If you're like many investors who have seen the value of their stock portfolios fell significantly over the last few years, you might have been looking for a safe alternative to the stock market. During your search, you may have found Private Lending. So, what's Private Loan?
Private loans are loaned money secured by real estate and are provided by private money lenders through https://baymountaincapital.com/ or other online sources. But what does it exactly mean? Let's look at an example of what a typical investment as a private lender would look like.
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Let's say you know that professional real estate investors are finding great deals on single-family homes and can buy a home at a significant discount. Real estate investors often need to raise money from private individuals to fund property purchases. You offer to become a private lender to the real estate investor and here you agree.
He has found a property that is worth $ 200,000 that he can buy at a big discount. The property needs some repairs to bring the value back up to $ 200,000 but he can buy and improve the property for a total investment of $ 140,000.
You, as a private lender will agree to provide a loan worth $ 140,000 to the investor to buy the property. You and the investor have agreed that 10% would be a reasonable interest rate for the money against the property.
This is private lending.