How to Start Lending Hard Money

I have researched some as far as lending my own money, however I wanted to find out how else to do it. I want to secure my money with real estate or some other asset and would like to start with no more than 20k. Any ideas would be greatly appreciated.

20K is not that much money at least when it comes to real estate lending. What you might do is look for another investor or two and pool your money together. The 20K will get eaten up in one or two small rehab loans and you will be stuck waiting for several months for the pay-off. The interest is not bad (12-14%), but it will take you forever to grow that money. Even at 14% you will only make $2800 per year.

where are you located?


Keep this tread going!! :biggrin

What is a good amount of money to start in the real estate lending business?

And, What are some other avenues lenders invest their money?

Have you thought of a roth ira?They ususally let you buy options on realestate and also they are able to loan money out for projects and when the money is being returned it is put back in the ira.The only bad thing you cant take the money out until your 65 but on the other hand it goes in tax free and comes out tax free.

one of the best ways to get into this (even with a small amt of money) is go thru a small loan broker. Some (many?) of these folks are also doing private money on the side. The way my buddy works it (he owns a full-time conventional loan brokeage) is he takes a small percentage of the interest as a service fee and the rest flows to the person who puts up the cash.

Mike in Calif.

By the way, roth IRA is post-tax dollars, not pre-tax and you are limited on your annual contribution

I have heard really good things about the roth ira and know of big investors who use them to fund their deals

I am 24 and plan to start one this year.


You can start distributions from an ROTH IRA at 59.5 years old


They are talking about using the money already inside your roth to build the value of your roth. If you use the money already inside your IRA to buy a $100 option that makes you 15K, the 15K goes back into your IRA as profit made using the $100 and doesn’t count as part of the annual contribution.

Maybe you already knew this, I am just posting to clarify for someone who might get confused.

ROTH IRA is an amazing vehicle to build wealth if you don’t want to actually own and hold RE property…that is my strategy with RE investing.

Join a Reit club. That is leverage.