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Updated about 5 years ago on . Most recent reply

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Tim Rector
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9
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Where to keep cash when not tied up in a private lending deal?

Tim Rector
Posted

I am starting out as a private lender for home flips. It may take 1-2 months to find a suitable home which meets all criteria based on my deal finders feedback. In the meantime my cash is sitting in my savings account earning .02% interest :( My question is for other private lenders, where do you keep your funds while waiting for the next deal? I am guessing where the money is stored needs to be easily liquidated in short order and not at risk of dropping in value.  I do have a Fidelity account where I could move the funds.  I could wire the funds directly from Fidelity when the funds are needed once a house comes available.
Looking for suggestions for where other private lenders keep their cash when waiting for disbursement.  I am guessing liquidity is a key.

Thanks.

Most Popular Reply

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399
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David de Luna
  • Rental Property Investor
  • NorCal
222
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399
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David de Luna
  • Rental Property Investor
  • NorCal
Replied

I have to say, yes, it's a bit of a roller coaster, but I've yielded near 20% on it, on average and if it was down when I needed to draw, it was never by much. The point is that for me, on average, it's treated my money quite well between draws and whatever I have left when I drew something down for an investment, the balance left has served me well to overcome losses. Overall, I've done handsomely even when drawing down 75% of the balance for a purchase. Find your own comfort level. I know you know that in equities one must find one's own comfort level. I've found mine. Some of the other fellas input is fine, but in my worst years, I've done 10X better than 1.75 or even 5% overall if I had to pull when it was down. Works for me. 

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