Often when it comes to financing, you hear about how to be a qualified borrower or how to meet the requirements of private money lenders. California investors and how to become one rarely are discussed, so let us cover who these investors can be.
If you are like many individuals in the real estate business, you may have noticed how lucrative the business is for private money lenders. California investors, in fact, are some of the most well-paid private money lenders. California investors, therefore, are clearly on to something. So, what is it exactly? Well, it is their cunning ability to know which commercial and non-commercial ventures to move on or rather to finance.
With that being said, you may want to throw your hat into the private money race. But, you probably do not know just how to start the process of becoming a private investor or money lender. The good news is that the overall process of becoming an investor is not overly complicated. In fact, the process has more to do with your available cash flow and the particular niche you would like to start investing in.
This means that you need to, first and foremost, research the process of lending. Of course, this may take some time, but it is important to know the ins and outs of your industry. After you feel fully apprised on the lending process, your next step is to start evaluating your available capital. Ultimately, you want to ensure that you can lend a substantial amount of funds without any negative effects on your overall budget. In other words, you should only lend funds that you can do without if push comes to shove. You should also make it a point to go over your goals when it comes to lending. If this particular avenue seems like too large of a step for you personally or financially, you may want to also consider micro-lending.
In essence, micro-lending is just another name for peer-to-peer lending. Peer-to-peer lending is when small lenders help each other find prospective borrowers. Moreover, you will typically come across borrowers who are trying to pay off a reasonable amount of debt (student, loans, credit cards, wedding cost, car repairs, etc.) and individuals who are looking to start up a small business or finance a creative project. Micro-lending also allows you to determine the rate of interest based on the level of risk that is associated with lending to a specific borrower. This means borrowers that you determine are high risk can be charged at a higher rate of interest. Thus, you can get your feet wet with micro-lending before moving onto commercial and non-commercial ventures.
Advice on Lending Sites
Another viable option is to consider join a lending site or a lending club. These particular sites will allow you to invest a smaller amount of money to a large group of borrowers. If you are interested in becoming a private money investor without a lot of heavy lifting, this may very well be your best option.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.