First time being a private money lender, need advice.

[Bryan Pham]

Hi BP! 

I been recently contracted by one of my buddies to become his private money lender for one of his deals. I don't have any experience with lending anyone money in Real Estate. What are the steps involved? Should I put my funds into a LLC for protection, how do I protect myself if the deal falls through? What are the average rates for borrowing from a private money lender? Thank you BP!

[Darren Eady]

@Bryan Pham

If you are not going into the lending industry, I would be very leery about a one-time loan to a friend on his real estate deal.  You don't even know what you don't know, and there is too much to know.  It might go alright, or it might kill your friendship and steal your money.  I would suggest to your friend that he approach a hard-money lending group and get his money from them instead of you.  That's my two cents from years of experience in this space!