Want Serious Passive Income? Try Private Money Lending in 2022
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- Опубликовано: 28 июл 2024
- For average investors, private money lending has been mentally squared away as “something mega-wealthy people do.” Most investors will write off lending money because they think they lack the experience or funds to do a successful deal. But what if we told you private money lending requires less money than you thought, that it’s almost completely passive, and that today’s high-interest-rate environment may be the perfect time to start?
Alex Breshears and Beth Johnson are graciously coming in as our private money messiahs, teaching us all how easy (and lucrative) it is to be a private money lender. They’ve been lending for years, not only to supplement their real estate portfolios but often to outright replace them. Private money is far more passive and flexible than performing a flip or BRRRR yourself, and almost anyone (and yes, we mean anyone) can do it in one way or another. It’s such a good way to make more money that Alex and Beth wrote the new BiggerPockets book, "Lend to Live," on this exact subject.
But before you print off business cards that say “private money expert” under your name, listen to what Alex and Beth have to say. They drop some valuable gems on who should (and shouldn’t) be a private money lender, how to protect yourself when you lend, points, rates, and fees you can charge, and building a pool of borrowers you can trust. If you’re anything like Scott and Mindy, then there’s a good chance you’ll walk away from this episode far more interested in private money than before!
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Grab the New Book, “Lend to Live”:
store.biggerpockets.com/produ...
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Show Notes at:
www.biggerpockets.com/blog/mo...
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Join the BiggerPockets Money Facebook Group:
/ bpmoney
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Check Out Alex and Beth on The “BiggerPockets Real Estate Podcast”:
www.biggerpockets.com/blog/re...
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Read Beth’s BiggerPockets Articles on Private Money Lending:
www.biggerpockets.com/blog/co...
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Connect with Alex and Beth on BiggerPockets:
Alex: www.biggerpockets.com/users/a...
Beth: www.biggerpockets.com/users/b...
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Get in Touch with Alex and Beth for Private Lending:
www.lend2live.com/
flynnfamilylending.com/
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Email Alex and Beth:
alexandbeth@lend2live.com
beth@flynnfamilylending.com
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Want to Be a Guest on the BiggerPockets Money Show? Apply Here:
Guests: www.biggerpockets.com/guest?u...
Finance Friday: www.biggerpockets.com/finance...
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Connect with Scott and Mindy on BiggerPockets:
Scott: www.biggerpockets.com/users/s...
Mindy: www.biggerpockets.com/users/m...
Episode 328
00:00 Intro
05:12 Who Can Lend Private Money?
09:24 Lending vs. Active Investing
11:44 Is 2022 the Perfect Time to Become a Private Lender?
18:52 Private Money Points, Rates, and Laws
29:51Building Your Private Money Team
33:36 How Much Can You Make?
41:12 Vetting Potential Deals
46:45 Lending in The "Second" Position
53:12 Can You Sell Your Loan as a Note?
56:45 Finding Better Borrowers
01:01:50 Private Money vs. Hard Money
01:05:26 How to Start Lending
01:12:44 What if a Borrower Goes Bust?
01:19:24 Private Lending Red Flags
01:26:35 Becoming a "Passive" Private Money Lender
01:36:35 Grab Alex and Beth's New Book!
01:38:29 Ready to Start Lending?
#biggerpockets #biggerpocketsmoneypodcast #ep328
Great book! Engaging, informative, and “user friendly”.
Great content! I cant' wait to get the book and learn about this side of real estate investing.
Love, love, love this episode! My kind of investing! So nterested!
Thank you.
Good podcast with great info.
Great episode
Interesting.
1:25 Lending (Be your own 🏦)
precisely
How can a general partnership be setup such that one partner (of two) retains their qualification for medicaid as the general partnership earns a profit as interest on private money loans ?
I want to transfer my IRA to a self-directed IRA. I want to lend the money out. What is the best entity to put in the SDIRA for write-offs? Thank you.
Can someone please explain to me why this is at all attractive? None of this sounds remotely passive to me. So I have to go find lending opportunities, then find, work with, and pay several professionals to vet, facilitate, settle, and if needed, recover my capital, for every transaction? I'm also then at risk of the individual borrower defaulting, and then having to deal with a lawyer to get that property that I'll have to flip or offload?
All this work and risk (lending to individuals) for an annualized return of 9 to 14%? Compared to some actually passive ETFs that yield a risk adjusted rate of something similar, if not more, that I can do online in less than 15 minutes? And how is this even real estate exposure? It's not like you profit from the property appreciation since you're lending.
What am I missing? I'm genuinely confused.
How dare you question a Proud Dog Mom of 5 who is teaching Woman how to be strong and independent even if it makes no sense? Because she is a woman? That's misogynistic!
🤣
Reality check aside, they are just cashing in to make a few bucks targeting all naive woman. That's all. I am surprised Bigger Pockets even endorsed this bs.
What ETF’s are you referring to if you don’t mind sharing please?
I have the exact same question
Lend privately and lend low without the property. Lend small to many. Forget the lawyers and extra usery bullcrap.
ETFs do NOT make that same return on average. The average return of index funds is 9.6%.
Why should a private money lender, a pml, setup an LLC for collateralized lending ?
So, do these ladies’ companies/businesses accept funds from individuals to invest/lend?
Depends on what kind of ROI you are trying to get. Most Private Lenders will 2X your ROI from any bank you are holding your money in.
Say if I wanted to be a private money lender where would I get the money to lend to someone who would want to purchase real estate?
Interesting question, but this type of lending is mostly for people who have extra money lying around.
The funds to start you off would have to be saved. By you. You can then grow your portfolio to a point where you lend big figures. For whatever reason.
You could use the money saved in your retirement account or borrow against your own equity to lend back out at a higher rate
you can obtain a line of credit and use that to lend. you do not always have to have savings or a nest egg or an IRA/401K.
That Robert Kiyasaki greeting!
But you can also lend to people as a personal loan, not everything need to be linked to real estate.
Then what recourse do you have if they don’t pay back the loan? That’s why having real estate as collateral makes more sense
What if you have 2.k?
No
What's that mechanical gadget behind Beth?
Looks like an antique outboard motor for boat. My guess
Just zoomed in.
It’s a Johnson outboard. Bigger question, why is it in her office!?
@@dinosaurdude5668 her kids studied music ?
11:01
Not convinced a lender needs asset protection via LLCs.
He's not selling a product, nor engaging in dangerous behavioir. He's not a doctor, etc.
Just seems like overkill.
Please convince me to the other side of the argument!
Is there a way for fast forward just for whenever Mindy talks?
I know right??? Her voice gets on my nerves!!!
@@lucretiaanders4256 Same...🙉
Interesting that you comment on an issue the woman can’t control….but not the stuttering the man can’t control. Very interesting.
8-14%? But inflation is 10%…
Quit voting for old, blue losers who eff up the economy.🤦🏽🤯
Today it's at 3%.
This sounds like private hard money. What is the point to the investor? Hard pass.
Stop calling this Private Lending. If you charge Origination Points and fees, you are a Hard Money Lender. Private Lenders cannot charge fees.
Cannot or typically don’t?
I don't agree. I would define private lending as someone that has direct access to the funding and determines the requirements for financing while hard money is more institutionalized
Wrong… banks are hard money lenders…
This is an argument as old as time. In practice there are few useful differences.
50 different states with 50 different laws