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BUSINESS STRATEGY
NAVIGATING THE PRIVATE LENDING MARKET by Dennis Baranowski
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rivate lending can yield better returns than stock and bond markets. If you understand the fundamentals and know how to conduct proper due diligence for each transaction, you can earn solid returns while minimizing your risk. A little more knowledge and effort can give you better returns in private money loans. Electronic transactions that require pushing a button to buy or sell stock are fast. But if you focus your time and attention on learning the ins and outs of private money lending, you can win lucrative deals. Read these tips and learn the lending game.
30 PRIVATE LENDER
PRIVATE LENDING 101 Investing in private money loans is similar to investing in a bond. They both have a fixed yield and pay off at maturity. Example: If you make a loan to a borrower for $100,000 at 8 percent interest and require interest-only payments, you will earn an income of $8,000 annually. If the loan is paid, it will pay off at or before the maturity date. You will also get the original vested principal. Tip: Look for a real estate investor who flips property. Offer to lend the total project cost that includes the acquisition of property