People will often ask WHY someone would choose to be a private lender or become a private investor/partner on an apartment building deal instead of just buying their own real estate. I will share with you the top reasons our private investors want to partner or lend:
- “I don’t have the time to look for deals!”
- “I don’t want anything to do with tenants or fixing a property!”
- “I don’t have enough real estate knowledge and/or time to learn about it!”
- “I’m looking for a better return than what I’m getting now… and I want it hassle free!”
- “I want to partner on a deal so I can learn from you before I move onto investing on my own.”
We thoroughly enjoy helping other people grow wealth with real estate. We see our “job” as one where we primarily provide options for those that have an interest in real estate investing. As a private lender or partner, you have to choose what type of lending works best for you. For example:
- Some lenders do only short term (6 months or less) investments on rehabs/flip projects
- Some lenders do long term investments (1-3 years) on single family rentals
- Some lenders do long term investments as partners on an apartment complex
- Some lenders like to do a long term investment & be a loan sponsor on a project (subsequently netting them more than just being a lender)
- Some lenders only want to be loan sponsors
For more information on the details of different lending options, please feel free to contact us and we can discuss.
As a lender it is important that you do you are working with someone you trust and not only do your due diligence on that property, but also do your due diligence on the person you are lending to. So if you are short on time and knowledge what steps can you take to quickly do your due diligence?
- Google Search – one of the fastest, easiest things you can do to research the person you are lending to. Scan a few pages when you google search someone’s name.
- Investment package – If you are looking to lend on a project, make sure the person you are lending to has put together some information on the project you are lending on. Things you are looking for & questions you should ask:
- Why lend on a project in this location?
- What is the 1 year, 3 year, and 5 year plan for the property (long term holds)?
- What is the value of the property and how will it increase?
- How is your money being secured?
- What is the exit strategy?
- How will the project cashflow?
- Ask yourself if their project plan seems realistic.
Everyone wants their money to be working for them and making them more money! But while you are doing this, you also want to minimize your risk by taking the time to do your due diligence!
Looking for more information? Contact Us and ask to be put on the list for our next Private Placement Memorandum.
Is becoming a Real Estate Investor (Private Lender ) for you?