Private money lending is when individuals lend their own capital. Essentially, private money lending serves as an alternative to traditional lending institutions, like big banks.
Private investments can be secured in several ways – but most commonly through i) a personal guarantee, backed by the borrower’s personal assets, or ii) a mortgage, which ties the loan to the physical property. Documents can vary depending on deal, amount, structure, and preference of investors.
What are the typical returns for lending private money?
Returns vary so widely deal to deal, especially in an equity position where returns can fluctuate based on deal performance. Typical returns range from 6-10% annually. If interested in finding out more, fill out the partnership form!
How will I get paid back as a private money lender?
Typically we will refinance after our remodel is complete. You will get paid the full amount + your return directly from our new mortgage lender.