Note: laws and regulations regarding the advertising, registering, and formalization of private loans vary enormously state-to-state. Generally, these rules apply to the borrower rather than the lender, but even lenders should be aware of what the laws in your state say about these transactions. Of course, this article is not intended as legal, accounting, or other professional advice. Always consult with your legal, accounting, or other professional before making any investment. Further, nothing in this article should be construed as an offering or solicitation of a security.
Private lending is a strategy in which even moderate-income investors can easily get involved.
There are plenty of real estate entrepreneurs and rehabbers who want to borrow your money; if you let it be known you have as little as $20,000 to lend in most markets, someone will be right there ready to put that cash to work.
If all goes as it’s supposed to, it’s a truly hand-off investment; you just sit back and collect checks.
But the big fallacy of private lending is that YOU, as the private lender, don’t need to know very much to assure that the deal goes well. After all, it’s up to
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