Did you know that you can make private money loans against real estate?

Using your own funds or even your retirement funds, you can have very safe and profitable investments in real estate without owning rental properties.

But how do you do that and how do you avoid all the many gotchas that could cause you to lose money or create a lot of hassle?

That's the question we're going to tackle in this episode of Ask Coach, and we're getting started right now. Welcome, everyone. My name is Chad Carson. You can call me

Coach Carson. I'm the host of the real estate and financial independence podcast, and this is the Ask Coach edition, where in just a moment, I'm going to take you to a clip from a live stream that I did in the past, and someone asked me the question, how do you make a private money loan? What are the terms, the criteria, the things you look for, Chad? And I've done a little bit of this. I've done a lot. I've had another episode of Ask Coach where I talked about borrowing private money. And I've also used my self-directed IRA in particular, where you self-directed your retirement account funds to a custodian who allows you to loan that money. So I'm going to talk about that in this edition and give you some tips and things that I think about and also some additional resources if you're interested in learning more about this. Let's get started. And this is actually something I'm getting into a little bit more. So I'll preface this, Trevor, with the fact that I'm not like your best expert on private lending, although I've done a few loans myself. And I've borrowed a lot of private money.

So I think I have that perspective. I've done loans with my self-directed IRA. And that's typically

what I like to do. If I'm not investing in this index funds in my retirement account, I like to do

loans. Like I don't want to own real estate typically in my self-directed retirement account.

I'd rather loan money to somebody, get a low loan

to value, a much safer position, and have a lot less hassle. I don't want to be the one collecting

rent and doing all that. I just want to get interest. I just want to get a payment from somebody.

And so I've done a couple recently, and the terms that have been good for me have been about a 12%

interest rate, so 1% per month.

And up front, if somebody knew were coming to me, I'd want to have a couple points on the

front end just for my time of getting to know them and processed the loan.

You know, over time I might consider dropping that or not charging the points down the

road, but sort of a kind of a standard might be three points

plus 12% interest is what would get me interested. And I'd want to be, you know, at this point in

the cycle, Trevor, I want to be very conservative on my choice of property. I'm in South

Carolina. I would like it to be like South Carolina, North Carolina. I'm really not interested in

going all over the country at this point.

And so it just be local. I'd want to really know the person going back to those relationships. Are they competent? Can they handle this? If it's their first deal, I'm probably not going to do, I'm going to be much more conservative. They can have more skin in the game. I'll be a lower loan to value. I'm probably going to charge a little bit more because

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