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re: Information for my fellow Real Estate Investors
Posted on 5/22/17 at 1:57 am to stevengtiger
Posted on 5/22/17 at 1:57 am to stevengtiger
What do you guys think of private money lending as an investment? I've been looking for a house for about a year now and it's been tough. A guy has approached me a couple time about lending money and earning 10% while my money sits around. At first I was worried I'd find a place as soon as I cut a check but that was 8 months ago and still no luck. I'm thinking of going small ($50k) on this one he's got but he has another one that could come up and only need about $50k again. 10% sound good? Anyone have experience?
2
Posted on 5/22/17 at 2:48 pm to Sho Nuff
quote:
What do you guys think of private money lending as an investment?
hell yes! just make sure it is backed up with RE. many private lenders loan at 8% or 10%. If you can get 10% go for it. Just vet the damn 3rd party you are going through unless you plan on doing it directly. WHo approached you? a investor needing a private loan? or a third party you invest with who allocates your money to lenders for you?
Posted on 5/29/17 at 12:56 pm to Sho Nuff
quote:
What do you guys think of private money lending as an investment? I've been looking for a house for about a year now and it's been tough. A guy has approached me a couple time about lending money and earning 10% while my money sits around
How does this work out tax wise? I'd talk to a CPA if you are doing this legit. If you are getting taxed short term rates on 10%, no way I'd touch that. No way I'm lending $50k to a flip guy to make 6% which is what it will be after expenses and taxes.
Now if you are talking long term, like a rental or somewhere. That's different. But I wouldn't want to inspect every project you are loaning him money for 10%.
Flipping is usually for 20%+ profit. The huge thing on rentals is depreciation and the tax benefits. Usually the profits can be good also, but the depreciation and tax benefits make it worth it. You would not get any of that on a strict loan.
If you are doing private lending as a 2nd lien, you are the last guy that's going to be paid. It just seems very risky for 11% imo.
This post was edited on 5/29/17 at 1:00 pm
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