Starting my own private lending

[Stephen Kasher]

Hey everyone,

I am an owner of a medium sized apartment building out of state. It's my first big investment, and, well, could be going better, to say the least.

Given this experience, I am discouraged about further out of state investments, but as I am in Southern California, investing locally is out of the question.

I do have some capital (around 200K and still steadily growing -- probably twice that by year end, plus access to more in HELOC funds) and don't want to give up on the REI game just yet. Seems to me a good way to do remote investing is as a financial partner of an experienced local investor or as a private lender.

What can I do as a lender? How profitable is it? Is it legal in all states?How frequent are defaults? I have read many posts on this topic and can see some of the rules of thumb re 65% ARV, pts, and rates, but are there any books anyone recommends to learn more? How about investment groups? Are there brokers that help private money lenders find investors?

I am very knowlegeable (if not experienced) in cash flow theories and investment analysis. Just need some more practical experience before I decide to go back into buying out of state (if I ever do again). Seems to me that it's a good way to be a partner with someone who knows what they're doing and has found a property at a good and safe discount.

Thanks for any input.