Private Lending on Your Own vs Partnering with Best REI Funding
There’s no doubt that private lending is a fun and lucrative business. You get to be your own boss, the bank, and realize great returns without doing too much work. At least not as much as the real estate investor you lend to.
But there’s still a lot of work that needs to be done when you’re a new private lender. If you don’t put in the time to find a trustworthy business partner or create a solid lending model, you could risk your investments.
This is why some investors would rather lend through a Hard Money Lender like Best REI Funding. You still realize a high fixed rate of return without doing any work. Here’s what you need to know.
Private Lending on Your Own
Not Really Passive
The problem many investors have with lending directly to a real estate investor (REI) is that it’s not really passive. You can’t just hand someone thousands of dollars just because you think they’re a nice person. There’s a lot of work that needs to be done to minimize your risk and maximize your returns.
A Lot to Learn
You have to understand contracts, mortgages, notes and the local real estate market. Make sure everything is written and filled out properly while kept organized. If not, a simple mistake could end up costing you your profits or even your principal investment.
And in an unlikely scenario, you’ll have to handle the foreclosure process against the property or hire an attorney to do so. Then you’ll have to finish renovations if necessary and sell the property to collect your investment. This will take even more time, costing you more money.
Networking & Due Diligence
In order to become a private lender, you need someone to lend to. That means you’ll have to start shaking hands and handing out business cards in search of a trustworthy partner.
Once you find potential business partners, you’ll have to figure out who are the best candidates. That means doing your due diligence, asking for references, inspections of previous and current projects, etc.
Once you found a partner it’s still not over. You’ll have to analyze any deal they bring to the table to make sure it’s a good investment. Also, you have to keep up-to-date with the progress of the property to make sure that you’re going to get paid back on time as agreed.
Partnering with Best REI Funding
Knowledge & Expertise
We’ve been lending hard money to real estate investors for over 10 years. We’ve also been real estate investors (REIs) in Wisconsin for over 30 years combined. We understand the local market, and we know what it takes to succeed as both a lender and REI.
Our partners are reputable real estate investors with proven business models. We also conduct an in-house comparative market analysis (CMA) by a licensed real estate broker for every deal. This ensures that any property you invest in is a smart investment.
100% Passive
If you lend through Best REI Funding, private lending will truly be 100% passive. You won’t have to do any work, we take care of everything!
We handle the underwriting and servicing of the loan until it’s paid off. And you don’t have to worry about tracking the REIs progress throughout the duration of the loan either.
Also, in the unlikely event where you need to foreclose on a property, Best REI Funding will handle the entire process. We’ll hire an attorney to foreclose and repossess the property, finish renovations if necessary, and handle the sale.
More Investment Opportunities
Best REI Funding has a strong line of investment opportunities constantly flowing through the door. While working with an investor, if you don’t take the opportunity right away you might have to wait months for the next deal to come along.
Our partners bring us plenty of deals. There’s a constant flow of opportunities that often-come available days apart, not months. This allows you to quickly reinvest money you’ve recently pulled out of other investments, potentially increasing returns significantly.
This is why private lenders who have more money than they do time or access to deals invest with us too. We help them keep their money constantly invested.
Conclusion
Private lending is something everyone can do. But your strategy will depend on the amount of time you’re able or want to invest. You can make more money on your own, but you’ll sacrifice a lot of time. Or you can partner with a Hard Money Lender like Best REI Funding where you might make less, but you'll have a lot more free-time. There’s no wrong answer.
If you have the time and want to be in the business for yourself, hit the books and keep your eyes open for opportunities. If you don’t have the time or you’d rather skip the learning phase and you still want to invest Let us Know!
If you have any other questions about Hard Money Lending, please Contact Us online or give us a call at (888) 341-2282.
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