Investors
In your search for a rate of return from real estate, it is important to ask yourself if you are going to be a private investor or a private lender. This is a very important question and it comes with significant ramifications.
Let me explain.
If you are going to be an investor, you will be taking much more risk than if you choose to be a lender. And, as you might guess, that extra risk may provide you with an extra reward. However, if things don’t go as planned, that extra reward that you were hoping for may turn into a LOSS of your capital!
A lender, on the other hand, values security first, and rate of return second. As a lender, I can tell you in advance what your rate of return will be because I am borrowing money from you and providing you with my property as collateral for the loan. If I don’t pay the loan, you take the property.
If you are more likely to be a private lender, the following video will interest you:
For lenders, it is not uncommon to earn 7-9% per year on your money; secured of course, by the real estate itself. If I stopped making payments to you, you could foreclose and take the property.
If you did, you would incur some legal costs and it takes 3 months plus 19 days to get the property back, but in the end, you would have protected your money.
I should add that as my private lender, you are incredibly important to me, and as such, even if my tenants stopped paying me, I would continue making payments to you.
Why?
Simple, I want to ensure that my reputation stays in tact and you lend to me again and again.
I cannot run my business without quality relationships with lenders.
If 7-9% isn’t enough for you, then you might consider being an investor. You could do that on your own, or you could do it by participating in our investment pool. To learn more about doing it on your own, you should read this article for a start.
Links
- How to achieve a high income with low tax
- Should you invest in Real Estate?
- The 75% Plan – how to invest in real estate without having to manage the property
- Wholesale buyer application
- Invest with Kalomar to buy foreclosures
- California Real Estate investor clubs
