Right at the core of a good real estate investment plan is becoming a hard money lender. There is always danger involved in loaning money but being a hard money lender literally opens up a new way to being a successful real estate investor. Being the one who does the lending puts the control into the investors hands and also provides the opportunity to earn a much higher rate of return on any investment he makes. As you can see there are several ways to make money in real estate investing that involve more than just flipping properties.
To become a hard money investor it is necessary to take a good hard look at the source of the investment opportunity. Your money that you use to invest may come from your IRA or from savings. If your source is hard money brokers or trust deed there is an investment minimum that you need to meet. This minimum can be as high as $100,000 or as low as $5,000. Your choice will be your own comfort level remembering that any loan investment is a risk. It may not be prudent not to put all your eggs into one basket. There will be other deals that will come along.
Becoming a hard money lender means that your cash on hand needs to be more than if you were investing with a trust deed firm. You will of course need to have good legal advisers that can assist you in drawing up your appraisals, underwriting, loan documents, loan servicing, and title services. To find hard money financing firms with investment opportunities, an online search will turn up many local firms.
When you find your company you will need to ask a lot of questions and check into their references. You will want to know the full details of the underwriting process of the trust deed firm that you consider. You need to know their years in business, their default process, the investment minimums, the loan to value guidelines and the regulatory practices that exist in their state of operation. There are public records available that you can check to see if the company has any outstanding complaints. Check their references with their present investors. If all this is not available then move to another firm or if you have decided that you will not use a firm but become a hard money lender on your own then you will need to set a team of professionals to put together any potential deals.