1.) It’s a very secure investment. Lenders take a first lien position on a property and have the
ability to take the property back (through foreclosure in a worst case scenario). Plus, the secured deed is recorded at the local
courthouse so that there is no misunderstanding as to the lender’s interest in
the property.
2.) Unlike stocks or bonds, the investment is a tangible
asset that has inherent value. Whereas a company can go bankrupt and an
ownership interest can be worth zero, a property will never do that. As a
lender, it’s always nice to actually have the ability to touch, see, smell
(well, maybe not smell) exactly what your money is invested in.
3.) Compared to most traditional investments, private
lending offers a much higher return. Many private lenders can get origination
points up front and anywhere from 10-15% interest. This can add up to annual
yield of well over 15%.
4.) For those investors who don’t want the hands-on
approach associated with owning real estate, private lending offers a much more
passive option. Many investors simply don’t want the headache and liability
that comes along with owning real estate and as such find that private lending
is a great alternative.
5.) Unlike longer term CD’s or private funds, private loans are
typically only 6 months or so. It’s a great way to park your money, earn a
great yield, but have the option to pull out and do something different after a
fairly short loan term.
I realized early on that owning real estate as an investment was not for
everybody. I’ve found that for many of these individuals, private lending can
be an excellent alternative investment strategy. Or, perhaps anadditional investment strategy that allows for a diversified real estate investment portfolio.
在线翻译我用了,但是总是缕不顺。
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