Invest in Mortgages & Real Estate Using Private Money Lending

Many people are confused by the term private money lender. They do not realize that they can profit greatly by participating in something called hard money lending. Hard money and private money lending begin with an individual or a group that negotiates directly on a personal basis to lend you money for your real estate investments.

The money is funded through your personal investments such as a 401(k) or IRA or even money you stockpiled in your savings account. The money can be used to purchase rental real estate investments or to supplement funds borrowed from a bank to cover down payments.

How Can Private Money Lending Benefit You

Hard money and private money loans typically offer a return on investment of at least 10% percent per year. For example, if you invest in a real estate property for as little as $20,000 per year, you are going to get a return of $2,000 on your original investment which translates into about $167 dollars per month. Compound that into a $100,000 investment and you could easily be earning $835 dollars per month just for private money loaning your money out.

However, all investments have some risk assessment involved. Therefore, you need to assess your situation to decide if private money lending is right for you. Investing in loans secured by real estate offers a higher rate of return and lower risks compared to the stock market. There are no commissions or upfront fees and the borrower is required to place hazard insurance on the property and you will be named on the insurance policy as the mortgagee.

Many times the borrower is required to add collateral to their property giving them much more motivation to pay back their debt in a timely manner. So basically, you are investing in the property without the headaches of being a landlord or contractor.

Here are 3 additional advantages of using Private Money Lending for your real estate investments:

Speed of approval: this depends on your lender. In some cases, you could have your loan in a few days or a few weeks. In comparison, a more traditional mortgage could take one to three months to process.

Flexibility on repayment terms: several hard money lenders provide funds from their own reserves, allowing them flexibility with the loan’s terms — especially in terms of the repayment timeline. Whether you want to repay the loan in six months or need a longer-term period, lenders aren’t restricted to pre-established term sheets.

Borrowing: the lender may be willing to lend you 100 percent of the purchase price. Without a down payment, you may only be responsible for paying the origination fee and the monthly interest until you pay the loan off in full.

How You Can Get Started

At GL&L Holdings, LLC, we are a great resource for investors in Texas seeking opportunities to invest in mortgages & real estate using our private money lending services.

We produce fast, reasonable, and secure real estate loans that enable you to close quickly on investment residential properties. GL&L Holdings, LLC is a private money lender who issues real estate financing that avoids the time-consuming process and requirements of conventional lenders.

Frequently Asked Questions

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