Playbook #010: Private Lending
Private lending can be a sensible way to earn strong returns if you have a lot of cash sitting idle. You loan your money to builders and developers and earn interest in return. It's the simplest way to invest in larger projects like office buildings, hotels, industrial complexes, retail pads, etc.
🖼️ The Big Picture
If you have cash sitting in the bank, losing money to inflation, then being a private money lender on real estate can be a sensible way to earn strong returns, with potential longterm upside or equity, secured by a mortgage. You can invest as an individual, or through your small business via:
- Bridge loans (short term loan until permanent financing is secured)
- Development loans (usually for single family or multifamily projects)
- Residential rental loans (for rehab and sale or rental)
- Commercial loans (for office buildings, hotels, mobile home parks etc.)
You can lend on individual projects as a sole investor, participate in a group of investors on a single project through a syndicate, or invest through a fund where your money could be used on any number of projects.
