It seems that no matter where you turn, there are stories of people losing their hard earned investment capital in the stock market due to the poor money management of a trusted adviser.
Although this news can be bleak at times, there are a few lessons that can be learned.
* Regardless of your financial successes, you can lose it all at a moments notice. Therefore, you must stay focused. Keep your eyes on the road at all times.
* Don’t let your emotions, especially greed; convince you to make an investment that does not make sense.
* Educate yourself on the different methods for securely investing your capital. So many would-be investors get swindled out of their money based on investments that have no economic or financial foundation.
* Every investment opportunity should have multiple exit strategies. If there is only one way to profit from an investment, then you will always be limited.
The moral to the story is that you have to be proactive and take control of your investments. It is ultimately your responsibility to ensure that your capital is invested in safe and secure opportunities that will also provide you with above average returns. The stock market is unpredictable and offers little control after an investment has been made. However, those who are looking for a better alternative have begun to flock to the real estate market by investing in private mortgages.
As a Private Lender, you will be financing investment properties with your own private capital (or that of your IRA). This allows you to become the bank and invest your capital in loans that are secured by real property. These investment properties also add a level of security, generally with at least a 30% equity position in the property.
The Benefits of Becoming a Private Lender
As a Private Lender, your capital is protected by a mortgage on the investment property which is no more than 70% of the after repaired value of the property. This allows you to have an adequate means to recoup your investment in the event that the borrower defaults on their payments.
To a certain degree, this form of passively investing in real estate is hands-off and stress free. As the lender, you simply enter into a loan agreement with the borrower and collect your monthly payments and/or capital gains.
Conceptually this investment strategy is very simple and straight forward. If you finance $70,000 for a property that is worth $100,000 after repairs are completed, you will receive a pre-negotiated interest payment, normally in the 8% – 12% range. You immediately know what returns you will make on a particular deal and best of all your investment is secured by the real estate.
In order to succeed as a Private Lender, you will need the following:
* Access to experienced real estate investors
* The capital to finance the properties they are attempting to purchase
* A team of professionals that will help you to close your deals quickly and ethically
You investments should be working hard, so you don’t have to. Begin to take control of your financial future by investing in private mortgages and watch as your capital grows.
For more information on Private Lending, please visit www.privatemortgagesnow.com.
David Scheuring is President of Pembroke Property Solutions, Inc., a professional real estate investment organization. More information is available at www.privatemortgagenow.com. Please send any comments or requests for more information to: info@privatemortgagesnow.com
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