Private Money Investing

Private money lending is when individuals lend their own capital to other investors or professionally managed real estate funds, while securing said loan with a mortgage against real estate. Essentially, private money lending serves as an alternative to traditional lending institutions, like big banks.

As rookie investors gain experience, they strive to aim higher. Leaving your hard-earned money in a savings account is no way to protect and grow your assets. At the end of the day, private money lending allows you to secure a loan with real estate that is worth much more than the loan. In some ways, this process can be less risky than owning real estate. That’s why it’s important to familiarize yourself with the best real estate financing options available to today’s investors.

In the past, real estate financing typically came from banks, government agencies, insurance companies, and pension funds. However, with a list of strict requirements and a timeline not conducive to the average real estate investor, a need for alternative lending sources quickly developed. At the same time, it became obvious to those with appropriate funds that their money could better serve investors than large institutions. Now, private money lending is a critical component to the real estate investment industry. In fact, its presence makes it more possible for the average investor to run and maintain a sustainable career.

In case you were unaware, there are several benefits involved for those who choose to lend private money as well. If done correctly, offering alternative real estate financing options can mitigate risk while simultaneously establishing wealth. Of course, this is not a path for everyone. You need to ask yourself if you can afford to do so. Having a little extra money in the bank does not necessarily mean you should throw it at the first investor who comes your way. If you are equipped to mitigate potential risks and take advantage of the opportunities that present themselves, private money lending may warrant your consideration.

You may want to consider private money lending if one of the following applies to you:

• You are a real estate investor looking to expand your portfolio.
• You are a doctor, lawyer, CEO, or professional of another kind who has a great income or a surplus of cash.
• You have a sizable retirement savings account.
• You are a retiree looking for a passive income investment.
• You are owner of an estate or other trust fund.
• You are a tech entrepreneur who owns a successful startup.
• You are a lottery winner.
• You want to just help out a friend or family member.

Simply put: private money lending allows you to act as the bank for other investors. Rather than directly purchasing assets, you get the opportunity to fund those owned by colleagues and partners. By now you likely realize how beneficial this set up can be. However, there are a few more things you should know before getting started. Read through the following tips before taking on your first deal as a private money lender:

• Start Out Small:Identify a range you are comfortable working with and stick to it. The number one mistake private money lenders make when starting out is spreading themselves too thin. Assess your finances, and your preferred level of risk, and create clear guidelines for potential projects. If someone approaches you searching for more than you want to offer, do not be afraid to refer them elsewhere.
• Work Locally:There are profitable real estate deals all over the country; however, there are also deals right under your nose. If you decide to start your private money lending business locally, you can meet face to face with investors. Additionally, you will likely be more available for communications and future investment options. Don’t underestimate the potential of your own market, you never know what kind of deals may come your way. You can always expand out in the future.
• Be Transparent:Avoid inflating your portfolio or background to attract potential investments. No matter what point you are at in your investing career, let your work speak for itself. You don’t want to misrepresent yourself or your lending business. Always maintain transparency and stay true to your mission and values.
• Learn The Subject Matter:Review the types of borrowers listed above and familiarize yourself with the different deal types. Learn what factors go into a successful rehab, buy and hold or rental property. That way, when a borrower pitches a deal you know how to evaluate it for yourself. Obviously, they are going to paint the investment in a good light, but is it actually profitable? To be a successful private money lender it is crucial to understand exactly what goes on in the niche you choose to invest in.

Foresight Capital has been a private lending entity and holdings co. since 2012 with a proven track record. Of using specific policies and procedures that maximize investment profits on short specific timelines with a proven track record to mitigate any risk with our investors for the investors needs.

With over 21 years of lending experience in all facets of alternative and creative lending programs past and present our co. can say with certainty our investor returns have been and always will be on average at the very min 10% up to 13% annual. Using specific collateral formulas to protect one’s investment which minimizes any potential default on any transaction. Furthermore, all transactions are so sufficiently leveraged that in the possibly of any potential default the investor will be ensured to retain all their investment and prevent any loss of funds.