Investors seeking alternatives to the stock and bond markets will find refuge in the world of private mortgage lending. If you’re careful and diligent, you can earn solid returns while minimizing risk. On average, Private Mortgage Lenders can earn between 10%-20% interest when making a loan. Here’s an example of a Private Mortgage Lender in action:
John Flipper found a foreclosure property and signed an agreement to purchase it from the seller at $120,000. His Realtor did a CMA on the property that showed that it could sell for about $200,000 after John puts in $20,000 in renovations. John doesn’t have the cash to complete the deal so he goes to YOU. You agree to loan John the money at 15% interest (Not uncommon for a rehab loan). You loan him the full amount of the purchase and renovation ($140,000). It takes John 3 months to complete the project and sell the property. Now John sells the remodeled property and grosses $55,000 in profits, you made $5,000 in profits (just for loaning him the money), a new family gets to purchase a newly renovated home at a fair price and the seller gets to sell his property and avoids having a foreclosure on his credit. EVERYBODY WINS!!