“An investment in knowledge pays the best interest.”-Benjamin Franklin
Whether you are a seasoned private money lender or you are new to the arena, today the Rules of Thumb blog from MoneyThumb would like to share with you an awesome, 4-part guide for private money lenders we found at Fortune Builders. This guide is great for experienced private money lenders, but we REALLY suggest you read it if you are new to private money lending or are thinking about becoming one. There is so much valuable information in this 4-part series.
To get you started, below we have highlighted the main takeaways from each part of the series:
Private Money Lending Guide, Part 1
- Private money lending works when individuals act as the bank on a given investment deal.
- Private money lending enables investors to create their own loan terms depending on the borrowers’ goals, capital, and timeline.
- Investors who utilize private money lending are typically able to obtain funding quicker than if they borrowed from a traditional banking institution.
Part 1 of the Private Money Lender Guide explains what a private money lender is, the anatomy of a private money loan, steps to take to become a private money lender, how to identify borrowers, what hard money lending means, and how to become a hard money lender.
What Are Private Money Loans? Breaking Down the Basics, Part 2
- One of the pros of private money loans is the speed of purchase. Lenders can underwrite and fund a loan in 7 to 21 days.
- The most common thing private lenders look at when determining whether or not to approve your loan is the exit strategy you plan to pursue.
- Having proper documentation, like your letter of intent and purchase and sale agreement, is of the utmost importance when applying for a private money loan.
Part 2 of the Private Money Lender Guide from Fortune Builders explains how to acquire a private lender loan, explains in detail private loans, how to determine deal viability and your required documentation for private lender loans.
How to Attract Investors as a Private Money Lender, Part 3
Part 3 of the Guide for Private Money Lenders covers the pros of private lending for borrowers and the first 3 steps to get started attracting investors as a private lender.
Private vs Hard Money, Part 4
Part 4 of the guide breaks down the difference between private and hard money. It offers advice on funding deals with private money and funding deals with hard money.
The Rules of Thumb blog from MoneyThumb wants our readers to be aware that much of the information in the guide we have referred to above from Fortune Builders concerns real estate investing and loans, but the advice is also good for any type of private money lender, especially those of you just getting started as a private lender.
Since we consider private money lenders natural leaders, for a boost of inspiration watch this Ted Talk from the website of Real Leaders. The talk is titled The Anti-CEO Playbook. In an appeal to corporate leaders worldwide, Chobani founder Hamdi Ulukaya calls for an end to the business playbook of the past — and shares his vision for a new, “anti-CEO playbook” that prioritizes people over profits. “This is the difference between profit and true wealth,” he says.