642: Private Money: What the Experts Warn Against Before You Lend (Or Borrow!)
BiggerPockets Real Estate Podcast
BiggerPockets
4.8 • 16.5K Ratings
🗓️ 31 July 2022
⏱️ 59 minutes
🧾️ Download transcript
Summary
Is private money lending the next best way to invest? To the everyday landlord, home flipper, or once-in-a-while investor, private lending seems completely foreign. Why would you lend money when you can put it into your deals? And even if you wanted to, wouldn’t it take millions, or at least a few hundred thousand dollars to get started? Surprisingly, private money lending is available to more people than you think, and it could be your next way to make truly passive income.
Alex Breshears and Beth Johnson were neither millionaires nor active investors when they started lending private money. Over time, they realized that they had grown relationships with active real estate investors, many of which always needed funding for the next deal. While swinging hammers and painting baseboards may sound fun to active BRRRRers or flippers, to Alex and Beth, the passive income that came in from private money lending was even better.
They’re now so ingrained in the world of private money lending that they’ve written the newest BiggerPockets book, Lend to Live, where they talk about how to build “hassle-free passive income” by lending private money. In this episode, they go over how a new investor can start lending, what to look out for in a lender when you need money for deals, and how even with a few thousand dollars, you too can start building truly passive income streams.
In This Episode We Cover:
How any investor can start lending money for a substantial profit
Why private lending has become more popular as investment funding becomes limited
Hard money vs. private money and why you should never confuse the two
What to look for in a private money lender and how to vet them before you invest
Protecting your money as a private lender and what you need to do to secure a return
Where private money lenders can find investors who are looking to invest
And So Much More!
Links from the Show
Get Your Ticket for BPCon 2022
Listen to All Your Favorite BiggerPockets Podcasts in One Place
Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts
Get More Deals Done with The BiggerPockets Investing Tools
Find a BiggerPockets Real Estate Meetup in Your Area
Why Private Money Lending is a Perfect Alternative to Active Investing
The Perks & Process of Becoming a Private Lender
Books Mentioned in the Show
Lend to Live by Beth Johnson and Alex Breshears
Extreme Ownership by Leif Babin
Cashflow Quadrant by Robert Kiyosaki
Psycho-Cybernetics by Maxwell Maltz, M.D
Connect with Beth & Alex:
Alex and Beth Email on Lend2Live
Beth's Email on Flynn Family Lending
Click here to check the full show notes: https://www.biggerpockets.com/blog/real-estate-642
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Transcript
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| 0:00.0 | This is the Bigger Pocket podcast, SHOPE 642. |
| 0:04.4 | I think a lot of people say they have to have a specific structured mindset and they got to be |
| 0:09.5 | really goal oriented and put out into the universe what they want and some oftentimes for some people |
| 0:15.5 | they're so over-engineered in their goal setting that they may not be, you know, they might |
| 0:20.2 | have blinders on to what kind of opportunity exists out there. I think, you know, both Alex and |
| 0:25.3 | I shared our stories about how we just kind of happened upon private lending and every aspect |
| 0:30.7 | of real estate investing involves some sort of chance encounter with someone with some sort of |
| 0:36.9 | opportunities. What's going on everyone this is David Green your host of the Bigger Pockets |
| 0:40.9 | Real Estate Podcast here today with my good friend and amazing co-host Rob Abbasolo where we are |
| 0:46.7 | interviewing two of the authors of Bigger Pockets newest book called Lentilive. We get into it with |
| 0:52.4 | Alex and Beth the authors of the book about private money lending. Lots of things that you |
| 0:58.9 | probably had no idea that go on behind the scenes had a vet a private money lender to make sure |
| 1:03.2 | that they're the right one for you what to look for what questions you should ask and how this whole |
| 1:06.8 | thing works so that you can scale or supercharge your business. Rob what did you think about today's |
| 1:12.9 | show? This was like this was a you know the wheels turn very often for me on on bigger pockets but |
| 1:18.8 | today was a very special one because I know this wasn't the intention for today's videos to really |
| 1:24.5 | talk about the world of private money lending and how to vet your private money lenders that's |
| 1:29.5 | very honestly the largest part of this episode but I was super interested in actually becoming a |
| 1:34.3 | private money lender I think this is a really cool avenue to diversify in and so I really like |
| 1:38.4 | learning a lot of the mechanics of that. I'll spend your money happy to pay you interest on that you |
| 1:42.8 | just let me know my man. Hey a solid 20% for you my friend and you got it. All right today's |
| 1:47.9 | podcast is brought to you by Rob and Rob's mustache. Let's see which one of us becomes the best |
... |
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