Hard money lending business is a type of lending business that allows borrower to secure their loans with real property. The assets usually used for hard money are real estate property, heavy equipment, inventory and vehicles.
Hard money lending business is one of the lucrative businesses one can think of. However, one must follow the following steps;
- Establish yourself as a business
This however requires you to register your business with a name. Similarly, you will have to also obtain a tin number for your business.
- Obtain a business permit and licenses
Obtain your business licenses and permit from the right organization and also in the right way. This would also give your business the credibility and legitimacy to operate.
- Open a bank account for the business
This will help you save enough money for the business when it gets into crisis.
- Get insurance cover for the business
- In some cases, insuring your company is a requirement of maintaining your license. You also want to have protections in place to cushion you from the unexpected. If you’re operating out of a brick and mortar office, you need to have the building insured as well.
Table of Contents
What is hard money lending?
Hard money lending is a type of loan that is based on the asset of the borrower. It is also and attractive type of loan and very easy to obtain. However, hard money loan has a shorter term as compared to the traditional loan.
How much can you make as a hard money lender?
Similarly, hard money lenders are also sometimes referred to as private lenders. They make approximately $15 to $20,000 in a month.
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How do I invest in hard money lending?
When it come to hard money, you must have a fair knowledge about the various ways you can invest and the pro and cons associated with it.
Similarly, some of the ways you can invest in hard money includes;
1. Purchasing loan at a face value.
2. Buy an existing liability
3. Invest in company that offers opportunity to pool together funds
4. Invest in fractionalized loans
5. Buy second or junior liens
6. Buy a group of loans in one transaction also known as pools of loans
Source: Xorlali.com
