Wholesaling vs Private Money Lending When Starting Out

[Beth Johnson]

A lot of aspiring investors who may not have enough capital to do a project by themselves (or simply don't want to dive into investing without the partnership of someone with more experience and knowledge) seem to take the path of getting started through wholesaling which can be daunting, to say the least. But have any of you chose to get started in real estate by acting as the private money lender on projects instead? 

I'm curious about the rationale between starting in wholesaling versus lending out your funds to more experienced flippers or investors so that you can learn the ropes and make some passive income along the way. I started out by lending money from my self-directed IRA, which was less work than wholesaling. It also helped me build up my capital to the point where I had enough funds for down payment to then purchase a rental property in my retirement plan and still be able to do private money lending out of it.

What are some pros and cons to either approach, in your opinion?