What’s one of the best things about investing in loans?
It doesn’t matter if the market is up or down. Your money will be always be protected (if you do them right), and you’ll always find checks arriving in your mailbox.
But before you invest in loans, you need to make sure they’re good ones.
Last post, I shared the first foundation block to a good loan: good properties.
Today, I want to reveal the second key foundation: good borrowers.
In hot and cold markets, you want someone you can depend on to 1) keep you protected and 2) confident your payments will arrive on time.
So, what makes up a good borrower? Here are my top 3 requirements:
- Proof and history. They have a solid history and proven concepts for their business (be that rentals or other investment like fix and flips).
- Reliable income and reserves. They do not solely rely on the property to make their payments.
- Honest communication. They do not hide any material facts, they’re happy to keep you updated, and they’re never late with payments.
Basically, you need to find a borrower who you enjoy working with and creates a win-win relationship. A loan with this person should not create extra work for you.
It’s really as simple as that.
So, now that you have a good property and a good borrower to work with, how can you make sure your loan is secure? That’s up in our next post.
Ready to build your foundation for good loans? Contact us today and see how we can help you succeed in private lending.
- Email us a question at Mike@TheNoteShop.com
- Schedule a 30-minute consultation.
- Enroll in my personalized coaching services.
Did you enjoy Private notes-Income and Security #2? Check out:
Private notes-Income and Security #2