People that have experience with with lending funds.

[Joseph Nelson]

Interested in hearing from the people that have experience with lending funds (their own personal money) to other for real estate investing; whether it's for repairs on a property, initial capital to fund a purchase, etc.

I am not particularly sure that i want to be a landlord and deal with tenants constantly. (Haven't ruled it out).

How do you go about finding people to lend to, make sure that the money is being used for what it is intended, length of time that they have to pay you pay, how much interest to charge, that you don't get ripped off or scammed, etc.

[Will Barnard]

There are two main aspects when dealing with a borrower and protecting your funds. The borrower and the security (the asset and docs associated with it).

As a lender, you want to ensure the borrower has a performance history, can show skin in the game (some of their own capital placed into the investment), and has experience in performing on the particular investment.

For the asset, you need to make sure your a LTV (loan to value) does not exceed a set amount you choose to give you "cushion" in the event the deal goes sideways and you need to take the property back.

Your loan docs are also important and should include all the things you need to protect your investment such as a deed of trust (or mortgage in mortgage states), promissory note, balloon rider if the loan is not a fully amortized loan, personal guarantee rider (which is only worth something if the borrower has personal assets to go after), etc.

For the asset itself, you need to know the strategy (buy and hold or fix and flip) verify the condition and amount of repairs, know the current market value and future market value after repairs, and have a plan in the event you need to take the asset to recoup your investment.