When the stock market has got you down, it is time to look to better options for investing. Options that have better and more secure returns are available for your money. Private mortgages are just one of many great investing options. Investors who lend money to individuals for home mortgages are also know as hard money lenders. Many of these investors can earn well over 10% by investing their money wisely in mortgages for individuals. It is an investment that doesn’t fluctuate like the stock market, but brings in returns solidly and at rates of 10% or more.
Among all the hype for private mortgage lending is the good and the bad. It is a possible secure investment for lenders and an area rife with scams for borrowers. If you want to build up a trusted hard money lending business, you must do it with care and professionalism. Start off with a good deal of research. Know the market inside and out. Stick to industry standards as much as possible. But also be flexible, that is one of the hallmarks of private lending. Some locations will have legislature limiting lenders so be sure to consult a lawyer to ensure that you are meeting licensing or other requirements.
It is not necessary to have unlimited funds if you want to become a lender for private mortgages. Some lenders do have large amounts of cash on hand, but most use other means like huge credit lines, or pools of smaller investors that each gets a cut of the percentage. Hire professional title and escrow companies to do paperwork and closing for you, it lends to the professionalism and honesty of the process. Keeping a lawyer around also helps to keep you in the black and to earn the trust of your customers.
There are plenty of scams out there intended for you too, so look out for groups that claim to be able to make you rich overnight. A great way to learn how to be a good private mortgage investor is to watch the best private lenders at work. You can also get a successful lender to be your mentor and teach you how to do good work and get great returns at the same time. Success in lending is often a matter of trial and error. Learn from those who have gone before you and follow in their most successful steps.