A private loan is a loan made by someone other than a bank. When you make a private loan to a real estate investor, you receive in return a mortgage that secures your legal interest in the property. The investor will then use the funds that you have provided to purchase, renovate, and either sell or lease residential real estate.
Private Lending is an investment that is easy to understand. You don’t have to spend hundreds of hours learning and studying corporate financials or candlestick charts, and your return doesn’t fluctuate with the whims of the stock market. You know your return on investment (ROI) up front, because the deal specifies the interest you will receive. Every month you receive a check according to the terms of the loan. Your involvement can be completely passive, allowing you to invest without sacrificing your valuable time.