Who is a great candidate for becoming a private lender this year?
This is expected to be a banner year for real estate. Millions of individuals could be in a ripe position to become private lenders and profit from this method of investing in real estate. Real estate investors using other strategies should be alert to who these individuals are and where to find private lenders too.
- Existing Homeowners
US homeowners are currently experiencing a record high amount of home equity. Millions of homeowners are collectively qualified to withdraw trillions in home equity this year alone. Many will blow this money. They’ll spend it on down payments on cars, on shopping sprees, or making poorly chosen home improvements. Others are looking to invest these funds. They can make great spreads between current home equity loan and line of credit rates, and what they can make a private money lenders.
- Cryptocurrency Investors
Cryptocurrency investors have taken a beating this year. Between fraud, plunging trading values, bans on advertising and trading, and the threat of new regulation, many have had a tough and big wake up call. Many were already looking for ways to withdraw and diversify funds in cryptocurrency and bitcoin into real estate. Private money lending with tangible real estate collateral can be a great way to do it.
- House Flippers & Rental Property Landlords
House flipping and rental property investing are still both great real estate strategies this year. Yet, those already doing well in these niches should also be looking for ways to diversify and complement their current investments and models. Private mortgage lending can help with this. Dedicate a portion of profits to this niche. You can invest through other investors or hard money lenders, or provide down payments to house buyers.
- Retirees & Seniors
Thousands of people are retiring each day. Few have portfolios set up to provide well for their retirement. They need security, income, and passive income. Many will have sizable 401ks and IRAs, and many will get payout or severance packages from employers. They need to get this money working, and private lending is one of the easiest ways to do it.
- Lottery Winners
There will be a variety of levels of lottery winners this year. It may be $10,000 or $100,000 on a scratch off, or millions on a state lottery ticket. That’s not a real investment strategy, nor scalable system for future finances. More lottery winners go broke within a couple years. Investing that money in real estate can help it go a lot further, without having to get a job.
- Stock Market Investors
Stocks took a notable dip in February 2018, which could be a sign of the real bubble to come. They have been grossly overpriced for years, and most offer little value or dividends at this stage in the cycle. Affluent professionals who have suffered the hit in the past are looking for ways to avoid massive losses ahead. Many more will join the rush when the real dive begins.
We are currently in the midst of one of the biggest wealth transfers in our nation’s history. Trillions are being handed down between generations. In addition to cash and inherited IRAs, this also includes a lot of real estate. Many heirs don’t want to take on their parents’, grandparents’ or great-aunt’s homes or apartment buildings. They know real estate investment is a great tool, but may not want those specific homes for a variety of reasons. They are eager to cash them out fast, but then need to reinvest that cash.
Learn more about private lending in the REWW Academy.