unnecessary stress on yourself as well as the investor.

You also don't want to lend if you think you will need access to that money in the next 6 months.

We want to take a minute and cover this very real fear. We see over 90% of new investors get in to the market because of FOMO.

Please be honest with yourself and determine if this is the reason why you're getting into it.

If so, don't worry not all is lost.

We understand that you may be seeing on TV or Facebook, how many people are "crushing it" by investing real estate. So you don't want to miss this amazing, once in a lifetime opportunity.

The truth is, this isn't a once in a lifetime opportunity. People have been making money off real estate since the beginning of time. They will continue to do so until the end of time. As long as you have money to invest, you too can take advantage real estate. Regardless of the point in time.

The key is having money! But if you rush in because of your FOMO then chances are you will make a bad decision.

We know investors that made money right up until, during, and after the 2008 crisis.

So please, eliminate your FOMO. Don't feel like you need to jump into a bad deal now because they're all going to vanish! As long as people live in houses there will deals to be made.