Quote:
Originally Posted by MilehighM3
What about short term loans for real estate? A good friend of mine does this, mostly for people who flip houses. They want to avoid the closing and origination costs so they pay a higher rate. Typically in the ~20-22% range. The loans mature in 6 months and are due in full or he takes the property. It's worked out very well for him with the majority of the loans paid early in 3-4 months. That saves a headache and minimizes the return, but it frees the cash back up to start again. Then you can snowball that cash towards bigger loans or a greater number of them. Worst case scenario is you repossess a house that's partially or mostly renovated, finish the project and sell it yourself for an even greater profit.
|
i like this idea. i have looked into borrowing from a "private money lender" in the past to get into a property (i opted not to borrow private money).
i have about $30k liquid to invest and could pull $70k out of my house with a goal of paying the $70k back in a short term (3-4 years). borrowing equity to lend it to someone else just involves too much risk i would think.
perhaps i could do it with the $30k and snowball it from that point. maybe lend to people who need quick cash for closing costs or a down payment or something?