Becoming the Bank - Getting Started as a Private Lender

[NaDean Bowles]

Who in here is a private lender?   Either small or large scale.  I'm putting it in my plans.  I know one person who started at $20,000 but it's hard for them to find those who only need that much and that always puts them in second position.  

How much did you begin with?  How much property will that purchase relevant to the market you are in?  What rates do you begin with?  What protections do you have in place to protect your assets?  

Thank you!

[Jaspreet Baveja]

Originally posted by @NaDean Bowles:

Anyone else?  If you would like to remain confidential, feel free to message me.  Does anyone have any solid book recommendations on the subject?

Hi NaDean, I would say that I definitely started with about that $ amount, have always been in 1st position lien across over 40 loans in the past 18 months and it is about 50% LTV and most times 80% LTP. A recorded Note & Mortgage, like any traditional bank loan, are the most basic, industry standard and expected levels of protection. You can have the Title Company draw them up, or have a lawyer draw it up, or if you have an experienced borrower, they may already have a template as well (have it reviewed by an independent lawyer for validity in the state you're lending in). Usuary laws are good to know, market rates, building a relationship to actually make it a Private Loan vs just a Hard Money Loan etc. You're welcome to reach out as well if you'd like to discuss further and maybe even a phone call down the road could be beneficial.