What Are the Biggest Mistakes You’ve Made in Private Money Lending?

[Holly Peterson]

Scenario: A lender had limited communication with the borrower throughout the loan term, resulting in misunderstandings and lack of alignment on project goals and expectations.

Mistake: Miscommunication led to issues that could have been addressed early on, contributing to project delays and difficulties in loan repayment.

Lesson Learned: Maintain open and regular communication with borrowers. Set clear expectations and establish a process for addressing concerns and updates.

[Beth Johnson]

Lent out money to a very close friend of mine and someone I trusted implicitly. Placed too much emphasis on who he was rather than the property itself (but this investment property still had plenty of equity) and then had to foreclose on him because he went dark. Lesson learned - always bet on the horse, not the jockey. Even the people you think would never lie or walk away from their responsibilities still do from time to time. People lie, properties don't.