There are many lucrative opportunities to be found in real estate. However, not all of them require you to buy a house. In fact, it is possible to make good money in real estate without ever investing in a property yourself. Many people choose to lend money to other real estate investors instead. Becoming a private money lender for real estate can offer several advantages. Our Professional Home Buyers team has compiled a list of reasons why becoming a lender may be right for you.
The Advantages of Becoming a Real Estate Money Lender
1. Becoming a private lender gives you access to a vast market. There are a ton of investors looking for private money lenders all across the nation. You can work with the investor that’s right for you. Some investors pay in a lump sum after the property is sold. Others, like us, will pay you a fixed return each month until the property is sold.
2. Money lending produces faster results than flipping. You may not have the time to search for a property. If you don’t, you almost certainly won’t be able to spend the time required to fix and flip it. Money lending is a much lower-maintenance way to make money in real estate. Once you have set your rates and signed the paperwork, you can simply collect interest until the borrower pays you back in full.
3. Lending money can give you more security than investing in property directly. Flipping houses can be unpredictable. In fact, there is no guarantee that you will be able to sell a house once you purchase it. However, you can measure your odds in money lending much more efficiently. Just check the credit rating of your borrowers beforehand. Doing so will tell you how financially responsible they are and let you know if you can trust them to pay you back.
4. Money lending offers you contingencies. Even in cases where a borrower does not repay you, you will be able to go through a foreclosure process to make back your loan.
5. By becoming a private money lender, you can see more significant returns on your investments. Private lending typically provides better returns than the stock market, because you can set high rates and expect consistent results. The average rate of returns in the real estate market is around 10%, give or take.
You don’t need to spend months trying to flip houses to make money in real estate. Become a private money lender, and start seeing returns on your investments immediately. We have a great private lending program, click here to learn more.