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Home / Trust deed investments / Investment Steps: How to Be a Hard Money Lender

Investment Steps: How to Be a Hard Money Lender


It seems that nearly everyone has some “tip” regarding how you can improve the return on your investment portfolio. In truth, however, there are several traps that are set for those with capital to invest, these days. The stock market remains in flux, investment portfolios managed by “experts” continue to take severe dives after period of gain, and of course, the constant push and pull cycle regarding lending in the banking industry keeps everyone from making any progress economically. But, there is a particular area worth noting that is delivering incredible returns on investment capital: hard money lending.

Why Hard Money Lending is Gaining in Popularity

There are no “smoke and mirrors” techniques used to outline why hard money lending makes sense. To frame the information properly, we’ll start with the reasons that so many property transactions involve the private funding platform. Banks continue to maintain the frugal lending practices that protect the capital they hold, which means that those interested in financing pieces of investment property need outside sources to expand their holdings.

Those with capital can become a hard money lender, which means that they deliver the funding necessary for a property investor to make a purchase, charge interest on the loan itself, and hold the deed to the property as collateral for the loan itself. It’s a great way for an individual or organization with capital to see double-digit returns on the money loaned, while securely protecting the investment through the collateral.

How to Be a Hard Money Lender

There are so many questions regarding how one becomes a hard money lender, but very few resources that offer the true information regarding these transactions. Often times, anyone interested in the possibility will have to sift through countless “expert resources” that simply look for ways to capture capital and turn a profit for themselves. Instead, anyone that truly wants to become a hard money lender should research the industry independently of organizations, find the details that pertain to the transactions themselves, and then begin applying the capital in the proper manner.

From younger investors to those with retirement capital simply interested in increasing their monthly income, there are thousands of opportunities in metro areas across the country. And, because the transactions are always secured through the property deed as collateral, any defaults result in the investor now owning a piece of property in which they paid only 60-65% of its total value.   While defaults are relatively rare, the immediate sale of the property, even when slashing the price to re-coup the capital, will result in a substantial profit.

If you have had questions regarding how to be a hard money lender, take it upon yourself to learn the fact about one of the truly incredible opportunities investors are using every day. An investor that wants to become a hard money lender must utilize incredible research skills and always be wary of “experts” that want to utilize your capital. In time, you’ll learn that the industry is, indeed, bursting at the seams, with plenty of gain to be made!

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